^. 


ICJA 


~i       -y-      ■  ■    *M 


y> 


Oi^ 


ins,\,vf;fif:r.        .^^fcaiifo;?,!-,      .-<oF-CAiiFOff^ 


;t^  "5  oj-        ^ 


:^^ 


i  i^ 


>- 


I    ?  a   i      ^i  2^^s-ii 


.-'*i 


'iMVMflin^^'         -^f-yiru 


^  Hl\  AV(.M  ;  I    .  ,,vV  iiKWAUl 


'^^  ^^  '^ 


^^v\tllBKAKV6// 


>i 


(—1  UL. 

/    — 


-  ^1       %  VL/  >)g     2 


55 


„....iNnjuv^       ^^mmw^"^     ^^m\m\^^ 


V  UK  Awrfif  I 


^  ^<  ^  ^  ^.-^'      *'.-v^ 


■iij'jwi^ui-'       %a3AiNn-3W^ 


t>        -  ^wt  UNivtRj/A      ^iusAN(;tifj)> 


\|    SHI  li  I  'I 


i 


^>i  1^1  |©M  iG^i 

^       "^a^AINn-JWV  ^(f/OJUVDJO^"       ^<i/0JnV3JO>' 


I    3 


.S;OfCAilF0%        ^0FCA1IF0% 


^6'AHVHfliH^      >&AHvaan-^^ 


"^r^noNv-^i^" 


-n         ^-J 

^        (51  < 


■<^/! 


^(i/OJIlVDJO^" 


v^iujrtnuiicjyj, 

O 


o 


'^/sajAiNn-JWv 


%jnV3J0>'       '^,5 


^V)F  CAllFO^i^ 


.\V\tUWVtRi/A 


v5,lOSANCFlfx> 

o 


<rni!iNv«)i^     %ii3AiNniwv 


^OFCAllFOfti^       ^C 


o 


O 
?3 


A^tUBRAHYd// 


A^UIBKAHTd//r 


'/5«3AINn3WV^  %0JI]V3J0^ 

^^,.lOSANCFlfj>  ^OF-CAtlF0% 

o 


^OFCAllF0/?/|j>^ 


>&AHVHfln-:\S^ 


,^^^t•UNlvtK5/A      ^ 


.\WFUNIVER% 


•^/: 


=      «c 


Or 

i( 


C3    « 


^V^lLltSKAKTt//: 


OJO'i^      ^50JI1V3J0-^ 


.\\MUN)VtKi/A 


o 


<ril30NVS01^       ^Aa3AINn-3\Vv^ 


^<»0JI1V3J0-^      ^i 


,M,A)HAllFUfiUj,  .  \\At  UNIVtRi/A  A>;lU5ANi;tlfX>  ^V)FLAIIFU%.        ^V! 


, ^     ^  o 


■^/saaAiNnmv 


These  pages 
are  respectfully  inscribed  to 

HON.  THEODORE   W.  D WIGHT,  LL.  D., 

the  distinguished  advocate  and  teacher,  in  acknowl- 
edgment of  his  profound  influence  over 
the  minds  and  hearts  of  the 
3'oung  aspirants 
for  professional  honors ;    and  in 
expression  of  a  personal  gratitude  for  re- 
peated  acts   of   kindness   and    friendly   interest. 


(ili) 


PREFACE. 


In  presenting  to  the  legal  profession  a  work  on  the  law 
of  Commercial  Paper,  the  author  desires  to  call  special  at- 
tention to  the  fact  that  there  is  no  other  treatise  in  print, 
which  in  one  volume  gives  a  full  and  comprehensive  treat- 
ment of  the  whole  subject.  There  are  one  volume  treatises 
on  bills,  and  on  bills  and  notes,  in  which  that  part  of  the 
subject  of  Commercial  Paper  is  more  or  less  fully  treated  ; 
but  none  on  Commercial  Paper,  a  term  which  includes  the 
consideration,  not  only  of  the  subject  of  bills  and  notes, 
but  of  a  great  deal  more.  The  claim  is  made  for  the  pres- 
ent work,  that, — by  a  system  of  condensation  of  statement, 
in  which  the  important  element  of  perspicuity  is  neverthe- 
less found  harmonious  with  the  fundamental  aim, — it 
contains  statements  of  every  importafit  principle,  which 
is  discussed  in  any  present  treatise  of  two  or  three  vol- 
umes. 

The  author  trusts  that  his  present  venture  in  the  literary 

field  will  receive  at  the  hands  of  his  professional  brethren 

the  same  generous  treatment  which  they  accorded   to  his 

prior  eflforts;   and  he  further  indulges  the  hope   that  his 

treatise  on  Commercial  Paper  will  be  found  to  supply  a 

real  and  substantial  want.  C.  G.  T. 

University  of  Missouri, 
Columbia,  Mo.,  Sept.  21,  1889. 


(▼) 


TABLE  OF  CONTENTS. 


CHAPTER    I. 

THE  ORIGIN  AND  FUNCTIONS  OF  COMMERCIAL  PAPER. 

Section  1.  Commercial  paper  defined. 

2.  Bills  of  exchange. 

3.  Foreign  and  inland  bills. 

4.  Sets  of  foreign  bills. 

5.  The  effect  of  a  bill  of  exchange. 

5a.  Bill  of  exchange  for  a  part  of  a  fund. 

5b.  Bill  of  exchange  for  whole  of  funds. 

5c.  Bill  of  exchange,  not  drawn  on  a  particular  fund. 

6.  Promissory  note,  what  is. 

7.  Transfer  by  indorsement. 

8.  Construction  of  ambiguous  instruments. 

CHAPTER     II. 

THE  REQUISITE  AND  COMPONENT  PARTS  OF  BILLS  AND 

NOTES. 
Section  10.    The  date. 

11.  Antedating  and  post-dating. 

12.  Name  of  drawer  and  maker. 
12a.  The  form  and  place  of  signature. 

13.  Joint  and  several  notes. 

14.  Two  or  more  drawers. 

15.  Name  of  the  drawee. 

16.  Address  to  drawees  in  the  alternative. 

17.  Designation  of  the  payee. 

18.  Joint  and  alternative  payees. 

19.  Fictitious  or  non-existing  parties  —  Adopted  names. 

20.  Same  person  as  different  parties. 

21.  Words  of  negotiability. 

22.  Note  made  negotiable  at  particular  bank. 

23.  A  distinct  obligation  to  pay. 

vii 


TABI.K    OF    CONTENTS. 

Skctiov  l'4.     Time  of  piiymeul. 

•25.     Paymeut  must  be  uucomlilioual. 
i'5rt.  Paymeut  ou  or  before  a  certaiu  date. 
256.  Payment  whcu  couvenient  or  possible. 
25c.  Paymeut  ou  returu  of  note. 
25d.  Payment  in  defau'lt  of  installment. 

26.  Payment  out  of  a  particular  fund. 

27.  Words  of  advice. 

28.  Certainty  as  to  amount  to  be  paid. 
28a.  Payable  with  exchange. 

286.  Stipulations  to  pay  costs  for  collection. 

29.  Payment  in  money  only. 

29a.  Payable  in  bank  bills  or  currency. 
296.  Payable  in  foreign  money. 
29c.  Payable  in  money  of  Confederate  States. 
29(1.  Denomination  stated  in  body  of  paper. 
2'Je.  Collateral  obligations. 

30.  Place  of  paymeut. 

31.  Acknowledgment  of  consideration. 

.  33.     Sealed  instruments  not  commercial  paper. 

33.  .attestation  by  witness. 

34.  Delivery. 

34a.  Delivery  to  v?hom. 
346.  Time  of  delivery. 
34c.  Delivery  on  Sunday. 
34d.  Delivery  as  an  escrow. 

35.  Bills  and  notes  executed  in  blank. 

CHAPTER     III. 

AGREEMENTS   CONTROLLING   THE   OPERATION   OF  BILLS  AND 

NOTES. 

Section  40.     Kinds  of  agreements. 

41.  Memoranda. 

41a.  Effect  of  Memoranda. 

42.  Collateral  agreements. 

43.  Agreements  to  renew. 

CHAPTER     IV. 

PERSONS  INCAPACITATED  TO  BECOME   PARTIES    TO  COMMER- 
CIAL PAPER. 

Section  46.     Disability  of  infants  — Liability  for  necessaries. 
47.     Infant's  contracts,  voidable,  not  void, 
vili 


TABLE    OF    CONTENTS. 

Section  48.  An  infant's  notes  and  bills. 

49.  Infant  as  payee  and  iudorser. 

50.  Ratification  of  infant's  bills  and  notes. 

51.  Joint  note  or  bill  of  infant  or  adult. 

52.  Lunatics  and  imbeciles. 

53.  Effect  of  insanity,  when  unknown  to  other  party. 

54.  Lunatic's  contracts  for  necessaries, 

55.  Ratification  of  lunatic's  contracts. 

56.  Lunatic  as  payee  and  indorser. 

57.  The  contracts  of  drunken  persons. 

58.  The  disability  of  all  persons  under  guardianship  —  Spend- 

thrifts. 

59.  Disability  of  coverture  —  Commercial   paper  of    married 

women. 

60.  Effect  of  marriage  on  ante-nuptial  notes  and  bills. 

61.  Exceptions  to  married  woman's  contractual  disability. 

62.  Commercial  paper  of  married  women  with  separate  estate. 

63.  Married  woman  as  payee  and  indorser. 

64.  Reduction  of  wife's  choses  in  action  to  possession. 

65.  The  bankrupt  or  insolvent  payee. 

66.  Alien  enemies  as  parties  to  commercial  paper. 


CHAPTER  V. 

THE   LAW  OF   AGENCY   IN  ITS  APPLICATION  TO  COMMERCIAL 

PAPER. 

Section  72.  The  general  principle  of  agency. 

73.  Capacity  of  persons  to  become  agents. 

74.  Married  women  as  agents  of  liusbands. 

75.  The  manner  of  creating  the  agency  —  Express  authority. 

76.  Implied  authority  of  agents. 

77.  Authority  implied  from  express  authorities. 

78.  Authority  implied  from  appointment  to  a  particular  clerk- 

ship or  oflice. 

79.  Authority  implied  from  previous  recognitions  or  ratifica- 

tions of  agency. 

80.  Revocation  of   authority — Presumed   continuance   of  au- 

thority. 

81.  Effect  of  special  instructions  upon  general  authority. 
81a.  Signature  by  procuration. 

82.  Implied  limitation  of  agent's  authority  to  act  forthebene^t 

of  principal. 

83.  Ratification  of  unauthorized  acts. 

84.  Liability  of  agent  for  unauthorized  acts. 

ix 


TABLE    OF    CONTENTS. 

Section  85.  Form  of  sij;uatiirf  by  tlif  .mt-nt. 

8(i.  Exceptious  to  the  liability  of  agcuts. 

87.  Liability  of  principal  on  commercial  paper  executed  in  the 

anent's  uame. 

88.  Action  by  principal  on  commercial  paper  made  payable  to 

his  afiimt. 

89.  Agent  cannot  dt'k'irate  iiis  authority. 


CHAPTKR    VI. 
PARTNERS  AS  PARTIES   TO  COMMERCIAL  PAPER. 

Section     94.  General  propositions. 

95.  General  authority  of  the  partner. 
9G.  Trading  i)artnerships. 

97.  Other  than  trade  partnerships. 

98.  Accommodation  paper,  liability  of  partners  on. 

99.  Accommodation  paper  in  the  hands  of  bona  fide  indorsees. 
100.  Special  limitations  upon  the  authority  of  partners. 

lOL  Ratification  of  an  authorized  issue  of  commercial  paper. 

102.  Joint  and  several  notes  executed  by  a  partner. 

103.  Form  of  the  firm's  signature. 

lOi.  Firm  doing  business  in  partner's  name. 

105.  Sign.ature  of  firm  in  acceptances. 

106.  Effect  of   dissolution   of  partnership  —  What  notice  re- 

quired. 

107.  What  powers   implied    in   the  authority  to  close  up  the 

business. 

108.  Indorsement  of  the  firm's  bills  and  notes  receivable  after 

dissolution. 

109.  Bills  and  notes  executed  before  and  issued  after  dissolu- 

tion. 

110.  Power  of  ex-partners  in  respect  to  paper  barred  by  the 

statute  of  limitations. 


CHAPTER    VII. 

PRIVATE  CORPORATIONS  AS  PARTIES  TO  COMMERCIAL  PAPER. 

Section  114.  Corporations,  private  and  public. 

115.  Power  of  private  corporations  to  issue  commercial  paper. 

116.  Bonn  fide  holders  of  papers   issued  ultra  vires  —  Accom- 

modation paper. 

117.  Commercial  paper  of  corporation  under  seal. 
X 


TABLE    OF    CONTENTS. 

Section  118.  Power  of  corporatious  to  be  payees  aud  indorsees. 

119.  Power  of  corporations  to  appoint  agents  to  execute  their 

commercial  paper. 

120.  Implied  powers  of  the  bank  cashier. 

121.  Implied  powers  of  the  president. 

122.  Implied  powers  of  other  officers. 

123.  Form  of  signature  by  tlie  agents  of  corporations. 

124.  Form  of  signature,  continued. 

125.  Form  of  acceptance  by  agent  of  corporation. 

126.  Form  of  indorsement  by  agent  of  corporation. 

127.  Exceptions  as  to  cashiers  of  banks. 

128.  Drafts  or  warrants  of  one  corporate  officer  upon  another. 


CHAPTER  VIII. 

GOVERNxMENTS  AND    MUNICIPAL  CORPORATIONS    AS    PARTIES 
TO  COMMERCIAL  PAPER. 

Section  132.  Governments  as  parties. 

133.  Municipal  or  public  corporations  as  parties. 

134.  How  far  tlieir  obligations  are  negotiable. 

135.  What  agents  are  authorized  to  bind  the  corporation. 

136.  Whether  unauthorized  agents  are  personally  liable. 

137.  Form  of  signature  by  public  agents. 

138.  Drafts,  or  warrants  of  one  officer  on  another,  whether 

negotiable. 

139.  Indorsement  or  assignment  of  corporate  drafts  or  war- 

rants. 

140.  Presentment  of  warrants  for  payment. 

141.  Warrants  payable  out  of  particular  fund. 

142.  Suit  on  original  indebtedness. 


CHAPTER  IX. 

trustees,  guardians  and  personal  representatives 

as'  parties. 

Section  145.  Trustees  and  guardians  as  parties. 

146.  Personal  representatives  as  parties. 

147.  What  consideration  necessary  to  bind  personal   repre- 

sentatives. 

148.  The  executor  or  administrator  as  payee  and  iudorser. 


TABLE    OF    CONTENTS. 

CHAPTER   X. 

THE  CONSIDERATION. 

Section  151.  The  necessity  of  cousidenUiou. 

152.  What  instruments  import  a  consideration. 

153.  What  liabilities  presumed  to  be  included  in  the  considera- 

tion. 

154.  Between  whom  question  of  consideration  may  be  raised. 

155.  Real  and  apparent  relation  of  parties. 

156.  To  whom  consideration  must  be  given, 

157.  When  one  consideration  answers  for  more  than  one  party. 

158.  Accommodation  paper. 

159.  Kinds  of  consideration,  good  and  valuable. 

160.  Donatio  mortis  cansa  of  one's  own  paper. 

161.  Subscriptions  to  charitable  objects. 

162.  Moral  obligations,  when  sufflcient. 

163.  Money  considerations  —  Contemporary  loans   and   future 

advances. 

164.  Existing  debts  as  a  consideration. 

165.  Existing  debts,  consideration   for  indorsement  of  com- 

mercial paper. 

166.  Commercial  paper  as  collateral  security. 

167.  When  agreement  for  delay  may  be  implied  as  the  consid- 

eration. 

168.  Every  pledge  of  commercial  paper  founded  upon  sufficient 

consideration. 

169.  The  New  York  decisions. 

170.  Consideration  being  debt  of  another. 

171.  Valuable  consideration.s  other  than  money. 

172.  Transfer  of  property  —  Contingent  and  equitable  interests. 
172a.  Transfer  of  commercial  paper. 

173.  Contract  for  services. 

174.  Release  of  legal  liabilities  —  Compromises. 

175.  Forbearance  and  extension  of  time  of  payment. 

176.  Indemnity  as  a  consideration. 

177.  Illegal  considei-atious. 

178.  The  effect  of  illegality  on  bona  Me  holders. 

179.  Partial  illegality  of  consideration. 

180.  Effect  of  a  renewal  on  illegal  considerations. 

181.  Equitable  relief  to  maker  ou  account  of  illegal  consider- 

ation. 

182.  What  are  illegal  considerations. 

183.  Compounding  of  crimes  and  misdemeanors. 

xii 


TABLE    OF    CONTENTS, 

Section  184.  Contracts  with  alien  enemies  and  in  aid  of  rebellion. 

185.  Confederate  currency. 

186.  Bribery. 

187.  Lobbying. 

188.  Wagers. 

189.  Option  contracts,  when  illegal. 

190.  Contracts  in  restraint  of  trade. 

191.  Contracts  in  restraint  of  marriages. 

192.  Contracts  for  the  procurement  of  marriages  and  divorces. 

193.  Contracts  n  fraiid  of  creditors. 

194.  Maintenance  and  champerty. 

195.  Offenses  against  morality  and  religion. 
190.  Usury. 

197.  Violations  of  the  banking  acts. 

198.  Other   illegal   considerations  —  Knowledge  of  illegal  in- 

tent. 

199.  How  illegal  considerations  may  be  purged. 

200.  Inadequacy  of  consideration. 

201.  Failure  of  consideration,  total  and  partial. 

202.  Failure  in  title. 

203.  Failure  in  value. 

204.  Failure  by  non-performance  of  agi'eeraeut. 

205.  Failure  of  consideration  after  its  delivery. 


CHAPTER     XI. 

THE  ACCEPTANCE   OF   BILLS   OF   EXCHANGE  AND  CERTIFICA- 
TION OF  OTHER  COMMERCIAL  PAPER. 

Section"  209.  The  object  and  effect  of  acceptance. 

210.  The  effect  of  failure  to  accept. 

211.  What  bills  must  be  presented  for  acceptance. 

212.  Presentment  by  whom  and  to  whom. 

213.  Presentment,  at  what  place. 

214.  Time  of  day  for  presentment  —  Business  hours. 

215.  Presentment,  —  within  what  time. 

216.  What  is  a  reasonable  time  for  presentment. 

217.  Form  and  manner  of  presentment  for  acceptance. 

218.  When  acceptance  may  be  dispensed  with. 

219.  Who  may  accept. 

220.  At  what  time  acceptances  may  be  made. 

221.  When  acceptance  may  be  revoked. 

222.  Acceptances,  verbal  and  written. 

223.  What  words  amount  to  acceptance. 

224.  Implied  acceptances,  detention  and  destruction  of  bill. 

yiii 


TABLE    OF    CONTENTS. 

Section  i'lM.  Accfptauccs  on  .separate  paper. 
22»i.  Agreeiueuts  to  accept. 

227.  Coiulitioual  and  qualilled  acceptances. 

228.  .Vcceptauces  for  liouor  or  supra  protest. 
220.  Protest  for  better  security. 

230.  What  acceptance  admits. 

231.  Tlu!  admissions  of  acceptor  for  liouor. 

232.  How  acceptor's  liability  may  be  waived. 

233.  Certitied  uotes. 

234.  Certifled  checks. 


CHAPTER     XII. 

THE  TRANSFER  OF  COMMERCIAL  PAPER  IN  GENERAL. 

Section  241.  The  assignability  of  choses  in  action  in  general. 

242.  Transfer    of     non-negotiable    paper — Subject    to    what 

defenses. 

243.  Negotiable  instruments   payable  to  bearer,  —  how  trans- 

ferred. 

244.  The  liability  of  assignors  of  in&truraents  payable  to  bearer. 

245.  Liability  of  broker  in  transfer  of  negotiable  paper   by 
^  delivery. 

246.  The  transfer  of  negotiable  paper  payable  to  order  —  In- 

dorsement. 

247.  Assignment  of  negotiable  paper  payable  to  order. 

248.  Effect  of  a  subsequent  indorsement,  —  whether  it  relates 

back. 

249.  Equitable  or  implied  assignment  of  negoiiable  paper. 

250.  Title  to  commercial  paper  passes  by  sale  without  delivery. 

251.  Transfer  by  legal  process. 

252.  Transfer  bv  donatio  mortis  causa. 


CHAPTER    XIII. 

TRANSFER  BY  INDORSEMENT. 

Section  256.  The  meaning  of  indorsement  —  Includes  delivery. 

257.  When  indorsement  necessary  to  pass  legal  title. 
257a.  Indorsement  of  instruments  payable  to  bearer. 
2576.  Indorsement  of  non-negotiable  instruments. 

258.  Indorsements  cannot  be  partial. 

259.  Tiie  liability  of  an  indorser. 

260.  Liability  of  indorser  "without  recourse." 
xiv 


TABLE    OF    CONTENTS. 

Section  261.  Successive  indorsers  —  When  liable  to  each  otlier  for  coa- 
tributiou, 

262.  By  wliom  tlie  indorsemeut  cau  be  made. 

263.  To  whom  the  indoi'sement  may  be  made. 

264.  The  place  for  the  iudorsement  —  Allonge. 

265.  Form  of  the  indorsement. 

266.  Indorsements  in  full  and  in  blank. 

267.  Absolute  and  conditional  indorsements. 

268.  Eestrictive  indorsements. 

269.  Time  and  place  of  indorsement  and  transfer. 

270.  Irregular  indorsements — Joint  makers,  sureties,  guaran- 

tors, indorsers. 

271.  Irregular  indorsements  —  Continued. 

272.  Admissibility  of  parol  evidence  in  respect   to    irregular 

indorsements. 
273    Limitations  upon  admissibility  of  parol  evidence  in  respect 

to  irregular  indorsements. 
274.  Admissibility  of  parol  evidence  in  respect  to  indorsements 

in  general. 


CHAPTER     XIV. 

THE  RIGHTS  OF  BONA  FIDE  HOLDERS. 

Section  279.  General  statement. 

280.  What  defenses  will  prevail  against  bona  ftde  holders. 

281.  Cases  of  forgery. 

282.  Instruments  void  for  want  of  delivery  by  maker  or  drawer. 

283.  Blank  instruments  intrusted   to  another  and  wrongfully 

filled  up. 

284.  Instruments  written  over  blank  signatures. 

285.  Instruments  executed  by  mistake  or  under  false  represen- 

tations. 

286.  Instruments  delivered  in  violation  of  instructions. 

287.  Negotiable  instruments  executed  under  duress. 

288.  Bona  Jide  holders  protected  from  defenses  by  estoppel. 

289.  What  is  meant  by  bona  fides. 

290.  Valuable  consideration  must  be  paid  bona  fide  holder. 

291.  When  price  conveys  notice  of  fraud. 

292.  Indorsement  for  less  than  face  value,  when  usurious. 

293.  The  amount  of  recoveiy  against  maker  and  indoi'ser. 

294.  Usual  course  of  business, 

295.  Before  and  after  maturity. 

296.  Instruments  payable  on  demand,  or  at  sight,  when  over- 

due. 

XV 


TABLE    OF    COMKNTS. 

Skctiov  L".t7.  Transfer   when    iiistallineut  of    priucipal   or   interest    if 
overdue. 

21)8.  Transfer  ou  last  day  of  grace. 

299.  Purchaser  without  notice. 

300.  Actual  and  constructive  notice. 

301.  Constructive  notice  in  respect  to  accommodation  paper. 

302.  Lis  pendens  —  Garuishnieut  and  trustee  process  —  Public 

records. 

303.  Burden  of  proof  as  to  bona  Me  ownership. 

304.  Tiie  riglits  and  powers  of  pledgees  of  commercial  paper. 

305.  Bona  Jide  holders  of  commercial  paper  secured  by  mort- 

gage. 


CHAPTER    XV. 

PRESENTMENT  FOR  PAYMENT. 

Section  310.  The  necessity  for  presentment  —  Effect  on  accrumeut  of 
interest. 

311.  By  whom  presentment  must  be  made. 

312.  When  possession  evidence  of  holder's  right  to  present  for 

payment. 

313.  To  whom  presentment  should  be  made. 

314.  The  place  of  presentment. 

315.  The  time  of  presentment  —  Days  of  grace. 
31G.  Computation  of  time  —  Effect  of  legal  holidays. 

317.  \t  what  hour  of  the  day  presentment  should  be  made. 

318.  Mode  of  presentment. 


CHAPTER     XVI. 

PROTEST. 

Skction  321.  The  object  and  necessity  of  protest. 

322.  By  whom  protest  should  be  made. 

323.  Where  protest  should  be  made. 

324.  By  whom  should  presentment  be  made  in  preparation  for 

protest. 

325.  Noting  the  dishonor  and  extending  the  protest. 

326.  The  contents  of  certificates  of  protest. 

327.  Protest,  evidence  of  what. 

xvi 


TABLE    OF    CONTENTS.      . 

CHAPTER    XVII. 

NOTICE  OF  DISHONOR. 

Section  334.  Nature  and  necessity  of  notice. 

335.  Who  may  give  the  notice. 

336.  To  whom  notice  should  be  given. 

337.  The  time  allovred  for  giving  notice. 

338.  Mode  of  giving  notice,  when  important. 

339.  Mode  of  giving  notice  when  parties  reside  in  same  place. 

340.  How  and  where  personal  notice  must  be  sei'ved. 

341.  Mode  of  serving  notice  when  parties  reside  in  different 

places. 

342.  To  what  post-office  notice  should  be  addressed. 

343.  What  is  meant  by  "•'  residing  at  same  place." 

344.  What  constitutes  notice  —  May  be  verbal  or  written. 

345.  A  sufficient  description  of  the  bill  or  note. 

346.  Statement  of  dishonor  and  protest. 

847.  Statement  that  holder  looks  for  payment  to  party  notified. 
348.  Allegation  and  proof  of  notice. 

CHAPTER    XVIII. 

CIRCUMSTANCES   WHICH  WILL  EXCUSE  WANT  OF  PRESENT- 
MENT, PROTEST  AND  NOTICE. 

Sbction  354.  War,  political  and  social  disturbances,  pestilence,  confla- 
gration, floods,  etc. 

355.  Drawing  without  right  to  expect  acceptance  and  payment. 

356.  What  relations  between  the  parties  will  excuse  want  of 

presentment  and  notice. 

357.  When  the  note  is  void. 

358.  Inability  to  discover  the  address  of  parties. 

359.  What  is  due  diligence  in  making  inquiries  after  parties. 

360.  Sickness  and  death  of,  or  accident  to  the  holder. 

361.  Delay  in  receipt  of  the  paper. 

362.  When  party  has  received  security  for  his  secondary  lia- 

bility. 

363.  Waiver  of  presentment  and  notice. 

364.  Waivers  made  after  execution  and  before  maturity  of  the 

paper. 

365.  Waivers  after  maturity. 

366.  What  will  not  excuse  default  iu  presentment  and  notice. 

367.  Transfer  by  delivery  as  security. 

b  xvii 


TABLE    OF    CONTENTS. 


CHAPTER    XIX. 

PAYMENT  AND  ITS  EFFECTS. 

Section  371.  Payment  distinguished  from  sale  or  transfer. 

372.  Who  may  make  payment. 

373.  What  payor  can  demand. 

374.  To  -whom  payment  may  be  made. 

375.  Payment  nuule  with  what. 

376.  Effect  of  payment. 

377.  Appropriation  of  payment. 

378.  Payment  snpra  protest,  or  for  honor. 

379.  Payment  by  note  or  bill,  when  absolute  or  conditional. 

380.  Presumptions  in  respect  to  absolute  and  conditional  pay- 

ments,  how  rebutted. 

381.  Right  of  action  suspended  by  taking  bill  or  note  in  pay- 

ment  of  debt. 

382.  Duties  of  holders  of  bill  or  note  taken  in  payment. 


CHAPTER    XX. 

FORGERY  AND  ALTERATION  OF  COMMERCIAL  PAPER. 
SkCTION  391.  Definition  and  nature  of  forgery. 

392.  Forgery,  alteration  and  spoliation  distinguished. 

393.  Presumption  as  to  time  of  alteration  and  burden  of  proof. 

394.  What  are  material  alterations. 

395.  What  are  immaterial  alterations  —  Correction  of  mistakes. 

396.  The  effect  of  authorized  alterations. 

397.  Rights  of  bona  fide  holder  of  altered  bill  or  note. 

398.  Effect  of  adoption  of  a  forged  signature  as  one's  own. 

399.  When  one  is  estopped  from  denying  the  genuineness  of 

another's  signature. 

400.  Recovery  of  money  paid  on  forged  instruments. 

CHAPTER    XXI. 

EXCHANGE  AND  RE-EXCHANGE,  AND  DAMAGES. 

Sbction  405.  Exchange  and  re-exchange  explained. 

406.  Statutory  damages  in  lieu  of  re-exchange. 

407.  Indorsers  liable  for  re-exchange  or  damages. 

408.  Is  acceptor  liable  for  re-exchange, 
xviii 


TABLE    OF    CONTENTS. 

Section  409.  What  law  determiues  liability  for  re-exchange. 

410.  Ke-exchan£:e  and  damages  upon  promissory  notes. 

411.  Effect  of  part  payment  on  claim  for  re-exchange. 

412.  Interest  —  what  rateable  recover. 


CHAPTER    XXII. 

THE   RIGHTS   AND  LIABILITIES    OF   SURETIES  AND  GUAR- 
ANTORS. 

Section  415.  Suretyship  and  guaranty  distinguished. 

416.  Forms  and  kinds  of  guaranties. 

417.  The  consideration  of  guaranties. 

418.  How  affected  by  the  statute  of  frauds. 

419.  Negotiability  of  guaranties. 

420.  Notice  of  acceptance  of  guaranty. 

421.  Necessity  for  demand  of  principal  and  notice  of  default  to 

guarantor. 

422.  Concealed  sureties  as  accommodation  parties  —  Nature  of 

their  liability  —  Admissibility  of  parol  evidence  to  prove 
real  character. 

423.  What  acts  will  discharge  guarantors  and  sureties. 

424.  Continued  —  Surrender  of  securities  and  extension  of  time 

of  payment. 

425.  Presumption  of  indulgence,  arising  from  receipt  of  secu- 

rities. 

426.  The  remedies  of  the  surety  —  Contribution. 


CHAPTER     XXIII. 

CHECKS. 

SteCTiON  430.  Definition. 

431.  Checks  payable  to  order. 

432.  Checks  are  drawn  on  bank  or  banker. 

433.  Apparently  and  presumptively  drawn  against  a  deposit. 

434.  It  must  be  payable  on  demand  without  grace. 

435.  The  form  and  formalities  of  the  check. 

436.  Certification  of  checks. 

437.  Form  of  certification. 

438.  Who  may  certify  for  tlae  bank. 

439.  What  checks  may  1)e  certified  and  when. 

440.  Negotiability  and  transfer  of  checks. 

441.  Memorandum  checks. 

xix 


TABLE    OF    CONTENTS. 

Section  442.  Prosuutmeut,  Notice  ami  Protest  of  Checks. 

443.  Witliin  M'hat  time  must  clicck  be  presented. 

444.  Whetlier  check  cim  be  presented  by  mail. 

445.  Excuses  for  failure  or  delay  in  demand  and  notice  of  dis- 

honor. 
44G.  When  is  a  check  considered  stale  or  overdue. 

447.  The  right  to  draw  against  deposits  —  How  must  check  b« 

executed. 

448.  Whether  death  revokes  check. 

449.  Conditions  which  the  bank  may  exact,  before   honoring 

check. 

450.  Order  of  payment. 

451.  Forgeries  and  alterations. 

452.  The  right  of  checkholders  to  sue  the  bank. 

453.  Right  of  bank  to  offset  amount  due  by  checkholder. 

454.  Overchecks. 

455.  Actual  and  presumptive  rights  and  liabilities  of  the  drawer 

of  a  check. 

456.  Payment  by  checks. 


CHAPTER    XXIV. 

UNITED   STATES   TREASURY  NOTES,    BILLS   OF  CREDIT,   AND 

BANK  NOTES. 

Section  4C0.  Paper  money  or  currency. 

461.  United  States  treasury  notes. 

462.  United  States  silver  and  gold  certificates. 

463.  Bills  of  credit. 

464.  Bank  notes  — Post-notes. 

465.  When  bank  notes  are  overdue  —  Statute  of  limitations. 

466.  Liability  of  transferrer  of  bank  notes. 

467.  Lost  or  destroyed  bank  notes. 

468.  National  bank  notes. 


CHAPTER    XXV. 

COUPON  BONDS. 

Section  471.  Definition  and  nature  of  coupon  bonds. 

472.  Who  may  execute  coupon  bonds. 

473.  Negotiability  of  coupon  bonds  —  Rights  of  the  holder  of 

the  same. 

474.  To  whom  payable — Transfer  by  indorsement  or  delivery- 
XX 


TABLE   OF    CONTENTS. 

Section  475.  The  formal  parts  of  boud  aud  coupon — Seal  not  neces- 
sary. 

476.  Presentment  of  coupons  for  payment. 

477.  Interest  aud  exchange  on  bond  and  coupon. 

478.  Actions  on  bonds  and  coupons. 

479.  When  consideration  paid  to  corporation  for  Invalid  bond 

may  be  recovered. 

480.  When  municipal  corporation  has  power  to  Issue  negoti- 

able coupon  bonds. 

481.  For  what  objects  may  municipal  corporations  be  empow- 

ered to  issue  bonds. 

482.  What  defenses  may  be  set  up  against  bona  fide  holders  of 

municipal  bonds. 


CHAPTER    XXVI. 

CERTIFICATES  OF  DEPOSIT. 

Section  485.  Origin  and  nature  of  certificates  of  deposit. 

486.  Transfer  and  negotiability  of  certificates  of  deposit. 

487.  Overdue  certificates. 

488.  Necessity  for  demand  —  Statute  of  limitations. 

489.  Payment  by  transfer  of  certificate  of  deposit. 


CHAPTER     XXVII. 

BILLS  OF  LADING. 

Section  491.  Definition  and  nature  of  bills  of  lading. 

492.  Form  and  contents  of  the  bill  of  lading. 

493.  Transfer  of  bills  of  lading— -Their  negotiability. 

494.  Effect  of  attaching  bill  of  lading  to  draft  on  vendee  for 

the  purchase  money. 


CHAPTER    XXVIII. 

SUNDRIES. 

Section  497.  Certificates  of  stock. 

498.  Receiver's  certificates. 

499.  Warehouse  receipts. 

500.  Letters  of  credit  and  circular  notes. 

xxi 


TABLE   OF   CONTENTS. 

CHAPTER    XXIX. 

CONFLICT  OF  LAWS  IN  RELATION  TO  COMMERCIAL  PAPER. 

Section  506.  General  principles. 

507.  What  law  governs  the  liability  of  maker,  drawer  and  ac- 

ceptor, 

508.  What  law  governs  the  liability  of  indorsers. 

609.  What  law  governs  formalities  in  respect  to  presentment, 
protest  and  notice. 

510.  Law  applicable  to  stamps  on  commercial  paper. 

511.  Law  relating  to  payment,  interest  and  damages, 
xxii 


THE    LAW 


OF 


COMMERCIAL    PAPER. 


CHAPTER    I. 

THE  ORIGIN  AND  FUNCTIONS  OF  COMMERCIAL  PAPER. 

Section  L  Commercial  paper  defined.  , 

2.  Bills  of  exchange. 

3.  Foreign  and  inland  bills. 

4.  Sets  of  foreign  bills.  * 
6.  The  effect  of  a  bill  of  exchange. 

5a.  Bill  of  exchange  for  a  part  of  a  fund. 
56.  Bill  of  exchange  for  whole  of  a  fund. 
5c.  Bill  of  exchange,  not  drawn  on  a  particular  fund. 

6.  Promissory  note,  what  is. 

7.  Transfer  by  indorsement. 

8.  Construction  of  ambiguous  instruments. 

§  1.  Commercial  paper  defined.  —  Commercial  paper 
may  be  defined  to  include  all  those  instruments  of  indebted- 
ness, which  are  treated  and  used,  in  the  commerce  of  the 
world,  as  the  equivalents  or  representatives  of  money, 
or  which  are  given  the  characteristics  of  money  in  the 
furtherance  of  commercial  ends.  Negotiable  paper  or  in- 
struments, are  synon3^mous  terms.  At  a  very  early  day  in 
the  history  of  primitive  peoples,  the  commerce  was  con- 
ducted exclusively  by  barter  and  exchange  of  commodities. 
A  given  number  of  cattle  would  be  exchanged  for  a  given 

1 


'5     1        OlIKHX   AND  FINCTIONS  OV  COMMKItCI AL   I'Al'KU.     [cil.  I. 

aumber  of  horses,  or  so  nuiny  bushels  or  measures  of  wheat 
for  :i  certain  quantity  of  sonic  other  commodity.  But  ahnost 
in  tht'  dawn  of  history,  the  use  and  vahic  of  money  for  the 
facilitation  of  trade  were  recognized,  and  instead  of  barter 
and  exchan<Te,  it  became  the  common  custom  to  sell  the  com- 
modify  for  so  man}^  pieces  of  money.  At  first  the  precious 
metals  were  used  in  bullion,  but  the  advance  was  soon  made 
to  the  stamping  and  coining  of  pieces  of  certain  fixed  weight 
and  denomination.  For  a  very  long  time,  the  employment 
of  money  seemed  to  satisfy  every  demand  of  commerce ; 
but  finally  its  development  and  extension  caused  the  actual 
nianual  transfer  of  the  money,  particularly  when  it  had  to 
be  transported  from  place  to  place,  to  become  exceedingly 
burdensome  and  costly.  There  was  also  great  danger  of 
robbery  and  destruction  in  the  transportation  of  money-. 
The  need  of  a  representative  of  money,  which  could  safely 
and  easily  be  transferred  from  one  person  to  another  and 
from  place  to  place,  was  thus  felt,  and  supplied  by  the 
various  kinds  of  commercial  paper,  which  have  from  time 
1o  time  been  adopted  by  the  commercial  world. 

The  most  striking  characteristic  of  money  is  its  currency, 
its  easy  circulation  from  hand  1o  hand  for  whatever  it  is 
worth.  Jt  has  always  been  the  rule  of  law  in  England  and  in 
this  country,  that  the  purchaser  of  a  chattel,  of  a  horse  or  a 
cow,  could  acquire  no  better  title  to  it,  than  his  vendor  pos- 
sessed. And  if  the  vendor's  title  was  defective  for  any  rea- 
son, because  he  had  stolen  or  appropriated  what  belonged 
to  another,  the  good  faith  of  the  vendee  and  his  ignorance 
of  the  wrongful  appropriation  would  not  furnish  him  with 
any  defense  to  the  real  owner's  action  of  trover  or  replevin. 
There  was  an  exception  to  this  rule,  recognized  by  the  En 
glish  law,  in  the  case  of  goods  sold  in  the  open  market  or 
fair.  But  this  exception  does  not  exist  in  the  United 
States,  and  the  rule  is  universally  enforced.  But  it  is 
l)robably  the  law  in  all  civilized  communities,  that  money 

9 


CH.  I.]    ORIGIN  AXD  FUNCTION'S  OF  COMMERCIAL  PAPKR,       §     1 

is  not  subject  to  this  rule;  that  if  one  misappropriates"^ 
money  belonging  to  another,  and  transfers  it  for  vaUie  to  a 
third  person,  who  receives  it  in  good  faith  and  without 
knowledge  of  the  true  ownership,  the  third  person  acquires 
an  absolute  title  to  it,  against  even  the  true  owner.  The  : 
true  owner  can  only  recover  it  of  those  who  receive  it 
with  actual  or  constructive  notice  of  the  defect  of  title,  or 
without  consideration.^  The  reason  sometimes  assigned 
for  this  rule  in  respect  to  money  is  that  there  is  no  way  in 
which  one  piece  of  money  can  be  distinguished  from  an- 
other piece  of  the  same  denomination.  But  this  is  not  true. 
As  Professor  Parsons  has  said,  "  In  many  cases  it  can  be 
identified;  but  the  principle  applies  equally,  whether  it  carj 
be  identified  or  not.  The  true  reason,  as  said  by  Lord 
Mansfield,  is  that  it  has  passed  in  currency.'"'^  It  was,  no/ 
doubt,  due  to  the  necessities  of  the  commercial  world  that 
money,  as  the  medium  of  exchange,  was  given  this  charac- 
ter of  currency,  and  when  each  variety  of  commercial 
paper,  in  consequence  of  the  demands  of  commerce,  was 
adopted  as  a  representative  of  money,  the  same  character 
was  given  to  it  by  judicial  legislation  or  legislative  enact- 
ment.^    This  characteristic   is    possessed    by  all  classes  of 

i  Miller  v.  Eace,  1  Burr.  4.32;  Goliiiiitly  r.  Reynolds,  Lofft.  88;  Glyn 
r.  Baker,  13  Ea,st,  510;  Wookey  v.  PoLe,  4  B.  &  Aid.  1;  Le  Bretou  v. 
Pierce,  2  Allen,  14. 

2  2  Par.sous' Notes  and  Bills,  110.  <' 'Tis  pity  that  reporters  some- 
times catch  at  quaint  expressions  that  may  happen  to  be  dropped  at  the 
bar  or  bench,  and  mistake  their  meaning.  It  has  been  quaintly  said, 
•  that  the  reason  why  money  cannot  be  followed  is,  because  it  has  no 
earmark;  '  Init  this  is  not  true.  The  true  reason  is,  upon  account  of  the 
cun-ency  of  it;  it  cannot  be  recovei-ed  after  it  has  passed  in  currency. 
So  in  case  of  money  stolen,  the  true  owner  cannot  recover  it  after  it  has 
been  paid  away  fairly  and  honestly  upon  a  valuable  and  bonajide  consid- 
eration; but  before  money  has  passed  in  currency,  an  action  may  be 
brought  for  the  money  itself."  Lord  Manstield  in  Miller  v.  Race,  1  Burr, 
452,  457. 

'  See  post,  §§  10-35,  for  a  full  discus.sjon  of  the  negotiability  of  com- 
mercial paper. 

3 


§    2       ORIGIN  AND  FUNCTIOXS  OF  COMMKRCIAL  I'APKIl.     [cH.    I. 

commercial  pa{)er,  aud  const  it  utcs  its  i)iimal  differentiation 
from  other  instruments  of  indebtedness. 


§  2.  Bills  of  exchange.  —  A  l)ill  of  exciianjre  is  an  un- 
conditional written  order  by  one  jierson  on  another,  direct- 
ing him  to  pay  to  a  third  person  or  to  his  order,  or  to  the 
bearer,  the  sum  of  money  therein  named. ^  He,  who  draws 
the  bill  is  called  the  drawer,  the  person  on  whom  it  is  drawa, 
the  drawee,  and  the  one  in  whose  favor  it  is  drawn,  to 
whom  or  to  whose  order  the  money  is  to  be  paid,  the 
payee.  Until  the  drawee  agrees  to  honor  the  bill,  he  is  un- 
der no  obligation  to  the  payee  or  holder.  But  when  he  ac- 
ce[)ts  it,  he  binds  himself  to  pay  the  sura  of  money  called 
•  for  by  the  bill.'-  The  name  "  bill  of  exchange,' '  is  adopted 
from  the  French  "  billet  de  change,"  and  indicates  very 
palpably  the  object  of  the  paper,  viz. :  the  exchange  or 
transfer  of  money  from  one  person  to  another.  It  is  not 
known  very  definitely,  when   bills  of  exchange  first  came 

1  Mr.  Daniels  deflaes  a  bill  of  exchange  as  "an  open  letter  addressed 
by  one  person  to  a  second,  directing  hira,  in  effect,  to  pay  absolutely  and 
at  all  events,  a  certain  sum  of  money  therein  named,  to  a  third  person  or 
to  any  other  to  whom  that  third  person  may  order  it  to  be  paid ;  or  it 
maybe  payable  to  bearer  or  to  the  drawer  himself."  1  Daniel's  Negotia- 
ble Instruments,  35.  Blackstone's  detinition  is  "  an  open  letter  of  re- 
quest from  one  man  to  another,  desiring  him  to  pay  a  sum  of  money 
therein  named  to  a  third  person  on  his  account."  2  Black.  Com.  4GG. 
"A  bill  of  exchange  is  an  unconditional  written  order  from  A.  to  B.,  di- 
recting B.  to  pay  C.  a  sum  of  money  therein  named."  Byles  on  Bills  (<>th 
Am.  ed.)  1.  *'A  bill  of  exchange  is  a  written  order  of  request,  ♦  *  * 
for  the  payment  of  money  absolutely  and  at  all  events."  Bayley  on 
Bills,  1.  Bayley's  definition  was  adopted  by  Kent  and  Story.  But  Judge 
Story,  while  commending  the  defiuitiou,  says:  "But  here  again  its 
peculiar  distinguishing  quality,  in  modern  times,  its  negotiability,  is 
omitted,  which,  although  not  by  our  law  essential  to  the  instrument,  is 
still  that  which,  practically  speaking,  among  merchants,  constitutes  its 
true  character."  Story  on  Bills,  §  3.  The  same  may  be  said  of  all  the 
definitions  cited  here.  But  tliey  will  not  for  that  reason,  be  misleading, 
if  this  general  characteristic  of  commercial  paper  is  kept  in  mind." 

*  See  post,  chapter  on  acceptance. 
4 


€11.  I.]    ORIGIX  AND  FUNCTIONS  OF  COMMERCIAL  PAPEU.       §    2 

into  use.  Certain  passages  in  the  writings  of  Isocrates 
and  Cicero  have  been  supposed  to  indicate  that  they  were 
in  use  among  tlie  Greeks  and  Romans.  It  is  certain  that 
on  one  occasion,  at  the  request  of  Cicero,  one  of  his  friends 
in  Rome,  who  had  money  payable  to  him  in  Athens,  di- 
rected his  Atlienian  debtor  to  pay  a  sum  of  money  to 
Cicero's  son.  It  is  extremely  likely  that  such  orders  were 
used  in  commerce  even  at  a  much  earlier  day.  But  it  is 
very  properly  observed  that  these  orders  did  not  resemble, 
nor  did  they  have  the  distinguishing  characteristics  of,  the 
modern  bill  of  exchange.^ 

It  is  not  definitely  known  at  what  period  the  modern 
bills  of  exchange  were  first  used  in  commerce,  but  it  will 
be  safe  to  say  that  they  were  already  in  use  in  the 
thirteenth  and  fourteenth  centuries.  Mr.  Parsons  says:'^ 
**  Bills  of  exchange,  which  at  first  were  not,  so  far  as 
our  evidence  extends,  negotiable,  were  in  use  in  Venice 
in  1272,  for  a  law  of  that  date  refers  to  them.  There 
are  traces  of  them  a  little  earlier;  and  the  different 
theories  which  ascribe  their  origin — always  on  some,  but 
never  on  certain,  evidence  —  to  the  Jews  when  oppressively 
expelled  from  their  homes,  to  the  Lombards  when  driven 
from  one  country  to  another  for  usury,  or  to  the  Guelphic 
Florentines  when  exiled  from  Italy  by  the  Ghibellines,  all 
concur  in  proving  that  they  were  in  use  among  the  com- 
mercial nations  of  Europe,  and  especially  along  the  shores 
of  the  Mediterranean,  about  five  centuries  ago,  and  that 
they  were  then  of  recent  introduction."  ^     It  is  claimed 

1  3  Kent  Com.  44;  Story  on  Bills,  §  6,  n.  4;  Pothier  de  Change,  Ji.  6; 
1  Daniel's  N^egotiable  Instruments,  4,  5;  1  Parsons'  N.  &  B.  1,  2. 

3  1  Parsons'  N.  &  B.  2.  "  This  method  is  said  to  have  been  brought 
into  general  use  by  the  Jews  and  Lombards  when  banished  for  their 
usury  and  other  vices,  in  order  the  more  easily  to  draw  their  effects  out 
of  France  and  England  into  those  countries  in  which  they  had  chosen  to 
reside.  But  the  invention  of  it  was  a  little  earlier ;  for  the  Jews  were 
banislied  out  of  Guienne  in  1287,  and  out  of  England  in  1290;  and  in  1236 

5 


§    3       OUIUIN  AND  FUNCTIONS  OF  COMMKKflAL  PAI'EK.     [CH.   I. 

that  Edward  I.,  of  Eufirljind,  in  1307,  prohibited  the  trans- 
portation of  money  collected  in  England  for  the  pope,  and 
directed  the  payment  to  be  made  by  way  of  exchange  ^^  per 
viam  cambii.''  ^  And  it  is  further  claimed  that  bills  of  ex- 
chani^c  were  employed  b}'  King  John  in  1202,  in  order  to 
make  remittances  to  his  agents  at  Kome.^  But  this  ques- 
tion is  not  possessed  of  any  practical  value,  beyond  its  his- 
torical interest,  and  with  this  general  statement  it  will  be 
dismissed  from  consideration.^ 

§  8.  Foreij^n  and  inland  bills. —  A  bill  of  exchange  is 
said  to  be  foreign,  when  it  is  drawn  in  one  country  and  made 
payable  in  another.  It  is  inland,  when  it  is  both  drawn  and 
made  payable  in  the  same  country.  A  bill  is  not  foreign 
because  parties  to  it  reside  in  different  States.  If  the 
drawer  and  drawee  live  in  different  States,  and  the  bill  is 
payable  in  the  same  State  in  which  it  is  drawn,  it  is  an  in- 
land bill,  notwithstanding  the  difference  in  the  residence  of 
parties.*  And  if  the  parties  reside  in  the  same  State,  but  the 
bill  is  drawn  in  one  State  and  made  payable  in  another  State,  it 

the  use  of  paper  credit  was  inti'oduced  into  the  Mogul  Euy)ire  iu  China." 
2  Black.  Com.  4(J7.  Chitty  says :  "  Other  authors  have  attributed  the 
invention  to  the  Florentines  -niieu,  being  driven  out  of  their  country  by 
the  faction  of  the  Gebelings  (Ghibellines),  they  established  themselves 
at  Lyons  and  other  towns.  On  the  whole,  however,  there  is  no  certainty 
on  the  subject,  though  it  seems  clear  foreign  bills  were  in  use  in  the 
fourteenth  century,  as  appears  from  a  Venetian  law  of  that  period ;  and 
an  inference  drawn  from  the  statute,  5  Rich.  II.  St.  1,  ch.  2,  warrants  the 
conclusion  that  foreign  bills  were  introduced  into  this  country  previously 
to  the  year  1381."     Chitty  on  Bills,  11. 

1  Anderson  on  Commerce,  vol.  I.,  pp.  373,  374,  quoted  in  1  Parsons'  N. 
&B.  4. 

2  Macpherson's  Annals  of  Commerce,  vol.  I.,  p.  3(^7,  quoted  in  1  Par- 
sons' N.  &B.  4. 

3  See  Kent's  Com.  71,72;  Chitty  on  Bills  10,  11 ;  Story  on  Bills,  §^  5-11 ; 
Montesquiese  Spirit  of  Laws,  B.  xxi.,  ch.  20;  Hallam's  Ints.  to  Lit.  of 
Europe,  vol.  I.,  p.  68;  Smith's  Wealth  of  Nations,  vol.  I.,  p.  38. 

<  Amner  u.  Clark,  2  Cromp.  M.  &  R.  468. 
6 


CH.  I.]    ORIGIN  AND  FUNCTIONS  OF  COMMERCIAL  PAPER.        §    5 

IS  a  foreign  bill.^  Inasmuch  as  the  demands  of  commerce  were 
different  in  the  two  cases,  inland  bills  came  into  use  at  a  much 
later  day  than  did  foreign  bills,  and  in  England  they  were 
first  used  about  the  reign  of  Charles  II. '^  Originally  there 
were  many  differences  recognized  by  the  law  between  for- 
eign and  inland  bills, -^  but  at  the  present  day  there  are  but 
two  important  differences.*  One  is,  that  where  a  bill  is 
foreign,  its  construction  and  interpretation  are  governed  by 
the  law  of  the  place  where  it  is  to  be  paid,  while  in  respect  to 
an  inland  bill,  being  payable  at  the  same  place  at  which  it  was 
drawn,  it  is  controlled  by  the  law  of  that  place*  The  second  i. 
diiferenceis,that  for  reasons  given  and  explained  elsewhere  ^ 
it  is  necessary  to  protest  a  foreign  bill  for  uou-paymeut,  in 
order  to  hold  the  drawer  and  indorsers  liable,  but  it  is  not 
neiiessary  to  protest  inland  bills.  In  determining,  whether 
bills  are  foreign  or  inland,  Ireland  is  held  by  the  English 
courts  to  be  foreign  to  England,  where  a  bill  is  drawn  in 
Ireland  and  payable  in  England.'^  And  so  also  in  this  coun- 
try are  the  States,  which  constitute  the  United  States,  con- 
sidered so  far  foreign  to  each  other  that  a  bill  is  held  to  be 
foreign,  which  is  drawn  in  one  State  and  made  payable  in 
another.^     A  bill  purporting  on  its  face  to  be  a  foreign  or 

1  Buckner  v.  Fiuley,  2  Pet.  58G. 

■•  1  Daniel's  Neg.  Instruments,  8;  Chitty  on  Bills  *21. 

^  It  had  to  be  shown  specially  that  the  use  of  inland  bills  was  custom- 
ar]  in  the  towns  in  which  the  parties  lived.  Butler  v.  Crips,  6  Mod.  29; 
Pij  laiey  v.  Hall,  Ld.  Raym.  175;  Chitty  on  Bills,  *il,  12.  And,  at  first, 
th?  custom  was  only  recognized  and  enforced  between  merchants. 
Brftmwicli  v.  Lloyd,  2  Lutw.  1585;  Sarsfleld  v.  Wiiherly,  Carth.  82. 

■'  See  subsequent  chapter  for  a  full  discussion  of  the  conflict  of  law 
in  lespect  to  commercial  paper. 

'  See  post,  chapter  on  Protest. 

6  Mahoney  v.  Ashliu,  2  B.  &  Ad.  478. 

'  Buckner  v.  Finley,  2  Pet.  586;  Lonsdale  v.  Brown,  4  Wash.  C.  C.  86, 
153;  Warren  V.  Coombs,  20  Me.  139;  Ticonic  Bank  u.  Stackpole,  41  Me. 
302;  Phoenix  Bk.  v.  Hussey,  12  Pick.  483;  Carter  v.  Burley,  9  N.  H.  558; 
Wells  V.  Wliitehead,  15  Wend.  527;  Warder  v.  Arell,  2  Wash.  (Va.)  298; 
Brown  v.  Fei'guson,  4  Leigh,  37;  Duncan  v.  Course,  3  Const.  R.  (S.  C.) 

7 


§    4       OKHHX  A\I>  FUNCTIONS  OF  COMMERCIAL  PAPER.     [CH.  I. 

inland  l)ill,  cannot  be  shown  by  parol  or  other  coUatera^ 
evidence  to  })e  respectively  an  inland  or  foreign  bill,  to  the 
detriment  of  third  persons  who  take  the  bill  without  any 
knowledge  of  its  hidden  character.^  But  the  true  character 
of  the  bill  may  be  shown,  where  it  will  not  work  a  detri- 
ment to  any  i)arty  to  the  bill,  particularly  when  the  bill 
cannot  be  sued  on  in  its  apparent  character  because  of  soin** 
legal  informality.'-  Where  the  bill  does  not  show  on  it>* 
face  that  it  is  a  foreign  bill,  its  character  must  be  specially 
averred,  since  courts  will  not  take  judicial  notice  of  the  sub- 
divisions of  foreign  states.  Thus  if  a  bill  is  drawn  in  Dublin 
and  made  payable  in  London,  the  courts  will  not  take  judi 
cial  notice  of  the  fact  that  the  two  places  are  in  different 
countries.^ 

§  4.  Sets  of  foreign  bills. — There  is  rarely  more  thaa 
one  copy  made  of  inland  bills;  but  in  consequence  of  tho 
inconvenience  and  delay  that  may  be  occasioned  by  the  los-a 
of  foreign  bills,  it  is  the  common  custom  throughout  the 
civilized  world  for  the  drawer  to  issue  several  copies  of  the 
bill,  usually  three,  but  sometimes  four;  and  these  copi<fl 
are  called  in  the  law  a  set  of  exchange,  and  constitute  one 
bill.  So  fixed  is  the  custom  that  it  appears  to  be  the  right 
of  the  purchaser  of  a  foreign  bill  to  have  the  full  set  mad(; 

100;  Donegan  v.  Wood,  49  Ala.  242;  Todd  v.  Neale  Adm'r,  49  Ala.  2iH>; 
Carters.  Union  Bk.,  7  Humph.  548;  Chenowith  y.  Chamberlain,  6B.  Mon. 
60;  State  Banki;,  Hayes,  3  Ind.  400.  But  see  Miller  v.  Hackley,  5  Johns. 
375. 

1  Smith  V.  Mingay,  1  Maule  &  S.  87;  Sennig  v.  Ralston,  23  Pa.  St.  137; 
Strawbridge  v.  Robinson,  5  Oilman,  470. 

2  Abraham  v.  Dubois,  4  Camp.  269;  Jordaine  v.  Lashbrooke,  7  T.  R. 
601 ;  Steadman  V.  Duhamel,  1  C.  B.  838;  Bire  v.  Mcft-eau,  2  C.  &  P.  (13 
Eng.  L.  R.)  376. 

3  Kearney  v.  King,  18  E.  C.  L.  II.  28.  See  also,  to  the  same  effect, 
Riggin  r.  Collier,  6  Mo.  568;  Cook  v.  Crawford,  4  Texas,  420;  Andrew* 
V.  Hoxie,  5  Texas,  171 ;  Yale  v.  Wood,  30  Texas,  17. 


CU.  I.]    OKIGIN  AND  FUNCTIONS  OF  COMMERCIAL  PAPER.        §    4 

out  for  him,  containing  the  usual  number  of  parts. ^  It  is 
also  the  custom,  for  the  protection  of  the  drawer,  and  to 
give  notice  to  all  purchasers  of  the  connection  between  the 
several  parts,  to  make  in  each  part  a  reference  to  the  other 
parts,  for  example:  "Pay  to  my  first  exchange,  the 
second  and  third  remaining  unpaid;"  or  "  pay  this  second 
exchange,  the  first  and  third  remaining  unpaid,"  etc.  If 
some  such  clause  were  not  inserted,  the  drawer  might  be 
held  liable  upon  more  than  one  part  by  their  transfer  to 
innocent  purchasers,-^  Either  part  may  be  negotiated,  and 
when  any  one  of  the  parts  is  accepted  and  paid,  all  the 
others  are  extinguished,  even  in  the  hands  of  subsequent 
purchasers,  without  actual  notice  of  the  negotiation  of  the 
other  part.^  It  is  the  duty  of  a  purchaser  of  a  foreign  bill 
to  inquire  after  the  other  parts  which  are  missing,  and  he 
cannot  therefore  be  an  innocent  purchaser  where  one  of  the 
parts  has  been  already  negotiated.*  Since  any  one  of  the 
parts  may  be  negotiated,  the  party  entitled  to  the  bill  should 
demand  the  delivery  of  all  the  parts  to  him,  and  can  com- 
pel their  delivery  to  him,  even  from  a  bona  fide  holder, 
who  subsequently  gets  possession  of  one  of  the  parts. ^  But 
the  holder  or  indorser  who  thus  fraudulently  sells  two  parts 
to  different  purchasers,  will  be  held  liable  to  both  of  them.^ 

1  1  Parsons'  N.  &,'&.  58-60;  Story  on  Bills,  §  66;  Kearney  v.  West 
Granada  Mining  Co.,  1  H.,  &  N.  412;  Daniel's  Neg.  Instruments,  121; 
Byles  on  Bills,  577-581. 

2  1  Parsons'  N.  &B.  59;  Byles  on  Bills,  579;  1  Daniel's  Negotiable  In- 
struments, 122;  Davison  v.  Robertson,  3  Dow.  218. 

3  Holdsworth  v.  Hunter,  10  B.  &  C.  449;  Miller  v.  Hackley,  Anthon, 
68;  Durkin  v.  Cranston,  7  Johns.  442;  Wells  v.  Whitehead,  15  Wend. 
527;  Ingraham  v.  Gibbs,  2  Dallas,  134;  Kenworthy  v.  Hopkins,  1  Johns. 
Cas.  107. 

*  Lang  V.  Smyth,  7  Bing.  (20  E.  C.  L.  R.)  284-294. 

5  Penard  v.  Klochman,  32  L.  J.  Q.  B.  83;  s.  c.  3  Best  &  Smith  (113  E. 
C.  L.  R.)  388;  Holdsworth  v.  Hunter,  10  B.  &  C.  449;  Pereira  v.  Jopp, 
cited  in  10  B.  &  C.  450,  note  a. 

6  Hodsworth  v.  Hunt,  10  B.  &  C.  449. 

9 


§    5       OUUaX  AND  FUNCTIONS  OF  CO.M.MEKCIAL  I'APEIt.     [CH.  I. 

It  is  said  to  be  the  custom  in  continental  Europe,  particu- 
larly in  France,  to  send  on  the  original  bill  to  the  drawee 
for  his  acceptance,  while  a  cop\^  is  Ix'ing  negotiated.^  But 
the  custom  is  not  recognized  in  the  United  States,  or  in 
England.-  The  drawee  should  accept  but  one  of  the  parts, 
and  pay  the  bill,  only  upon  presentation  of  the  part  which 
he  accepted.  His  acceptance  of  more  than  one  part  would 
render  iiim  liable  on  both  parts,  if  they  were  transferred  to 
different  innocent  holders  ;  and  if  he  should  pay  the  bill 
upon  the  presentation  of  the  part  which  had  not  been  ac- 
cepted, he  may  well  be  held  liable  on  presentation  of  the 
part  which  he  had  accepted.-^  In  any  suit  upon  the  bill 
against  the  drawer  or  indorser,  the  part  which  had  been  pro- 
tected must  be  "produced  in  evidence.*  A  copy  of  the  bill 
may  be  protested,  instead  of  the  original;^  and  while  there 
is  some  authority  for  claiming  that  in  an  action  against 
the  drawer  or  indorser  all  of  the  set  must  be  produced, 
or  their  absence  satisfactorily  accounted  for,**  the  better 
oi)inioii  seems  to  be  that  this  is  not  necessary.  If  the  ori- 
ginal or  another  copy  had  been  previously  negotiated  or  paid, 
the  burden  of  proving  this,  is  thrown  upon  the  defense.^ 

§  T).  The  effect  of  a  bill  of  exchange.^  —  It  is  the  com- 
mon understanding,  and  usually  it    is  the  fact,  that  when 

1  1  Dauiel's  Neg  lust.  122;  Byles  ou  Bills,  580. 

2  I  Parsous'  N.  &  B.  60. 

3  Byles  ou  Bills,  579,  580;  Holdsworlh  v.  HSuter,  10  B.  &  C.449;  Wright 
V.  McFall,  8  La.  Auu.  120. 

■«  Johusou  u.  Offut,  4  Met.  (Ky.)  19;  Wells  v.  Whitelu-ad,  15  Weud. 
527;  ;5  Keut's,  Com.  109. 

^  Dehers  v.  Harriot,  1  Show.  163;  1  Parsons'  N.  &  B.  60;  Byles  on 
Bills,  580. 

«  See  Daniel's  Neg,  lust.  123. 

"  Downes  v.   Church,  13  Pet.  205;  Commercial   Bank  v.    Kouth,  7  La. 

Auu.  128. 

f  See  chapter  ou  checks  for  a  discussion  of  the  question  whether 
a  (berk  operates  as  an  equitable  assiirnmeut  pro  tanto  of  the  fund  on. 
dejtosii. 

10 


CH.  I.]    ORIGIN  AND  FUNCTIONS  OF  COMMKKCIAL  PAPKIl.        §    5 

one  person  draws  a  bill  of  exchange  ujjon  another,  in  favor 
of  a  third  party,  the  drawee  has  funds  bek)n<>ing  to  the 
drawer,  or  he  is  indebted  to  the  drawer,  in  amount  suth- 
cient  to  cover  the  sum  of  money  called  for  by  the  bill. 
The  bill  is  received  by  the  payee  in  reliance  upon  the  sup- 
posed fact,  although  it  is  not  necessary  to  the  validity  of  the 
bill  and  the  obligation  of  the  drawee,  if  the  drawee  has 
accepted  it.  When  the  drawee  has  accepted  uncontliti on 
ally,  his  obligation  to  pay  is  absolute  and  not  at  all  depend- 
ent upon  his  possession  of  funds  belonging  to  the  drawer.y^ 
But  cases  may  and  often  do  arise,  in  consequence  of  the 
insolvency  of  the  drawer  or  drawee,  or  of  both,  the  only 
available  remedy  for  the  payee  or  holder  of  the  bill  is  to 
seize  hold  of  the  funds  or  debt,  against  which  the  bill  was 
supposed  to  have  been  drawn,  and  secure  its  appropriation 
to  the -satisfaction  of  the  bill.  But  in  order  that  this  end 
may  be  attained,  it  is  necessary  to  show  that  a  bill  of  ex- 
change operates  as  an  assignment  pro  tanlo  of  tlie  fund  or 
debt  against  which  it  was  drawn.  Until  very  lately  modi- 
lied  by  statute,  it  has  been  the  invariable  common-law  rule 
that  no  cliose  in  action  may  be  assigned,  it  being  supposed 
to  be  contrary  to  public  policy  to  permit  such  assign- 
ments.^ And  this  rule  has  in  form  been  strictly  enforced 
in  all  courts  of  law,  wherever  it  has  not  been  repealed  by 
statute,  up  to  the  present  day.  But  courts  of  equity  have 
for  a  long  time  disregarded  the  rule  in  its  application  to 
cases  over  which  they  could  acquire  jurisdiction,  recog- 
nized the  right  of  the  assignee  of  a  cliose  in  action  to  sue 
on  it  in  his  own  name,  whenever  the  action  could  be  maiii- 


'  Lord  Coke  says:  "  The  great  wisdom  aud  policy  of  the  sages  au<l 
founders  of  our  law  have  provided  that  uo  possibility,  title,  right  nor 
thing  iu  action  shall  be  granted  to  strangers,  for  that  would  be  the  occa- 
sion of  multiplying  contentions  and  suits  of  great  oppression  of  the 
people,  and  chiefly  of  terre  tenants,  and  subversion  of  the  due  and  equal 
execution  of  justice."     Lampet's  Case,  10  Rep.  48. 

11 


§   5a     ORIGIN  AND  FUNCTIONS  OF  COMMERCIAL  PAPER.     [CH.  I. 

tained  in  an  equity  court,  and  compelled  the  assignor  by 
injunction  to  permit  the  assignee  to  bring  in  the  former's 
name  whatever  suit  at  law  may  be  necessary  for  the  attain- 
ment of  his  rights.  In  consequence  of  this  common-law 
prohibition,  it  would  be  impossible  to  show  that  the  bill 
of  exchange  operated  as  a  legal  assignment  of  the  indebt- 
edness, against  which  it  was  drawn. ^  The  most  that  can 
})e  claimed  for  it,  in  those  States  in  which  this  common- 
law  rule  has  not  been  abrogated,  is  that  it  is  an  equitable 
assignment  of  the  fund  or  debt. 

§  5a.  Bill  of  exchange  for  a  part  of  fund.  —  All  the 

cases  agree  in  stating  that  a  bill  of  exchange,  drawn  for  a 
part  of  a  debt  due  to  the  drawer  by  the  drawee,  will  not 
operate  as  an  equitable  assignment  pro  tanto  of  that  debt, 
at  least  as  against  the  drawee,  unless  he  has  accepted;  the 
principal  reason  for  the  conclusion  being  that  a  different 
rule  would  enable  a  creditor  to  harass  and  increase  the  bur- 
den upon  his  debtor,  by  splitting  up  one  indebtedness  into 
many  distinct  debts,  with  independent  rights  of  action. 
And  this  the  law  does  not  permit,  except  with  the  consent 
of  the  debtor.  By  accepting  the  bill  of  exchange  for  a 
part  of  the  debt,  the  drawee  gives  his  assent  to  this  in- 
crease of  the  burden. 2     But  if   this  be  the  onh^  objection 

1  "  It  is  clearly  settled  that  no  action  at  law  will  lie  in  favor  of  the 
holder  of  a  bill  of  exchange  against  the  drawer,  unless  he  accepts  the 
bill."  Ruggles,  J.,  in  Harris  v.  Clark,  3  Coinst.  117.  "  There  is  no  such 
privity  between  hira  (the  drawee)  and  the  holder  as  can  entitle  the  latter 
to  maintain  an  action  against  hira."  Duer,  J.,  in  N.  Y.,  and  Va.  State 
Bk.  V.  Gibson,  5  Duer,  574.  See,  also,  Tieruan  v.  Jackson,  5  Pet.  580; 
Yates  V.  Bell,  3  B.&  Aid.  643;  Williams  v.  Everett,  14  East,  682. 

2  "  The  reason  of  this  principle  is  plain.  A  creditor  shall  not  be  per- 
mitted to  split  up  a  single  cause  of  action  into  many  actions,  without 
the  consent  of  his  debtor,  since  it  may  subject  him  to  many  embarrass- 
ments and  responsibilities  not  contemplated  in  his  original  contract. 
He  has  a  right  to  stand  upon  the  singleness  of  his  original  contract, 
and  to   decline  any  legal  or  equitable  assignments  to  which   it  may  be 

12 


CII.  I.]    ORIGIN  AND  FUNCTIONS  OF  COMMERCIAL  PAPER.      §   [)b 

to  the  construction  that  iin  unaccepted  bill  of  exchange  for 
a  part  of  a  debt  or  fund  operates  as  an  equitable  assign- 
ment pro  ianto,  the  objection  only  holds  good  in  favor  of ^ 
dud  as  against,  the  drawee ;  and  if  the  entire  debt  or  fund 
is  brought  into  court  in  an  equitable  proceeding,  to  which 
all  the  persons  interested  have  been  made  parties,  there 
can  be  no  reason  why  the  bill  should  not  be  declared  to  be 
an  equitable  assignment  pro  tanto  of  the  fund  or  debt,  as 
against  the  drawer  and  his  privies. ^ 

§  56.  Bill  of  exchange  for  whole  of  fund. — So,  also, 
if  there  were  no  other  objection  to  the  assignment  theory* 

broken  into  fragments.  When  he  undertakes  to  j^ay  an  integral  sum  to 
his  creditors,  it  is  no  part  of  his  contract  that  he  shall  be  obliged  to  pay 
in  fragments  to  any  other  persons.  So  that,  if  the  plaintiff  could  show 
a  partial  assignment  to  the  extent  of  the  bills,  it  would  not  avail  him 
in  support  of  the  present  suit."  Story,  J.,  in  Mandeville  v.  Welch,  5 
Wheat.  277.  See  to  the  same  effect,  Harris  v.  Comstock,  3  N.  Y.  115, 
110;  Robins  V.  Bacon,  3  Greenleaf,  346;  Gibson  v.  Cooke,  20  Pick.  15; 
Cowperthwaite  v.  Sheffield,  1  Saudf.  416;  Gibson  v.  Finley,  5  Md.  Ch. 
75;  Hopkins  v.  Beebe,  2  Casey,  85;  Poydras  v.  Delamere,  13  La.  (0.  S. 
1838)  98;  Weinstock  v.  Bellwood,  12  Bush,  139;  Christmas  v.  Russell, 
14  Wall.  84 ;  Noe  v.  Christie,  51  N.  Y.  273;  Shaver  v.  West.  U.  Tel.  Co., 
57  N.  Y.  401;  Att'y-Gen.  v.  Continental  Life  Ins.  Co.,  71  N.  Y.  325; 
Bull  V.  Tuttle,  81  N.  Y.  457;  Chase  v.  Alexander,  6  Mo.  App.  506. 

1  Mr.  Daniel  says  that  such  a  bill  or  order  **  for  a  part  of  a  fund 
does  operate  as  an  equitable  assignment  pro  tanto  as  between  the  drawer 
and  payee,  because  obviously  so  intended.  But  as  between  drawer  and 
payee  on  the  oue  side,  aud  the  drawee  on  the  other,  it  creates  no  obliga- 
tion on  the  latter  to  pay  it,  as  he  has  a  right  to  insist  on  an  integral  dis- 
charge of  his  debt.  And  if  the  creditor  give  a  subsequent  order  for  the 
whole  amount,  he  may  pay  it  with  impunity,  as  he  thus  discharges  his 
whole  debt  in  its  entirety  at  once.  But  if  the  payee  or  indorsee  goes 
into  equity,  or  the  parties  are  brought  therein  by  any  proceeding,  so 
that  all  of  them  are  before  the  court,  the  holder  of  the  order  may  en- 
force it  as  an  equitable  assignment  against  all  subsequent  claimants, 
whether  by  assignment  from  the  drawer,  or  by  legal  process  served  upon 
the  drawee."  1  Daniel  Negot.  Inst.  26.  See  to  the  same  effect.  Story 
Eq.  Jur.,  §  1044;  3  Lead.  Cas.  in  Equity,  356;  Field  v.  Mayor  of  N.  Y  , 
2  Seld.  170;  Poydras  v.  Delamere,  13  La.  98. 

13 


§   b/j     ORIGIN  AND  FUxXCTIOXS  OF  COMMERCIAL  TAPER.     [ClI.  I. 

it  must  be  concluded,  that  an  unaccepted  bill  of  exchange 
for  the  whole  of  the  fund  or  debt,  makes  an  equitable 
assignment  of  the  fund  or  debt,  not  only  against  the 
drawer,  but  also  as  against  the  drawee,  and  sui'h  is  the 
conclusion  of  many  of  the  courts.^  But  there  are  very 
manv  cases  to  the  contrary.     Some  of  them  rest  their  ob- 


'  "It  seems  to  be  equally  well  settled  that  a  draft  by  the  creditor  ou 
his  debtor  iu  the  form  of  a  bill  of  exchanj^e  for  the  amount  of  tiie  debt, 
or  the  Avhole  fuud  iu  his  hands,  is  a  good  and  valid  assignment  of  the 
debt  or  fund."  Dewey,  J.,  iu  Gibsou  v.  Cooke,  20  Pick.  15.  *•  If  the 
drawee  refuse  to  accept  and  pay  the  bill,  the  right  of  the  holder  to  the 
debt  once  assigned  to  him  is  uot  thereby  impaired;  although  he  may 
not  be  entitled  to  recover  the  same  iu  his  own  name,  for  the  want  of  a 
promise  to  pay.  But  he  may  sue  the  drawer,  or  the  drawee  iu  the  uame 
of  the  drawer,  for  the  debt  originally  due,  in  consequence  of  the  implied 
contract  of  the  assignor  of  a  chose  in  action  that  the  debtor  shall  i)ay, 
and  on  failure,  that  the  assignor  will.  The  bill  being  retained  after 
protest,  by  the  assignee,  is  evidence  that  the  amount  has  uot  been  paid 
by  the  drawer  or  by  any  of  the  indorsers.  I  see  no  possible  mischief 
which  cau  result  from  this  doctrine.  For  if  after  payment  refused  and 
protest  made,  the  drawee  should  pay  over  the  funds  in  his  hands  to  the 
drawer  or  to  his  order,  without  notice  from  the  first  assignee,  that  he 
should  retain  the  bill,  and  look  to  him  for  the  amount,  so  far  as  he  was 
bound  to  pay;  this  would  be  a  good  defense  against  a  suit  brought  in 
the  uame  of  the  drawer."  Washington,  J.,  in  Corser  v.  Craig,  1  Wash. 
C.  C.  426,  in  which  suit  was  brought  against  the  drawee  by  the  payee 
and  drawer,  for  the  benefit  of  the  indorsee.  In  Wheatley  v.  Strobe,  12 
Cal.  97,  the  right  of  the  holder  of  a  bill  to  the  fund,  against  which  the 
bill  was  drawn,  was  asserted  and  recognized  as  against  the  attaching 
creditors  of  the  drawer.  Field,  J.,  said:  "The  want  of  a  written  ac- 
ceptance does  uot  affect  the  right  of  Howell  (the  holder)  to  the  money 
due,  but  only  the  mode  of  enforcing  it.  With  the  acceptance  he  could 
have  sustained  an  action  upon  the  order;  withoutithemustrecover  upon 
the  original  demand  by  force  of  the  assignment.  Under  the  old  common- 
law  practice,  the  action  could  only  be  maintained  in  the  name  of  the 
assignor  for  the  benefit  of|the  assignee,  but  under  our  system  it  may  be 
brought  in  the  name  of  the  assignee  as  the  party  beneficially  interested. 
Courts  of  law,  equally  with  courts  of  equity  gave  effect  to  assignments 
like  the  one  under  consideration,  by  controlling  the  proceeds  of  the 
judgments  recovered  for  the  benefit  of  the  assignee."  See  also  Roberts 
r.  Austin,  2G  Iowa,  315;  Robins  r.  Bacon,  3  Greenleaf,  345);  Kahnweiler 
V.  Anderson,  78  N.  C.  137. 
14 


CH.  I.]    ORIGIN  AND  FUNCTIONS  OF  COMMERCIAL  PAPER.     §   5b 

jcctlon  to  the  theory  on  the  ground  that  the  bill  of  exchange 
docs  not  necessarily  contemplate  the  assignment  of  the 
drawer's  claim  against  the  drawee,  although  the  accei)tance 
and  payment  of  the  bill  by  the  drawee  will  extinguish  his 
indebtedness  to  the  drawer. ^  But  it  is  conceded  that  a  bill 
of  exchange  may  be  received  as  evidence  of  an  intention  to 
make  an  assignment,  and  it  will  be  permitted  to  operate  as 
SAich,  if  the  intention  is  clearly  proven.^  It  has  even  been 
said  that  "  a  proper  bill  of  exchange  does  not  of  itself 
operate  as  an  assignment  to  the  payee  of  funds  of  the 
drawer,  in  the  hands  of  the  drawee,  and  even  after  an  un- 
conditional acceptance,  it  cannot  in  strictness  be  held  to 
have  that  effect,  since  the  drawee  becomes  bound  by  reason 
of  the  contract  of  acceptance,  irrespective  of  the  funds  on 
his  hands." ^  But  the  courts,  and  law  writers  generally, 
maintain  that  the  bill  of  exchange  does  operate  as  an  ,assign- 
ment  of  the  fund,  as  soon  as  it  is  accepted  by  the  drawee.* 
There  is  some  historical  authority  for  the  position  that 
the  parties  to    the    bill    of   exchange  do  not  contemplate 

1  "  It  is  entirely  new  to  me  to  hear  that  a  bill  of  exchange  in  an 
ordinary  mercantile  transaction  in  the  shape  in  which  this  appears  can 
amount  to  an  equitable  assignment  of  the  debt.  The  note  might  have 
been  indorsed  to  any  individual,  or  to  any  number  of  people,  who  might 
have  indorsed  it  in  succession.  A  mercantile  instrument  it  is  in  its 
original,  and  in  that  shape  it  remains,  and  has  no  other  validity  or 
effect;  and  to  call  it  an  assignment  of  a  debt  would  be  to  call  it  not  by 
its  right  name-."  Bacon,  V.  C,  in  Shand  v.  DeBuisson,  L.  R.  18  Eq.  283. 
See,  to  the  same  effect,  Bank  of  Commerce  v.  Bogy.  44  Mo.  17;  First 
N.  B.  V.  Dubuque,  S.  E.  R.  Co.,  52  Iowa,  378  (35  Am.  Rep.  281) ;  Harrison 
V.  Williamson,  2  Edw.  Ch.  438. 

2  First  Nat.  Bk.  v.  Dubuque,  S.  R.  R.,  52  Iowa,  378  (35  Am.  Rep. 
281)  ;  Bank  of  Commerce  v.  Bogy,  44  Mo.  17. 

^  Hurlbut,  J.,  in  Cowperthwaite  v.  Sheffield,  3  Comst.  243.  See  also 
Marine  &  Fire  Ins.  Bk.  v.  Jauncey,  3  Sandf.  258;  Wheeler  v.  Stone,  4 
Gill,  47. 

*  Mandeville  v.  Welch,  5  Wheat.  277;  Harris  v.  Clark.  3  Const.  243; 
Buckuer  v.  Sayre,  17  B.  Mon.  754;  First  Nat.  Bk.  v.  Dubuque,  S.  R.  R., 
52  Iowa,  378  (35  Am.  Rep.  281)  ;  Lambert  v.  Jones,  2  Patton  &  H.  144; 
2  Parsons'  N.  &  B.  330,  381 ;    Story  on  Bills,  §  13.      ' 

15 


§   i)h     OKIUI.N  AND  FUNCTIONS  OF  COMMERCIAL  FAPEK.     [cil.  I. 

an  asssignment  of  the  fund  or  debt,  against  which  the  bill  is 
drawn,  in  the  fact  that  for  many  years,  after  the  legal 
recognition  of  bills  of  exchange,  assignments  of  choses  in 
action  were  illegal  in  equity,  as  well  as  in  law.  There  can 
be  no  dou})t  that  at  that  time  the  bill  must  have  been  con- 
sidered inchoate,  until  it  was  accei)ted,  and  when  accepted 
it  partook  of  the  character  of  a  novation.  The  drawee  was 
released  pro  tanlo  of  his  indebtedness  to  the  drawer  upon 
his  acceptance  of  the  bill,  which  obligated  him  to  pay  a 
like  sura  to  the  holder  of  the  bill.  In  some  respects,  an 
accepted  bill  of  exchange  is  a  novation,  a  mercantile  trans- 
action that  was  ancient,  Avhen  bills  of  exchange  first  came 
into  use.  The  new  and  necessary  additional  character- 
istics of  the  bill  were  its  assignability  and  negotiability. 
In  all  innovations  upon  existent  rules  of  law  the  conserva- 
tism of  jurisprudence  compels  a  conformity  of  the  new 
rule  to  the  established  rules  as  nearly  as  this  is  possible. 
It  is  therefore  unreasonable  to  claim  that  originally  bills  of 
exchange  could  have  been  looked  upon  as  equitable  assign- 
ments of  the  fund  or  debt,  against  which  they  were  drawn. 
And  it  is,  without  doubt,  the  influence  of  the  common-law 
rule  ajrainst  the  assignment  of  choses  in  action,  which  more 
than  anything  else  militates  against  the  present  ap])lication 
of  the  theory  of  assignment  to  accepted  bills  of  exchange 
drawn  for  the  whole  of  the  fund  or  debt,  although  that  rule 
has  been  very  generally  repealed  by  statute  or  nullified  by 
the  rules  of  equity.^  But  this  historical  reason  does  not 
furnish  any  substantial  objection  to  the  theory  at  the  pres- 

2  In  .lohnson  v.  Collins,  1  East,  104,  -which  was  an  action  brought  by 
the  indorsee  of  a  bill  of  exchan<ie  drawn  on  the  promise  of  a  del)tor  to 
accept  it,  Kenyon,  J.,  said:  "  If  we  were  to  suffer  the  plaintiff  to  recover 
un  the  general  counts,  we  must  say  that  a  chose  in  action  is  assignable, 
a  doctrine  to  which  I  never  Avill  subscribe."  In  the  same  case,  Grose, 
J.,  said  that  "  to  permit  the  plaintiff  to  recover  would  virtually  be  mak- 
ing all  choses  in  action  assignable." 


en.  1.]    ORIGIN  AND  FUNCTIONS  OF  COMMEKCIAL  PAPKK.      §    DC 

ent  time.  Since  the  common-law  mile  which  constituted 
the  obstacle  to  its  adoption  has  been  abrogated,  the  manifest 
value  of  the  theory,  in  protecting  the  just  rights  of  the 
payee  or  holder  of  the  bill,  is  a  sufficient  justification  of  its 
adoption  by  the  courts. 

§   5c.    Bill    of    exchange  not    drawn    on  a  particular 

fund.  —  A  still  further  objection  to  the  theory  that  a  bill  of 
exchange  operates  as  an  equitable  assignment  j^ro  tort  to  of 
the  fund,  lies  in  the  statement  that  an  assignment,  to  be 
valid,  must  relate  to  a  specific  debt  or  thing  in  action  ;  and 
that  since  the  bill  of  exchange  is  not  drawn  on  a  particular 
or  specific  fund  it  cannot  have  the  effect  of  an  assignment.^ 
It  is  very  generally  conceded  by  the  courts  that  an  order 
for  an  entire  debt  or  fund,  in  which  the  debt  or  fund 
is  specified  or  named,  operates  as  an  equitable  assign- 
ment thereof,  and  binds  the  drawee  as  soon  as  he  has  re- 
ceived notice.-  And  in  order  that  such  an  order  may 
operate  as  an  assignment,  it  is  not  necessary  that  the 
debt  or  fund  should  be  in  existence,  or  matured,  when  the 
order  was  given. ^  The  only  difference,  in  form  or  in  effect, 
between  bills  of  exchange  and  these  orders,  which  have 
been  judicially  declared  to  be  equitable  assignments,  is  the 

1  In  Lloyd  et  al.  v.  McCaffrey,  4(j  Pa.  St.  410,  Justice  Strong  said: 
"It  cannot  be  maintained  that  Taylor's  check,  without  more,  amounted 
to  an  equitable  appropriation  of  the  funds  in  the  hands  of  the  banker  to 
whom  it  was  addressed.  To  make  an  order  or  draft  an  equitable  assign- 
ment it  must  designate  the  fund  upon  which  it  is  drawn."  See,  to  the 
same  effect,  Phillips  v.  Stagg,  2  Edw.  Ch.  108;  Harrison  v.  Williamson, 
2  Edw.  Ch.  430;  Chapman  v.  White,  6  N.  Y.  412. 

2  Row  V.  Dawson,  1  Ves.  331;  Lett  v.  Morris,  4  Sim.  607;  Ex  parte 
South,  3  Swanston,  391;  Yeates  v.  Groves,  1  Ves.  Jr.  281;  Christmas  v. 
Russell,  14  Wall.  84;  Brill  v.  Tattle,  81  N.  Y.  457;  Ehrichs  u.  De  Mill,  75 
N.  Y.  370;  Parker  v.  Syracuse,  31  N.  Y.  37G;  Lowery  v.  Steward,  25  N. 
Y.  241. 

3  Rowu.  Dawson,  1  Ves.  331;  Peyton  v.  Hallett,  I  Caines,  363;  Cutts 
V.  Perkins,  12  Mass.  206;  Brill  v.  Tuttle,  81  N.  Y.  547;  Brooks  v.  Hatch, 
6  Leigh,  534. 

2  17 


§   5c     ORIGIN  AND  FUNCTIONS  OF  COMiMEKCIAL  PAPER.     [CH.  I. 

fact  that  the  latter  are  drawn  against  a  particular  or  spe- 
cific fund.  But  this  does  not  appear  to  be  a  valid  objection 
to  the  application  of  the  theory  of  assignment  to  bills  (^f 
exchange,  at  least  in  equity.  In  equity  an  assignment  will 
be  valid  whenever  the  thing  assigned  is  capable  of  identifi- 
cation ;  it  matters  not  whether  it  be  in  existence  at  the  time 
of  assignment,  or  is  only  a  future  possibility  or  expectancy. 
*'  To  make  an  assignment  valid  at  law,  the  thing  which  is 
the  subject  of  it  must  have  actual  or  potential  existence  at 
the  time  of  the  grant  or  assignment.  But  courts  of  equity 
will  support  assignments,  not  only  of  clioses  in  action,  and 
of  contingent  interests  and  expectancies,  but  also  of  things 
which  have  no  actual  or  potential  existence  and  rest  in 
mere  possibility  ;  not,  indeed-  as  a  present  positive  trans- 
fer, operative  in  prcesenti,  for  that  can  only  be  of  a  thing 
in  esse,  but  as  a  present  contract  to  take  eifect  and  attach 
as  soon  as  a  thing  comes  in  esse."  ^  The  uncertainty  of  the 
fund  or  debt  would,  therefore,  be  no  ground  of  objection 
to  the  consideration  of  a  bill  of  exchange  as  an  equitable 
assignment,  if  the  parties  intended  it  to  have  that  effect. 
The  fact  that  it  is  drawn  against  a  particular  debtor,  would 
seem  to  be  a  suflScient  particularization  of  the  fund  or  debt, 
in  order  to  work  an  equitable  assignment.  In  one  of  the 
cases  ^  an  order,  payable  "out  of  the  first  money  which 
should  be  due  him  (the  drawer)  for  salt  delivered  or  to 
be  delivered,  to  them  (the  drawees),"  was  held  to  operate 
as  an  equitable  assignment  p7'o  tanto.  If  this  case  is  sus- 
tainable, and  it  is  in  the  direct  line  of  the  authorities  already 
cited,^  it  is  diflScult  to  see  why  an  order  would  not  operate 
as  an  equitable  assignment,  which  was  "  payable  out  of  the 
first  money  due  the  drawer  by  the  drawee ;  and  this  is  the 
practical,  as  well  as  legal,  effect  of  all  bills  of  exchange. 

1  Story's  Eq.  Jur.,  §  1040. 

*  Brooks  V.  Hatch,  6  Leigh,  534;  See  Harvin  v.  Galluchat,  28  S.  C.  211. 

*  See  ante,  p.  12,  note  2,  and  p.  13  n.  1. 

18  " 


CH.  I.]    ORIGIN  AND  FUNCTIONS  OF  COMMERCIAL  PAPER.       §    «) 

The  general  description  of  credits  in  assignments  for  the 
benefit  of  creditors  never  invalidates  the  assignment,  or  af- 
fects the  assignee's  ri^ht  to  them.  But  since  the  bill  of 
exchange  is  at  best  only  an  equitable  assignment,  and  the 
thing  assigned  being  identified  simply  as  the  indebtedness  of 
the  drawee  to  the  drawer,  it  can  only  be  treated  as  an  ef- 
fective assignment,  while  the  means  of  identification  are  at 
hand.  Should  the  fund  or  debt  be  innocently  {i.e.,  as  to 
the  drawee)  paid  over  to  the  drawer  or  his  assigns,  it  loses 
its  identity,  —  unless  the  identical  money  can  be  traced  and 
discovered  in  the  hands  of  the  drawer  or  of  his  assignee,— 
and  the  bill  may  thus  be  deprived  of  its  value  as  an  assign- 
ment.^ 

§  6.  Promissory  note,  what  is.  —A  promissory  note 
is  an  unconditional  promise  to  pay  to  another's  order  or 
to  bearer  a  specified  sum  of  money  at  a  specified  time. 
The  person  who  executes  the  note  is  called  the  maker,  and 
he  to  whom  it  is  made  payable  is  called  the  payee.  It  is 
not  known  positively  when  promissory  notes,  as  commer- 
cial or  negotiable  paper,  were  first  recognized  by  the 
courts.  It  cannot  be  doubted  that  as  ordinary  obligations 
to  pay  money  they  must  have  been  used  generally  in  all 
ages  and  in  all  parts  of  the  world  where  commerce  thrived 
at  all.  But  it  is  quite  certain  that  they  did  not  possess  the 
quality  of  negotiability,  until  foreign  bills  of  exchange  had 
been  for  some  time  in  use  and  had  acquired  their  negotia- 
ble character.^  But  when  inland  bills  of  exchange  were 
introduced  into  commerce,  promissory  notes,  with  the 
claim  for  them  of  negotiability,  also  appeared,  and  in 
many  of  the  cases  of  that  period  they   were  confounded 

1  See  Row  v.  Dawson,  1  Ves.  Sr.  331 ;  Cowperthwaite  v.  Sheffield,  3 

Comst.  243. 

2  1   Parsons'  N.  &  B.  11;  Story  on   Notes,  §  6;  1  Daniel  on  Negot. 

last.  6. 

19 


\ 


§    »)       OKIGIN  AND  FUNCTIONS  OF  COMMERCIAL  I'AI'Klt.     [ciI.  I. 

with  inland  bills,  the  courts,  as  well  as  the  merchants,  fail- 
in^;;  to  distinguish  between  theni.^  In  all  of  the  early  cases 
the  question  appears  not  to  have  been  whether  a  promis- 
sory note  was  of  itself  negotiable,  but  whether  it  partook 
of  the  character  of  a  bill  of  exchange,  sutiicient  to  support 
a  declaration  upon  the  custom  of  merchants  in  respect  to 
bills  of  exchange.  In  BuUer  v.  Crips,^  the  action  was  upon 
a  promissory  note  by  the  indorsee  against  the  maker,  and 
the  plaintiff  declared  upon  the  custom  of  merchants,  as 
upon  a  bill  of  exchange.  On  a  motion  in  arrest  of  judg- 
ment, Lord  Holt  declared  promissory  notes  to  be  different 
from  bills  of  exchange,  and  was  therefore  not  negotiable. 
He  said:  '*  The  notes  in  question  are  only  an  invention  of 
the  Goldsmiths  in  Lombard  street,  who  had  a  mind  to  make 
a  law  to  bind  all  those  that  did  deal  with  them ;  and  sure 
to  allow  such  a  note  to  carry  any  lien  with  it  were  to  turn 
a  piece  of  paper,  which  is  in  law  but  evidence  of  a  parol 
contract,  into  a  specialty;  and  besides,  it  would  empower 
one  to  assign  that  to  another  which  he  could  not  have  him- 
self;  for  since  he  to  whom  this  note  was  made  could  not 
have  this  action,  how  can  his  assignee  have  it?  And  these 
'  notes  are  not  in  the  nature  of  bills  of  exchange,  for  the 
reason  of  the  custom  of  bills  of  exchange  is  for  the  expe- 
dition of  trade  and  its  safety;  and  likewise  it  hinders  th(^ 
exportation  of  money  out  of  the  realm."  '     This  discussioB 

1  In  Grant  v.  Vaughau,  3  Burr.  1525,  Lord  Mansflekl  said:  "Upon 
looking  into  the  reports  of  the  cases  on  this  head  in  the  times  of  King 
William  III.  and  Queen  Anne,  it  is  difficult  to  discover  by  them  when 
the  question  arises  upon  a  bill,  and  when  upon  a  note;  for  the  reporters 
do  not  express  themselves  with  sufficient  precision,  but  use  the  word 
'note'  and  'bill'  promiscuously."  See  also  Gierke  v.  Martin,  2  Ld. 
Rayra.  757. 

2  6  Mod.  29. 

3  In  another  case,  Gierke  v.  Martin,  2  Ld.  Rayra.  757;  1  Salk.  129,  3G3, 
Lord  Holt  said,  "that  the  maintaiuing  of  these  actions  upon  such  notes 
were  innovations  upon  the  rules  of  the  common  law,  and  that  it 
amounted   to  the  setting  up  a  new  sort  of  specialty  unknown  to  the 

20 


CH.  I.]    ORIGIiX  AND  FUNCTIOXS  OF  COMMERCIAL  PAPER.       §    6 

was  finally  set  at  rest  by  the  enactment  of  the  statutes  3 
and  4  Anne,  chapter  9,  and  7  Anne,  chapter  25,  which  pro- 
vided that  promissory  notes  shall  be  negotia])le  in  the 
same  manner  as  inland  bills  of  exchange. ^  Similar  statutes 
have  been  enacted  in  all  of  the  States  of  the  Union,  so 
that  it  is  not  likely  to  be  a  very  important  question, 
whether  promissory  notes  were  negotiable  before  the 
statute  of  Anne,  or  are  negotiable  independently  of  that  or  a 
similar  statute.  But  where  the  statute  prescribes  different 
criteria  for  the  determination  of  what  are  negotiable  notes 
from  what  are  prescribed  by  the  statute  of  Anne,  and  the 
maker  of  the  note  has  not  conformed  to  the  statutory 
requirements,  it  becomes  exceedingly  important  to  know 

common  law,  and  invented  in  Lombard  Street,  which  attempted  in  these 
matters  of  bills  of  exchange  to  give  laws  to  Westminster  Hall."  That 
the  continuing  to  declare  upon  th^se  notes  upon  the  custom  of  mer- 
cliants  proceeded  from  obstinacy  and  opinionativeness,  since  he  had 
always  expressed  his  opinion  against  them,  and  since  there  was  so  easy 
.i  method,  as  to  declare  upon  a  general  indebitatus  assuynpsit  for  money 
vent,  etc. 

1  The  statute  3  and  i  Anne,  ch.  9,  provides,  "  that  all  notes  in  writing 
that  shall  be  made  and  signed  by  any  person,  etc.,  whereby  such  per- 
Bon,  etc.,  shall  promise  to  pay  to  any  other  person,  his,  her,  or  their 
order,  or  unto  bearer,  any  sum  of  money  mentioned  in  any  such  note, 
shall  be  taken  and  construed  to  be,  by  virtue  thereof,  due  and  payable 
to  any  such  person,  etc.,  to  whom  the  same  is  made  payable;  and  also 
every  such  note  payable  to  any  person,  etc.,  his,  her,  or  their  order,  shall 
be  assignable  or  indorsable  over,  in  the  same  manner  as  inland  bills  of 
exchange  are  or  maybe,  according  to  the  custom  of  merchants;  and 
that  the  persons,  etc,  to  whom  such  sum  of  money  is  or  shall  be  by  such 
note  made  payable,  shall  and  may  maintain  an  action  for  the  same,  in 
such  manner  as  he,  she,  or  they,  might  do  upon  any  inland  bill  of  ex- 
change, made  or  drawn  according  to  the  custom  of  merchants,  against 
the  person,  etc.,  who  signed  the  same;  and  that  any  person,  etc.,  to 
whom  such  note  that  is  made  payable  to  any  person,  etc.,  his,  her,  or 
their  order,  is  indorsed  or  assigned,  or  the  money  therein  mentioned 
ordered  to  be  paid  by  indorsement  thereon,  shall  and  may  maintain  his, 
her,  or  their  action  for  such  sum  of  money,  either  against  the  person, 
etc.,  who  signed  the  note,  or  against  any  of  the  persons  that  indorsed 
the  same,  in  like  manner  as  in  cases  of  inland  bills  of  exchange." 

21 


§     7       ORIGIN  AND  FUNCTIONS  OF  COMMERCIAL  PAPER.     [CH.  I. 

whether  promissory  notes  are  negotiable  independently  of 
any  statute.  It  seems  to  be  the  better  o})inion  that  prom- 
issory notes  were  by  customary  law  made  negotiable,  like 
inland  biUs  of  exchange,  before  the  enactment  of  the 
statute  of  Anne,  and  that  the  statute  was  designed  to  de- 
clare what  was  understood  to  be  the  existing  law,  and  to 
correct  the  error  on  this  point  brought  about  by  Lord 
Holt's  persistent  opposition  to  the  recognition  of  promis- 
sory notes  as  negotiable  pa))er.^  But  on  the  other  hand,  it 
has  been  held  that  notes  were  not  negotiable,  until  made 
so  by  the  statute  of  Anne.^ 

§  7.  Transfer  by  indorsement.  —  When  a  bill  or  note  is 
made  payable  to  one  or  his  order,  as  a  consequence  of  the 
recognized  negotiability  of  such  bill  or  note,  it  has  become 
the  rule,  notwithstanding  the  general  prohibition  of  the 
assisrnment  of  choses  in  action,  that  all  the  rijjhts  of  the 
payee  in  the  bill  or  note  may  be  transferred  to  another  by 
an  indorsement  of  it  to  him.  Indorsement  is  a  word  com- 
pounded of  the  Latin  words,  in  doi'sa,  meaning  on  the 
back ;  and  indorsement  consists  of  a  writing  on  the  back  of 
the  bill  or  note,  directing  the  payment  of  the  bill  or  note 
to  another.  The  payee  or  transferer  of  the  bill  or  note  is 
called  the  indorser,  and  the  transferee  is  called  the  in- 
dorsee. It  has  also  become  a  rule  of  the  law  merchant  that 
each  successive  indorser  guarantees  to  the  subsequent  in- 
dorsees the  payment  of  the  bill  or  note  by  the  maker  or 
drawee.     This  general  statement  of  the  subject  of  indorse- 

•  "  These  notes  were,  at  the  time  the  statute  was  made,  uegotiable  by 
the  law  merchant  of  England,  which  was  and  is  as  much  as  part  of  the 
law  of  England  as  —  to  use  the  strong  language  of  Christian  —  the  laws 
relating  to  marriage  or  murder."  *!  Parsons'  N.  &  B.  13.  See,  to  the 
same  effect,  Edwardson  Bills,  51,  52;  Irwin  v.  Maury,  1  Mo.  194;  Dunn 
V.  Adams,  1  Ala.  527. 

2  Eaton  V.  Lennox,  5  Rand.  31;   Davis  v.  Miller,  14  Gratt.  18;   Morton 
t>.  Kose,  2  Wash.  (Va.)  233. 
•7>> 


CH.  I.]    ORIGIN  AND  FUNCTIONS  OF  COMMERCIAL  PAPER.       §    <S 

ment  is  introduced  here  for  the  purpose  of  explaining 
terms,  and  the  subject  of  indorsement  will  receive  an  ex- 
haustive treatment  elsewhere.^ 

§  8.  Construction  of  ambiguous  instruments.  —  If  the 
form  and  language  of  a  paper  be  so  ambiguous,  that  it  is 
impossible  to  ascertain  whether  it  was  intended  to  be  a  bill 
of  exchange,  or  promissory  note,  the  holder  is  permitted 
to  treat  it  as  either  a  bill  or  note.^  The  courts  will  pre- 
sume that  the  instrument  was  drawn  in  that  ambiguous 
form,  in  order  that  it  may  be  sued  on  in  either  character.-^ 
In  one  of  the  cases  cited,*  the  paper  was  in  this  form:  — 

"  £44,  lis.  5d.  London,  5th  August,  1833. 

"  Three  months  after  date,  I  promise  to  pay  Mr.  John 
Bury,  or  order,  forty-four  pounds,  eleven  shillings  and  five 
pence.     Value  received. 

"J.  B.  Grutherot.  "John  Bury. 

"  35  Montague  PL,  Bedford  Place." 

Grutherot' s  name  was  written  across  the  face  as  an  ac- 
ceptance, and  Bury's  name  on  the  back  as  an  indorsement. 
It  was  held  that  it  could  be  sued  on  either  as  a  bill  or  as  a 
note.'      The  same  conclusion  has  been  reached    in  other 

'  See  post,  chapter  on  Transfer  by  Indorsement. 

2  "  Equivocal  instruments  of  this  kind,  possessing  the  character  both 
of  promissory  notes  and  bills  of  exchange,  maybe  treated  as  either." 
Crompton,  J.,  in  Lloyd  v.  Oliver,  18  Q.  B.  (83  E.  C.  L.  R.)  471.  See,  to 
tlie  same  effect,  Edis  v.  Bury,  6  Barn.  &  Cres.  (13  E.  C.  L.  R.)  433;  Block 
V.  Bell,  1  M.  &  R.  149;  Brazelton  v.  McMurray,  44  Ala.  323. 

3  "  It  is  not  unjust  to  presume  that  it  was  drawn  in  this  form,  for  the 
purpose  of  suing  upon  it  either  as  a  promissory  note  or  as  a  bill  of  ex- 
change."   Erie,  J.,  in  Lloyd  v.  Oliver,  18  Q.  B.  (83  E,  C.  L.  R.)  471. 

4  Edis  V.  Bury,  6  Barn.  &  Cres.  (13  E.  C.  L.  R.)  433. 

5  "  Until  Grutherot  put  his  name  to  this  instrument  it  was  clearly  in 
terms  a  promissory  note,  and  having  been  once  such,  the  fact  of  his 
having  afterward  put  his  name  to  it  as  acceptor,  cannot  alter  the  nature 
of  it."     Holroyd,  J.,  in  Edis  v.  Bury,  supra. 

23 


§    8       ORIGIN'  AND  FUNCTIONS  OF  COMMERCIAL  PAPER,     [til.  I. 

cases,  where  the  body  of  the  paper  was  in  the  form  of  a 
promissory  note,  and  yet  there  was  ai)peii(led  an  ad(hess  to 
a  supposed  drawee,  and  an  acceptance  b}'  him.^  But  wliere 
the  instrument  is  in  every  other  respect  of  the  form  of  a 
bill  of  exchange,  except  thatnu  the  address  of  the  drawee 
"at"  is  used  instead  of  "to,"  for  example,  "at  John 
Smith  &  Co.,"  it  is  held  that  the  variance  from  the  com- 
mon form  is  not  sufficient  to  constitute  an  ambiguity;  and, 
hence,  such  instrument  must  be  sued  on  as  a  bill  of  ex- 
change. ^ 

»  Block  t>.  Bell,  1  M.  &  R.  149;  Lloyd  v.  Oliver,  IS  Q.  B.  (83  E.  C.  L. 
R.)  471. 

2  Shuttleworth  v.  Stevens,  1  Camp.  407;  Allan  v.  Mawsou,  4  Camp. 
115;  Rex  V.  Hunter,  Rues.  &  Ry.  C.  C.  611;  1  Daniel  Negot.  Inst.,  §  133. 
24 


CHAPTER    II. 

THE    REQUISITES    AND    COMPONENT    PARTS    OF    BILLS    AND 

NOTES. 

Section  10.  The  date. 

11.  Antedating  and  post-dating. 

12.  Name  of  drawer  and  maker. 

12a.  Tlie  form  and  place  of  signature. 

13.  Joint  and  several  notes. 

14.  Two  or  more  drawers. 

15.  Name  of  tlie  drawee. 

16.  Address  to  drawees  in  the  alternative. 

17.  Designation  of  the  payee. 

18.  Joint  and  alternative  payees. 

19.  Fictitious  or  non-existing  parties  —  adopted  names. 

20.  Same  person  as  different  parties. 

21.  Words  of  negotiability. 

22.  Note  made  negotiable  at  particular  bank. 

23.  A  distinct  obligation  to  pay. 

24.  Time  of  payment. 

25.  Payment  must  be  unconditional. 
25a.  Payment  on  or  before  a  certain  date. 
256.  Payment  when  convenient  or  possible. 
25c.  Payment  on  return  of  note. 

25d.  Payment  in  default  of  installment. 

26.  Payment  out  of  a  particular  fund. 

27.  Words  of  advice. 

28.  Certainty  as  to  amount  to  be  paid. 
28a.  Payable  with  exchange. . 

286.  Stipulations  to  pay  costs  for  collection. 

29.  Payment  in  money  only. 

29a.  Payable  in  bank  bills  or  currency. 
296.  Payable  in  foreign  money. 
29c.  Payable  in  money  of  Confederate  States. 
29d.  Denomination  stated  in  body  of  paper. 
29e.  Collateral  obligations. 

30.  Place  of  payment. 

31.  Acknowledgment  of  consideration. 

32.  .Sealed  instruments  not  commercial  paper. 

33.  Attestation  by  witness. 

25 


§    10  REQUISITES    OF    BILLS    AND    NOTES.  [CH.   II, 

Section  34.  Delivery. 

34rt.  Delivery  to  •whom, 

346.  Time  of  delivery. 

34c.  Delivery  on  Sunday. 

34d.  Delivery  as  an  escrow. 

3.5,  Bills  and  notes  executed  in  blank. 

§  10.  The  date,  —  It  has  been  very  generally  held  that 
the  date  is  not  essential  to  the  validity  of  a  bill  or  note.^ 
But  while  it  may  not  be  essential  to  a  bill  or  note,  which  is 
made  payable  at  sight,  on  demand  or  on  a  certain  day,  it 
would  seem  to  be  indispensable  in  a  note  or  bill,  payable 
at  a  certain  time  after  date,  for  it  would  otherwise  be  im- 
possible to  tell  from  the  face  of  the  paper,  whenthe  money 
w^as  due  and  payable,'^  But  it  seems  to  be  considered 
non-essential,  even  in  this  case,  and  if  the  date  is  not 
given,  the  time  wull  be  computed  from  the  day  of  issue. ^ 
Parol  evidence  is  admissible  to  show  from  what  time  an 
undated  paper  is  intended  to  operate.*  If  the  day 
of  delivery  is  not  known,  or  cannot  be  proven,  the  time 
may  be  computed  from  the  earliest  day  on  which  it  is 
proven  to  have  been  in  the  hands  of  the  payee  or  any  sub- 
sequent holder.^     It  is  also  admissible  to  show  a  mistake  in 

'  Michigan  Ins.  Co.  v.  Leavenworth,  30  Vt.  11;  Drake  v.  Rogers,  32 
Me.  524;  Mechanics',  etc.,  Bank  v.  Schuyler,  7  Cow.  337;  Cowing  v. 
Altmau,  71  N,  Y.  441;  Leant).  Lozardi,  27  Mich,  424;  Seldenridge  v. 
Couuable,  32  Ind.  375;  Richardson  v.  Ellett,  10  Texas,  190;  Wexel  v. 
Cameron,  31  Tex.  614;  De  la  Courtier  v.  Bellamy,  2  Show.  422;  Giles  v. 
Bourne,  6  Maule  &  S.  73;  Davis  v.  Jones,  17  C,  B.  (84  E.  C.  L.  R.) 
625;  s.  c,  25  L.  J.  C.  P.  91. 

2  See  1  Daniel's  Neg.  Inst,,  p.  93, 

3  1  Parsons'  N.  &  B,  5.52;  De  la  Courtier  v.  Bellamy,  2  Show.  422; 
Giles  V.  Bourne,  6  Maule  &  S.  75;  Cowing  v.  Airman,  71  N,  Y.  441;  Sel- 
denridge V.  Connable,  32  Ind.  375. 

■•  Davis  V.  Jones,  17  C,  B.  (84  E,  C.  L.  R.)  625;  s.  c.  25  L.  J.  C.  P. 
91;  Cowing  v.  Altman,  71  N.  Y.441;  Richardson  v.  Ellett,  10  Texas,  190; 
Lean  v.  Lozardi,  27  Mich.  ^24. 

5  Richardson  v.  Lincoln,  5  Met.  201;  Woodford  v.  Dorwin,  3  Vt.  82; 
Clark  V.  Sigourney,  17  Conn,  511. 

26 


CH.  II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.  §     11 

the  date,  although  i)roof  of  the  mistake  cuts  off  a  defense  of 
the  maker ;  ^  but  a  different  date  could  not  be  proven  by 
parol  evidence  against  a  purchaser  for  value,  who  relied 
upon  the  given  date.^  For  the  purpose  of  protecting 
the  rights  of  all  parties,  a  mistaken  date  may  be  changed 
in  an  equitable  action  for  the  reformation  of  the  instru- 
ment.^ When  an  undated  note  or  bill  is  executed  and  de- 
livered to  the  payee,  the  presumption  of  law  is  that  he  is 
authorized  by  the  maker  to  fill  up  the  date,  and  the  maker 
will  be  bound  by  any  date  which  the  payee  inserts,  at  least 
to  an  innocent  indorsee  for  value*  But  he  is  not  per- 
mitted to  put  in  any  other  but  the  actual  date,  unless  ex- 
pressly authorized.  If,  therefore,  for  the  purpose  of  ac- 
celerating the  time  of  payment,  he  should  antedate  the 
paper,  it  will  be  void  in  the  hands  of  all  who  receive  it 
with  notice.^  The  date  is  usually  written  in  the  right-hand 
corner  of  the  bill  or  note,  at  the  top;  but  it  matters  not 
in  what  part  of  the  paper  it  appears." 

§  11.  Antedating  and  Post-dating.  —  Commercial  in- 
struments are  frequently  antedated  and  post-dated  for  the 
purpose  of  accelerating  or  postponing  the  payment,  and 
for  other  purposes.  And  it  is  not  considered  a  cause  for 
suspicion,  if  they  are  negotiated  before  the  day  of  the  date,^ 
not  even  if  the  indorser  should  die  before  the  day.     The 

1  Drake  u.  Rogers,  32  Me.  524;  Gertnania  Bauk  v.  Distler,  11  N.  Y. 
S.  C.  (4  Huu)  633. 

2  Huston  V.  Young,  33  Me.  85. 

3  Paysant  v.  Ware,  1  Ala.  160. 

••  Androscoggin  Bank  v.  Kimball,  10  Cush.  373;  Mechanics',  etc., 
Bank  v.  Schuyler,  7  Cow.  337. 

^  Goodman  v.  Simonds,  19  Mo.  1G6.  But  see  Mitchell  v.  Culver,  7 
Cow.  336. 

6  Shepherd  v.  Graves,  14  How.  505. 

'  Brewster  v.  McCardel,  8  Wend.  478;  Richter  v.  Selin,  8  Serg.  &  R. 
425;  McSparran  v.  Neely,  91  Pa.  St.  315;  Gray  v.  Wood,  2  Har.  &  J. 
328. 

27 


§     12  KEQLISITKS    OF    BILLS    AND    NOTES.  [ciI.   II. 

indorsee  would  iu  such  a  case  acquire  the  full  title  of  the 
iiidorser,  and  could  recover  of  the  maker  or  drawer.^  So 
immaterial  to  the  validity  of  a  note  or  bill  is  the  date,  that 
while  an  explanation  of  the  variance  would  be  required  in 
an  action  on  the  note  or  bill,  if  the  date  does  not  correspond 
with  the  declaration,*  it  will  not  be  a  material  variance,  if 
a  note  is  declared  to  have  been  made  on  a  certain  day,  dif- 
ferent from  the  date  of  the  paper. -^  .As  a  general  rule,  the 
rights  of  the  parties,  so  far  as  they  are  or  may  be  affected 
by  the  date,  are  determined  Avith  reference  to  the  actual 
date  the  bill  or  note  bears. ^  But  if  in  a  post-dated  or  ante- 
dated note  or  bill,  it  should  appear  from  the  date  to  have 
))een  executed  when  the  maker  was  incompetent  by  reason 
of  non-age,  insanity  or  coverture,  or  that  the  jiaper  was 
void  for  some  other  circumstance  connected  with  the  day  of 
the  date,  it  may  be  shown  in  behalf  of  any  of  the  parties, 
that  the  bill  or  note  was  actually  negotiated  at  a  time  when 
no  such  objection  to  its  validity  existed.'^  On  the  other 
hand,  if  the  note  or  bill  should  be  post-dated  or  antedated 
for  the  purpose  of  evading  the  rules  of  law  which  invalidated 
commercial  paper  made  on  the  day  of  execution  and  deliv- 
er}', proof  of  the  actual  day  of  delivery  will  make  the 
paper  void  in  the  hands  of  all  persons  who  take  it  with 
notice  or  without  consideration.^ 

§  12.  Xame  of  drawer  or  maker. — It  is  necessary  in 
all  legal  obligations  to  know  who  is  the  obligor,  and  par- 
ticularly in  all  kinds   of  commercial  paper,  since  the  cer- 

J  Pasmore  r.  North,  13  East,  517;  Brewster  v,  McCardel,  8  Wend. 
478. 

2  Fitch  V.  Joues,  5  Ellis  &  B.  238;   Fanshawe  v.  Peet,  2  II.  &  M.  1. 

3  Coxon  V.  Lyon,  2  Camp.  307;  Smith  v.  Lord,  2  Daw.  &  L.  759. 

*  Luce  r.  Shaff,  70  lud.  152. 

*  Pa.smore  v.  North,  13  East,  517;  Aldridge  v.    Branch  Bk.,  17  Ala.  45. 
6  Serle  v.  Norton,  8  M.  &  W.  30i>;  Bailey  v.  Taber,  5  Mass.  286;   Bank 

tj.  Mayberry,  48  Me.  198;   State  Bank  r.  Thompson,  42  N.  II.  3C9. 
28 


CH.   II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.  §     12 

tainty  of  parties  is  one  of  the  essentials  of  that  kind  of  legal 
instruments.  Without  a  maker,  there  can,  as  a  matter  of 
course,  be  no  note,  for  it  is  his  liability  alone  which  gives 
life  to  it.  The  name  must  appear  on  the  face  of  the  note 
in  such  fgrm  as  to  cause  no  uncertainty  as  to  the  person 
who  is  to  pay.  If,  therefore,  the  signature  should  be  in 
the  alternative,  as  where  the  signature  is,  "  A.  B.  or  else 
C.  D.,"  the  note  would  not  be  good  as  negotiable  paper  on 
account  of  the  uncertainty  and  variance  in  the  liability  of 
the  parties  to  it.i  But  it  would  seem  that  this  objection 
would  only  go  to  invalidate  the  note,  so  far  as  the  uncer- 
tain liability  of  C.  D.  If  the  liability  of  A.  B.  was  uncon- 
ditional, the  conditional  liability  of  C.  D.  might  be  treated 
as  irrelevant  surplusage.^ 

The  name  of  the  drawer  is  also  necessary  to  the  valid- 
ity of  a  bill  of  exchange;  for  if  it  does  not  appear 
upon  the  face  of  the  bill  who  the  drawer  is,  the  draw^ee 
will  not  be  in  a  position  to  determine  whether  he  should 
accept  it.^  No  doubt  can  arise  in  respect  to  the  inval- 
idity of  the  bill  which  does  not  contain  the  name  of 
the  drawer,  as  long  as  there  is  no  acceptance,  for  no  one 
has  then  signed  the  paper,  as  the  foundation  of  an  obliga- 
tion. But  it  becomes  an  interesting  question  what  effect  the 
acceptance  of  a  bill,  not  signed  by  any  drawer,  w^U 
have.  The  matter  has  been  much  debated,  but  the  con- 
clusion finally  reached  is,  that  the  acceptance  does  not 
give  it  any  validity,  unless  the  name  of  the  drawer  has 
been    aiithoritatively    written    in    it.'*       The    authority  to 

1  Ferris  v.  Bond,  i  Barn  &  Aid.  079.  lu  this  case,  the  court  said: 
"  This  is  not  a  promissory  note  against  tliis  defendant,  within  the  statute 
of  Anne.  It  operates  differently  as  to  the  two  parties.  It  is  the  abso- 
lute undertaking  on  the  part  of  Corner  to  pay,  and  it  is  conditional  only 
on  the  part  of  the  defendant,  who  undertakes  to  pay  only  in  the  event  of 
Corner's  not  paying." 

2  See  1  Daniel's  Negot.  Inst.  101;  Byles  on  Bills,  151  [*95]. 
2  1  Daniel's  Negot.  Inst.  101 ;  Story  on  Bills,  §  53. 

*  In  Levis  v.  Young,  1  Met.  (Ky.)  199,  the  action  was  against  the  ac- 

29 


§     12  KEQUISITKS    OF    lULLS    AND    NOTES.  [cil.   II. 

insert  the  name  of  the  drawer  would  irenerally  be  pre- 
sumed from  its  delivery;^  but  even  if  the  insertion  of 
his  name  should  be  made  w^ithout  authority,  the  acceptor 
would  nevertheless  be  bound  to  an  innocent  holder  for 
value. 2  The  only  purpose  for  requiring  the  name  of  the 
maker  or  drawer  to  appear  on  the  face  of  the  note  or  bill  is 
to  ascertain   his  identity  and   to  evidence  his  intention  to 

ceptor  aud  indorser  of  a  bill,  to  which  there  was  uo  signature  by  the 
drawer.  In  delivering  the  opinion  of  the  court,  Duval,  J.,  said:  "The 
fallacy  of  all  the  reasoning  of  counsel  upon  this  point,  consists  in  their 
failure  to  recognize  the  distinction  between  a  bill  of  exchange  and  the 
mere  form  of  such  an  instrument.  The  words  written  upon  the  face  of 
the  paper  in  question  are  utterly  inoperative,  and  without  force  or  legal 
effect  for  any  purpose  as  a  commercial  instrument,  without  the  name  of 
a  drawer,  either  subscribed  to  the  paper,  or  inserted  in  the  body  of  it. 
Whether  the  name  of  the  drawer,  or  of  any  subsequent  party  to  the  bill, 
be  forged  or  fictitious,  raalies  no  difference  as  it  respects  the  liability  of 
the  indorser.  The  indorsement  implies  an  undertaking  that  the  anteced- 
ent parties  are  competent  to  draw  and  accept  the  bill,  and  that  their 
signatures  are  genuine.  But  the  indorsement  does  not  imply  an  under- 
taking that  the. paper  indorsed  contains  the  names  of  all  the  antecedent 
parties  necessary  to  constitute  a  valid  bill  of  exchange,  when  the  face  of 
the  paper  itself  shows  that  it  is  blank  as  to  all  or  any  of  such  names. 
The  indorsement  of  the  paper  would,  doubtless,  confer  upon  the  party 
intrusted  with  it  the  authority  to  fill  up  tlie  blanks  with  the  names  of  any 
parties,  at  the  discretion  of  the  later;  and  so,  the  indorsement  of  ii  piece 
of  blank  paper  would  give  the  holder  authority  to  make  a  bill  of  exchange, 
upon  which  the  indorser  would  be  liable,  in  the  hands  of  an  innocent 
holder  for  value,  for  whatever  amount,  or  in  the  names  of  whatever  par- 
ties the  bill  might  be  subsequently  drawn  and  accepted.  But  certainly 
it  cannot  be  supposed  that  in  either  of  the  cases  stated,  the  indorser 
could  be  held  liable,  as  such,  until  the  paper  should  have  been  drawn 
and  executed  and  completed  as  a  bill  of  exchange.  It  is  not  the  mere 
authority  to  make  a  bill,  which  of  itself  creates  tlie  liability,  but  it  is  the 
execution  of  that  authority.  See  also  McCall  v.  Taylor,  10  C.  B.  (y.  s.) 
30  (34  L.  J.  3G5)  ;  Stoessiger  u.  S.  E.  R.  Co.,  3  El.  &  B.  549;  May  v.  Mil- 
ler, 27  Ala.  515. 

1  Harvey  v.  Cane,  34  L.  T.  R.  64 ;  Scard  v.  Jackson,  34  L.  T.  R.  65, 
note  a;  In  re  Duffy,  5  L.  R.  Ireland,  927;  Moes  v.  Knapp,  30  Ga.  942. 
See  post,  chapter  on  Rights  of  Bona  Fide  Holders. 

*  See  post,  chapter  on  Rights  of  Bona  Fide  Holders. 

30 


CH.   II.]       COMPONENT    TARTS    OF    BILLS    AND    NOTES.        §     12a 

execute  a  bill  or  note.  Bat  this  purpose  may  be  attained 
by  the  use  of  any  other  means  of  identification  than  the 
name.  Thus,  it  is  the  custom,  in  business  connected  with 
shipping,  to  incur  liabilities  in  the  name  of  the  ship  or  of 
the  owners  of  the  ship,  generally;  and  it  has  been  held  that 
a  note  signed  "steamboat  Ben  Lee  and  owners,"  was  prop- 
erly executed. 1  It  would  doubtless  be  proper  to  make  use 
of  this  general  description  of  the  maker  or  drawer  in  any 
kind  of  business,  which  is  conducted  under  a  trade  name  or 
mark,  sufficiently  definite  to  enable  an  easy  identification  of 
the  person  or  persons  intended.  And,  ordinarily,  it  does 
not  need  a  certificate  or  attestation  of  witnesses  to  make  the 
use  of  such  a  mark  a  valid  signature.  But  some  kind  of 
evidence  is  necessary  to  establish  the  intentional  adoption  of 
the  mark  as  a  signature,  and  any  peculiarity  may  be  pointed 
out  as  a  means  of  identification  of  the  mark  as  the  signa- 
ture of  a  particular  person. ^ 

§  12a.  The  form  and  place  of  signature. — But,  or- 
dinarily, names  are  used  for  the  identification  of  persons ; 
and  it  is  customary,  in  signing  commercial  paper,  for  the 
maker  or  drawer,  to  write  in  full,  at  least  his  surname,  al- 
though his  initials  have  been  held  to  be  a  sufficient  signature. ^ 
The  signature  may  be  written  in  ink  or  in  pencil,  the  only 
objection  to  the  signature  in  pencil  being  its  easy  oblitera- 
tion.* It  may  also  be  printed,  but  a  printed  signature  must 
be  proven  to  have  been  adopted  by  the  maker  or  drawer  as 

^  Sanders  v.  Anderson,  21  Mo.  402. 

2  George  v.  Surrey,  1  Moody  &  M.  516;  Willoughby  v.  Moulton,  47  N. 
H.  205;  Flint  v.  Flint,  6  Allen,  34;  Brown  v.  Butchers'  Bk.,  6  Hill,  443; 
Shank  v.  Butsch,  28  lud.  19;  Lyons  v.  Holmes,  11  S.  C.  429;  Hilbornu. 
Alford,  22  Cal.  482;  Flowers  v.  Billino;,  45  Ala.  488. 

3  Merchants' Bankr.  Spicer,  6  Wend.  443;  Palmer  u.  Stephens,  1  Denio 
471:  1  Parsons'  N.  &  B.  3G;  1  Daniel's  Negot.  Inst.  84. 

*  Geary  v.  Physic,  6  Barn.  &  C.  234;  Brown  v.  Butchers'  Bk.,  6  Hill, 
443;  Closson  v.  Stearns,  4  Vt.  11;  Eeed  v.  Eoark,  14  Tex.  329. 

31 


§    13  REQUISITES   OF   BILLS    AND    NOTES.  [CH.   II. 

his  signature.^  A  bill  or  note  may  be  signed  by  an  agent  of 
the  drawer  or  maker,  as  well  as  by  himself;  and  ordinarily 
it  does  not  require  any  written  authority  to  enable  him  to 
do  so. 2  The  signature  may  be  put  in  any  part  of  the  pa- 
per, at  the  top,  as  well  as  at  the  bottom,  on  the  back  as 
well  as  on  the  face.^  Thus  "  I.  J.  S.,  promise  to  pay  "  and 
>'  I.  J.  S.,  request  you  to  pay  "  have  been  held  to  be  good 
executions  of  a  note  and  bill,  respectively,  although  there 
were  no  subscri})tions  by  the  maker  or  drawer.*  But,  of 
course,  in  all  cases  in  which  the  signature  appears  in  other 
than  the  customary  place,  some  doubt  is  involved  concerning 
the  intention  of  the  person  to  execute  the  paper,  sufficient  to 
put  every  reasonable  person  upon  his  inquiry.  It  casts 
suspicion  upon  the  validity  of  the  execution. 

--;  §  13.  Joint  and  several  notes.  —  A  note  or  bill  may  be 
'  executed  by  any  number  of  persons.  If  it  is  executed  by 
one  person,  it  is  called  a  several  note;  but  if  it  is  executed 
by  two  or  more,  it  is  either  a  joint  or  a  joint  and  several 
note,  according  to  the  phraseology  employed.  If  it  is  only 
a  joint  note,  only  one  suit  can  be  maintained  upon  it,  to 
which  all  the  joint-makers  must  be  made  parties.  But  if  it 
is  a  joint  and  several  note  one  suit  may  be  brought  against 
them  all,  or  suits  may  be  instituted  against  each  one  sep- 
arately. But,  according  to  the  common  laAv,  the  action 
could  not  be  maintained  against  a  number  greater  than 
one  and  less  than  all.  The  action  must  be  against  one  or 
against  all.     Hence  a  joint  and  several  note,  in  effect,  con- 

1  Schneider  v.  Norris,  2  Maule  &  S.  286;  Brown  v.  Butchers'  Bank,  6 
Hill,  443;  Pennington  v.  Baehr,  48  Cal.  565  (1875). 

2  See  post,  chapter  on  Agency. 

3  TurnbuU  v.  Thomas,  I  Hughes,  172;  Hunt  v.  Adams,  5  Mass.  359; 
Clason  V.  Bailey,  14  Johns.  484;  Steininger  v.  Hoch,  8  Wriglit,  2C3; 
Schmidt  17.  Schmaelter,  45  Mo.  502. 

*  Taylor  v.  Dobbins,  1  Strange,  399;  Sauudersou  v.  Jackson,  2  Bos. 
&  P.  238. 

32 


CH.   II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.  §     13 

sists  of  several  notes,  one  more  than  the  number  of  joint- 
makers.^  And  so  separate  and  distinct  are  the  joint  'and 
several  liabilities,  that  the  joint  note  may  be  valid,  while 
one  or  more  of  the  several  notes  may  be  void.^  But  this 
general  statement  must  be'  taken  with  the  understandins: 
that  a  joint  action  against  all  the  makers,  and  a  satisfaction 
of  the  judgment  in  an  action  against  any  one  of  them,  will 
be  a  bar  to  any  further  action.^  If  the  note  is  signed  by 
more  than  one  person,  and  the  plural  pronoun  "we"   is 

1  Fletcher?;.  Dyte,  2  T.  R.  78;  Bulbeck  v.  Jones,  5  Jur.  (n.  s.)  1317; 
King  V.  Houre,  13  M.  W.  565;  Beechliam  v.  Smith,  E.  B.  &  E.  (96  E.  C. 
L.  R.)  442. 

2  Maclae  v.  Sutherland,  3E.  &B.  (77  E.  C.  L.  R.)  1;  Byles  on  Bills,  *8. 

3  Mr.  Sharswood  says,  in  his  notes  to  Byles  on  Bills,  *8:  "  What  is 
thus  broadly  stated,  certainly  requires  to  be  received  with  some  modifi- 
cation. A  joint  and  sevei'al  note  by  A.,  B.  or  C,  is  not  the  separate  note 
of  each  to  all  intents  and  purposes.  The  payee  could  not  indorse  A.'s 
note  to  one,  B.'s  note  to  ajiother,  and  C.'s  note  to  a  third  person;  nor 
could  he  even  make  a  separate  transfer  of  the  proportionate  liability  of 
each  maker,  without  the  consent  of  all  three.  Their  consent  might 
make  a  new  special  contract  on  the  part  of  each  to  pay  the  assignee  of 
each  his  proportion.  In  regard  to  the  remedy,  there  is  also  an  impor- 
tant distinction  to  be  borne  in  mind.  The  holder  may  sue  all  the  makers 
jointly,  or  each  severally,  but  he  cannot  do  both.  As  to  remedy,  then, 
there  are  not  four  notes,  but  either  one  or  three,  at  the  election  of  the 
holder.  A  suit  against  the  three  jointly  would  preclude  an  action  against 
each —  severally — and  e  contra.  Buller,  J.,  in  Streatfleld  v.  Halliday,  3 
T.  R.  782.  The  case  of  King  and  another  v.  Houre,  13  M.  &  W.  494, 
which  is  relied  on  as  the  authority  for  the  doctrine  of  the  text,  decides 
merely  that  a  judgment  (without  satisfaction)  recovered  against  one  of 
two  joint  debtors  is  a  bar  to  an  action  against  the  other.  ISecus  when 
the  debt  is  joint  and  several.  '  The  distinction,'  says  Baron  Parke,  «  be- 
tween the  case  of  a  joint  and  several  contract  is  very  clear.  It  is  argued 
that  each  party  to  a  joint  contract  is  severally  liable;  and  so  he  is  in  one 
sense,  that  if  sued  separately,  and  he  does  not  plead  in  abatement,  he  is 
liable  to  pay  the  entire  debt;  but  he  is  not  severally  liable,  in  the  same 
sense,  as  he  is  on  a  joint  and  several  bond,  which  instrument,  though  on 
one  piece  of  parchment  or  paper,  in  effect  comprises  the  joint  bond  of 
all,  and  the  several  bonds  of  each  of  the  obligors,  and  give  different  rem- 
edies to  the  obligee.'  This  is  very  true,  but  can  hardly  be  said  to  sup- 
port the  position  that  such  a  bond  is  in  legal  effect  four  distinct  bonds." 

3  .  33 


§    13  UKQUISITES    OF    BILLS    AND    NOTES.  [CH.   II. 

ii:?cd  ill  the  bod}' of  the  note,  "  Ave  iiromise  to  pay,"  etc.,  it 
is  a  joint  note.^  And  whenever  ii  note  is  signed  by  two  or 
more  per.son?*,  it  will  be  presumed  to  be  a  joint  note,  in  the 
absence  of  anything  on  the  face  of  it  to  indicate  that  it  was 
to  be  a  joint  and  several  note.^  In  order  to  make  a  note 
joint  and  several,  the  promise  to  pay  in  the  note  is  usually 
qualified  by  the  adverbs  '*  jointly  and  severally."  But  this 
is  not  necessary  if  the  same  intention  is  indicated  in  any 
other  way.  If  a  note  is  signed  by  more  than  one  person, 
and  the  singular  pronoun  "  I  "  is  used  in  the  body  of  the 
note,  as  the  promissor,  the  note  is  joint  and  several;^  and 
this,  too,  although  one  of  the  signatures  is  expressed  to 
have  been  affixed  by  a  surety.*  A  note,  reading  "  we  or 
either  of  us,"  is  a  joint  and  several  note,^  and  so  likewise 
is  a  note  in  the  singular,  and  signed  by  one  partner  in  the 
firm's  name.®  It  does  not  affect  the  validity  of  a  note,  if 
it  reads  in  the  plural,  and  is  signed  by  only  one  party, 
whether  it  appears  that  the  note  was  intended  to  be  a  joint 
or  a  joint  and  several  note.  It  will  be  a  good  and  several 
note  of  the  person  who  signs  it  and  puts  it  into  circulation. 


i  Barrett  v.  Funay,  38  Incl.  8G. 

2  Johnson  v.  King,  20  Ala.  270;  Chandler  v.  Rucklick,  1  Carter  (Ind.), 
391. 

3  March  v.  Ward,  Peake's  Eep.  130;  Clerk  v.  Blackstock,  Holt's  N.  P. 
C.  (o  E.  C.  L.  R.)  474;  Henimeuway  v.'  Stone,  7  Mass.  58;  Ladd  r.  Baker, 
6  Post.  (N.  H.)  70;  Monson  v.  Drake,  40  Conn.  552;  Ely  v.  Clute,  19  Hun 
(N.  Y.),  35;  Partridge  v.  Colby,  19  Barb.  248;  Holraan  v.  Gilliam,  6  Rand , 
39;  Barrett  v.  Skinner,  2  Bailey,  88;  Maiden  v.  Webster,  30  Ind,  317; 
Dill  V.  White,  52  Wis.  169. 

*  Dart  V.  Sherwood,  7  Wis.  523;  Palmer  v.  Grant,  4  Conn.  389;  Hunt 
■V.  Adams,  5  Mass.  358.  But  if  a  note  reads  '*  we  promise  "  and  is  signed 
by  two,  one  of  whom  characterizes  himself  as  surety,  the  note  is  neverthe- 
less joint.     See  cases  snpra. 

5  First  Nat.  Bk.  v.   Fowler,  36  Ohio  St.  524;  Pogue  v.   Clark,   25  HI. 
336;  Harvey  f.  Irvine,  11  Iowa,  82. 
,  °  Doty  r.  Smith,  11  .Johns.  543;  Rees  v.  Abbott,  Cowper,  832. 

"  Whitmore  v.  Nickerson,  125  Mass.  496;  Rice  v.  Gove,  22  Pick.  158; 
Dickerson  r.  Burke,  25  Ga.  225;  Holmes  v.  Sinclair,  19  HI.  71. 
34 


CH.  II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.  §     14 

The  distinction  between  joint  notes  and  joint  and  several 
notes  has  been  practically  abolished  in  most  of  the  States, 
particularly  in  those  States  in  which  the  New  York  code  of 
procedure  has  been  adopted,  by  a  provision  that  in  all 
joint  contracts,  suit  may  be  brought  against  any  number  of 
the  obligors,  thus  making  all  such  contracts  joint  and  sev- 
eral, whatever  may  be  their  phraseology. 

§  14.  Two  or  more  drawers.  —  The  bill,  like  a  note, 
may  also  be  drawn  by  two  or  more  persons,  acting  in  their 
individual  capacity  as  well  as  members  of  a  copartner- 
ship. ^  But  where  they  are  acting  as  partners,  the  partner- 
ship is  treated  as  one  person,  who  draws  the  bill.  Where 
two  or  more  persons,  not  partners,  unite  in  drawing  a  bill, 
they  must  be  treated  as  independent  legal  personalities ; 
and  each  is,  therefore,  entitled  to  demand  and  notice  of  the 
dishonor  of  the  bill  by  the  drawee.^  Each  is  liable  in  soUdo 
to  the  drawee,  if  he  accepts  and  pays  the  bill;  and  it  has 
been  held  that  the  signature  of  one,  in  the  character  of 
surety,  will  not  effect  his  liability  to  the  drawee,  even  though 
the  drawee  knew  it,  and  the  word  "  surety  "  was  written 
on  the  bill  after  the  signature. -"^  It  does  not  much  matter, 
where  the  drawers  sign  the  bill;  and  if  one  of  them,  as 
surety,  should  sign  on  the  back,  instead  of  on  the  face,  he 
cannot  be  held  as  an  indorser,  but  must  be  sued  in  the 
character  of  drawer.* 


.1  As  to  the  powers  of  partners  in  respect  to  the  law  of  commercial 
paper,  seepos{,  chapter  on  Partners. 

2  Suydara  v.  Westfall,  4  Hill,  211;  s.  c.  2  Deuio,  205;  McMean  u. 
Little,  3  Baxter,  332. 

3  Suydam  v.  AVestfall,  4  Hill,  211;  2  Deuio,  205;  Swilley  v.  Lyon,  18 
Ala.  558.  But  see  Griffith  v.  Reed,  21  Weud.  502;  Wiug  v.  Terry,  5  Hill, 
160,  in  wiiich  it  is  held  tliat  a  "  surety  "  drawer  is  only  liable  to  tlie  payee 
or  indorsee. 

*  Mathews  v.  Bloxsorae,  Q.  B.  33  L.  J.  H.  209.  See  Penny  v.  lunes, 
1  Cr.  M.  &  R.  439.     ^ea  post,  chapter  Ou  Indorsement. 

35 


§     15  REQUISITES    OF    BILLS    AND    NOTES.  [CII.   II. 

§  1').  The  name  of  the  drawee. — An  orderly  writl'jn 
bill  of  exchange  contains  the  given  name  and  surname  of 
the  drawee;  and  usually  it  is  put  in  the  left-hand  corner  at 
the  bottom  and  on  the  face  of  the  bill.^  But  the  place  of 
the  address  is  not  essential,  provided  it  is  possible  to  ascer- 
tain which  is  intended  as  the  drawee.  Nor  is  it  necessary 
that  the  name  of  the  drawee  should  appear  on  the  bill,  if 
a  description  of  his  person,  official  character,  or  place  of 
residence  is  given,  whereby  it  may  be  easily  ascertained 
who  is  intended.  Although  irregular,  this  would  be  a  good 
bill,  certainly  when  accepted  by  the  drawee.^  But  as  long 
as  a  bill  is  not  accepted  by  some  one,  the  failure  to  put  the 
name  and  address,  or  some  other  accurate  description  of 
the  drawee  on  the  face  of  the  paper,  is  fatal  to  its  validity 
as  a  bill.  It  was  held  differently  in  an  early  case,^  but  die 
position  of  the  text  is  now  generally  sustained,  both  in  this 
country  and  in  England.*     But  it  seems  to  be  the  generally 

J  1  Daniel's  Ncgot.  Inst.  109;  Story  onBills  (Bennett's  ed.),  §  58,  note 
1.  But  it  seems  that  the  Italians  and  Hollanders  are  accustomed  to 
place  the  name  of  the  drawee  on  the  back  of  the  bill. 

2  Gray  w.  Milner,  8 Taunt.  739;  3  Moore,  90.  In  this  case  the  bill  read, 
"Payable  at  No.  1,  Wilmot  street,  opposite  the  Lamb,  Bethnal  Green, 
Loudon."     See  also  Cork  v.  Bacon,  45  Wis.  192. 

8  Regina  v.  Hawkes,  2  Moo.  C.  C.  60. 

*  In  Peto  V.  Reynolds,  9  Exch.  410,  Alderson,  B.,  said :  "  With  respect 
to  the  question  whether  this  instrument  is  or  is  not  a  bill  of  exchange, 
the  case  of  Regina  v.  Hawkes  is  undoubtedly  iu  point.  I  must  own, 
however,  that  I  now  think  I  was  wrong  on  that  occasion.  The  case 
seems  to  have  been  decided  ou  the  ground  that  Milner  v.  Gray,  8  Tauut. 
739,  governed  it;  and  the  fact  was  not  adverted  to,  that  Gray  v.  Milner 
may  thus  be  explained:  that  a  bill  of  exchange  made  payable  at  a  partic- 
ular place  or  house,  is  meant  to  be  addressed  to  the  person  who  resides 
at  that  place  or  house.  Therefore,  in  that  case,  the  bill  was  on  the  face 
of  ibdirected  to  some  one;  and  the  court  held,  that,  inasmuch  as  the  de- 
fendant promised  to  pay  it,  that  was  conclusive  evidence  that  he  was  the 
party  to  whom  it  was  addressed.  But  in  the  case  of  Regina  v.  Hawkes, 
the  instrument  was  addressed  to  no  one."  In  Ball  v.  Allen,  15  Mass. 
435  Pai'ker,  C.  J.,  said:  "The  mere  possession  of  a  paper  drawn  in  the 
form  of  an  order,  the:e  being  no  drawee  in  existence,  we  think,  cauQot 

3(> 


CH.   II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.  §     16 

received  opinion  that  such  ii  defective  bill  will  be  cured  by 
an  acceptance  by  some  one,  since  the  actual  acceptor  would, 
by  his  acceptance,  be  estopped  from  denying  that  he  was 
the  drawee.^ 

Any  uncertainty  concerning  the  person  who  was  intended 
to  be  the  drawee  may  be  explained  away  by  parol  evidence, 
at  least  when  the  ambiguity  is  latent.^ 

There  may  be  two  or  more  drawees,  and  each  must  accept 
individually  in  order  to  be  bound,  if  they  are  not  partners. 
But  it  is  not  essential  to  the  negotiability  of  the  bill  that 
all  should  accept.  The  acceptance  of  one,  or  of  any  number 
less  than  the  whole  number,  is  sufficient,  and  the  bill  may 
be  negotiated  without  the  acceptance  of  the  others.^  But 
it  has  been  held  that  the  names  of  all  must  appear  upon 
the  face  of  the  bill,  in  order  that  there  might  be  a  joint 
acceptance.* 

§  16.  Address  to  drawees  in  the  alternative. — Unlike 
the  signatures  of  the  makers  or  drawers,  the  bill  of  ex- 
entitle  the  possessor  to  an  action  in  any  form;  for  tlie  paper  may  have 
been  carelessly  dealt  with  as  being  imperfect,  and  may  have  come  to  the 
possessor  by  finding.  It  is  enough  for  the  purpose  of  justice,  tliat  the 
holder  of  such  a  paper  may  entitle  himself  to  recover,  merely  by  show- 
ing that  he  paid  for  it,  or  that  he  came  otherwise  fairly  by  it;  for  it  can 
rarely  happen  that  he  will  be  unable  to  produce  the  person  from  whom 
he  received  it.  If  the  circumstances  are  such  as  induce  him  to  decline 
producing  evidence  of  the  manner  iu  which  the  paper  cara3  to  him,  no 
probable  harm  will  be  the  result  of  his  loss  of  the  money."  See,  also, 
Reynolds  v.  Peto,  11  Exch.  418;  Watrous  v.  Hallbrook,  39  Tex.  572;  1 
Parson's  N.  &  B.  61 ;  1  Daniel's  Negot.  Inst.  106 ;  Forward  v.  Thompson, 
12  Up.  Can.  Q.  B.  R.  103;  Ellis  v.  Wheeler,  3  Pick.  19. 

1  1  Parsons' N.  &  B.  288,  289;  Wheeler  v.  Webster,  1  E.  D.  Smith  3; 
Gray  v.  Milner,  8  Taunt.  739;  3  Moore,  90.  But  see,  contra,'  Peto  u. 
Reynolds,  9  Exch.  410;  Davis  v.  Clarke,  6  Q.  B.  16. 

2  .Jackson  u.  Sell,  11  Johns.  201;  McCullough  v.  Wainwright,  14  Pa. 
St.  171;  Cork  v.  Bacon,  45  Wis.  192. 

^  Mountstephen  v.  Brooke,  1  Barn.  &  Aid.  224. 

*  Davis  V.  Clarke,  6  Ad.  &  El.  (n.  s.)  (6  Q.  B.)  16;  Jackson  v.  Hud- 
son, 2  Camp.  447. 

37 


§     17  RKQUISITES    OF    BILLS    AND    NOTES.  [cil.   II. 

change  may  bo  addressed  to  two  or  more  persons  in  the 
alternative  "  to  A.  or  to  B. ;  "  and  foreign  bills  of  exchange 
freqnently  read:  *'  To  A.  and  in  case  of  need,  apply  to  B." 
Or  in  French,  it  would  read:  "  a  A.,  au  besoin  chez  B." 
In  all  such  cases  the  holder  is  obliged  to  present  the  bill  to 
all  the  persons  named  as  alternative  drawers,  until  he  se- 
cures an  acceptance.-^ 

§  17.  Designation  of  the  payee.  — In  order  that  a  bill 
or  note  may  be  negotiable,  it  must  indicate  with  certainty 
to  whom  it  is  payable.  If  no  payee  is  named  or  described 
by  the  paper,  it  is  not  negotiable,  and  it  is  doubtful  whether 
the  paper  has  any  value  at  all.^  But  it  has  been  held  that 
where  the  promise  is  to  pay  "  you,"  without  any  further 
designation  of  the  payee,  it  would  be  a  good,  non-negotia- 
ble note,  and  it  may  be  shown  by  parol  evidence  to  whom 
the  note  was  payable.^  But  it  is  not  necessary  that  the 
payee  should  be  actually  named  in  the  paper.  He  may  be 
described  by  the  office  he  holds,  and  the  official  capacity  in 
which  he  is  made  the  payee.  A  bill  or  note  may  be 
made  payable  to  the  administrators  or  the  executors  of 
a  deceased  person,  to  an  infant's  guardian  or  to  the  trust- 
ees of  one.*  Or  it  may  be  made  payable  to  the  officer  of 
a  corporation  or  incorporated  society;  and  without  any 
further  description,  it  will  be  payable  to  whoever  occupies 
the  office,  at  the  time  of  presentment  and  demand,  since  the 

1  Anoa.,  12  Mod.  447;  1  Parsons'  N.  &  B.  G4,  05;  1  Daniel's  Negot. 
Inst.,  §§  98,  HI. 

2  Gibson  v.  Minet,  1  H.  Bl.  5(J9;  Brown  v.  Gilraan,  13  Mass.  158;  Eu- 
thoven  v.  Hoyle,  13  C.  B.  373;  Douglas  v.  Wilkesou,  6  Wend.  637; 
Mathews  v.  Redwine,  23  Miss.  233;  Rich  v.  Starbuck,  51  Ind.  87;  Mayo 
V.  Chenowith,  Breese,  155;  Mcintosh  v.  Lytle,  26  Minn.  336. 

3  Kiuuey    v.   Flinn,   2  R.    I.  319;  Shackleford   v.  Hooker,  54    Miss. 

716. 

♦  Adams   v.  King,  16  111.  169;  Moody  v.  Threlkeld,  13  Ga.  55;  Meggiu- 
son  V.  Harper,  2  Cromp.  &  M.  322. 
38 


CH.   II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.  §     17 

corporation  or  society  was  the  real  payee. ^  But  if  the  bill 
or  note  is  payable  to  the  officer  of  an  unincorporated  soci- 
ety, it  must  be  made  payable  "  to  the  present"  occupant 
of  the  office,  as  payment  "  to  the  secretary  for  the  time 
being,"  would  make  the  paper  void  for  the  want  of  cer- 
tainty as  to  the  payee. ^ 

It  has  been  held  permissible  in  commercial  paper  to 
make  it  payable  to  a  deceased  person's  estate,  inasmuch 
as  this  would  be  equivalent  to  making  it  payable  to 
his  personal  representatives,^  and  it  is  difficult  to  dis- 
cover any  substantial  reason  for  denying  the  negotia- 
bility of  such  paper.  The  description  of  the  payee  is  suf- 
ficiently clear,  for  under  the  statutes  of  administration,  all 
choses  in  action,  belonging  to  the  estate  of  a  deceased  per- 
son, are  payable  to  the  personal  representatives.  But  the 
weight  of  authority  is  against  this  view.*  Commercial  pa- 
per may  also  be  made  payable  to  "  the  heirs  of  A."  or  to 
*'  A.  or  his  heirs,"  even  though  A.  should  then  be  alive  ;^  or 

1  Holmes  v.  Jacques,  1  Q.  B.  376 ;  Fisher  v.  Ellis,  3  Pick.  322 ;  Rogers 
V.  Gibson,  15  Ind.  218;  McBrown  u.  Corporation  of  Lebanon,  31  Ind. 
268;  Vater  v.  Lewis,  36  Ind.  293;  Patton  v.  Melville,  21  Up.  Can.  Q. 
B.  263. 

2  Storm  V.  Sterling,  3  Ellis  &  B.  382;  Robertson  v.  Steward,  I  Man.  & 
G.  511;  Rex  v.  Box,  6  Taunt.  325;  Davis  v.  Garr,  2  Seld.  124. 

3  Hendricks'  Exrs.  v.  Thornton,  45  Ala.  800. 

4  Tittle  V.  Thomas,  30  Miss.  132;  Bowles  v.  Lambert,  54  111.  239  (but 
this  case  maybe  sustained  on  other  grounds).  In  Lyon  y.  Marshal,  11 
Barb.  248,  Edwards  J.  said:  "The  Instrument  sued  upon  (by  Lyon's 
representatives)  was  made  payable  to  the  estate  of  Moses  Lyon,  de- 
ceased, and  not  to  any  person  or  persons  by  name.  Such  an  instrument 
is  clearly  not  a  promissory  note  under  the  statute.  But,  whatever  it 
may  be  considered,  it  certainly  is  not  a  promise  to  pay  the  testator, 
for  he  is  described  as  deceased.  It  could  only  be  recovered  upon  as  a 
promise  to  pay  some  other  person  oi*  persons.  If  it  be  regard'ed  as  a 
promise  to  pay  the  plaintiffs,  as  it  was  treated  in  this  case,  there  was  no 
necessity  for  their  suing  in  a  representative  capacity;  and  having  done 
so  unnecessarily,  they  are  liable  to  pay  costs,  without  a  special  motion 
or  order  for  that  purpose." 

*  Bacon  v.  Fitch,  1  Root.  181 ;  Knight  v.  Jones,  21  Mich.  161. 

39 


§     17  KEQUISITKS    OF    BILLS    AND    NOTES.  [rd.   n. 

to  the  bearer,  to  the  holder,  unci  the  like.^  AYherevBr  there  is 
a  misdescription  or  misnaming  of  tho  payee,  which  causes 
an  ambiguity,  it  will  not  be  fatal  to  the  negotiability  of  the 
paper,  if  it  can  be  shown  with  the  aid  of  extrinsic  evidence 
who  was  intended.^  A  note  payable  to  ♦'  The  People  of 
Illinois  "  will  be  construed  as  payable  to  the  State  of  Illi- 
nois.^ If  a  bill  or  note  is  payable  to  A.,  and  there  are  two 
persons  of  the  same  name,  father  and  son,  the  presumption 
of  law  is  that  the  father  was  intended,  unless  the  word 
"  junior,"  or  some  other  word  of  distinction,  is  added ;  but 
this  is  only  Si  prima  facie  presumption,  that  may  be  rebut- 
ted by  evidence  that  the  son  was  intended.  This  presump- 
tion will  also  give  way  to  a  counter  presumption,  when  the 
son  has  possession  of  the  paper  and  brings  an  action  upon 
it.  He  is  entitled  to  recover,  unless  the  defendant  shows 
that  the  father  was  intended.*  Where  there  is  an  acknowl- 
edgment or  receipt  of  consideration  from  a  person  named, 
followed  by  an  indefinite  promise  to  pay,  as,  for  example, 
where  the  paper  reads:  "Received  of  J.  S.  one  hundred 
dollars,  which  I  promise  to  pay  on  demand,"  it  w^ill  be  in- 
ferred from  the  acknowledgment  of  consideration  that  J. 
S.  was  the  intended  payee,  and  it  will  be  regarded  as  a  suf- 
ficient designation  of  the  payee. ^  And  where  a  note  reads: 
"  Due  to  bearer  $100,  which  I  promise  to  pay  J.  S.  or  or- 
der," it  is  payable  to  J.  S.  or  order,  and  not  to  bearer.^ 

1  Mechanics'  Bank  v.  Straitor,  3  Abbott  (N.  Y.  App.),  2S9;  Hathwickp. 
Owen,  44  Miss.  803. 

2  Willis  V.  Barrett,  2  Starkie,  29;  Jacobs  v.  Benson,  29  Me.  132;  Hall  v. 
Tafts,  18  Pick.  455;  Jackson  v.  Sell,  11  Johns.  201;  Cork  u.  Bacon,  45 
Wis.  192. 

3  Esley  V.  People  of  Illinois,  23  Kan.  510. 

*  Stebbing  v.  Spicer,  19  L.  J.  C.  P.  24;  3  C.  B.  (65  E.  C.  L.  K.)  827; 
STveeting  v.  Fowler,  1  Starkie,  IOC;  Wilson  v.  Stubbs,  Hobart,  330. 

5  Green  v.  Davies,  4  B.  &  C.  235;  Ashley  v.  Ashley,  3  Moore  &  P.  186; 
Chadwick  v.  Allen,  2  Strange,  706 ;  Pothier  de  Change,  n.  31 ;  Story  on 
Bills,  §  55. 

6  Cock  V.  Fellows,  1  Johns.  143. 

40 


CII.   II.]       fOMPOXEXT    PARTS    OF    BILLS    AND    NOTES.  §     18 

§  18.  Joint  and  alternative  payees. —  A  note  or  bill 
may  be  payable  to  two  or  more  joint  pa^^ees,  and  their  in- 
terests are  presumed,  in  the  absence  of  proof  to  the  con- 
trary, to  be  co-equal.^  Although  a  different  conclusion  has 
been  reached  by  some  of  the  courts,^  it  is  the  prevailing 
opinion  in  England  and  in  the  United  States,  that  a  bill  or 
note  will  not  be  negotiable  on  the  ground  of  uncertainty  as 
to  the  payee,  if  it  is  made  payable  to  two  or  more  persons 
in  the  alternative.'^  But  such  a  note  or  bill  may  be  sued  on 
as  a  non-negotiable  instrument,  at  least  in  the  names  of  all 
the  payees.*  To  such  an  extent  is  the  payment  of  com- 
mercial paper  to  alternative  payees  objected  to,  that  this 
circumstance  was  held  to  deprive  a  note  of  its  negotiability, 
where  it  was  made  payable  "  to  Olive  Fletcher  or  R.  H. 
Oakes,  administrators  of  Winslow  Fletcher,  deceased."  ^ 
But  the  alternative  payees  in  this  case  would  not  seem  to  be 
any  serious  uncertainty,  since  whoever  received  payment 
would  receive  it  in  a  representative  capacity  and  for  the 
benefit  of  the  decedent's  estate. 


1  Tisdale  v.  Maxwell,  58  Ala.  40. 

2  Ellis  V.  McLemorej  1  Bailey  L.  13 ;  Spauldiug  v.  Evans,  2  McLean, 
139. 

*  Blanckenhageu  v.  Blundell,  2  Barn.  &  Aid.  418;  Osgood  v.  Pearson 
4  Gray,  455;  Carpenter  v.  Farnsworth,  106  Mass.  5G1;  Walrad  v.  Petrie,  4 
Wend.  576;  Willoughby  v.  Willoughoy,  5  N.  H.  245;  Quinby  v.  Merritt, 
11  Humph.  440.  In  Blanckenhagen  v.  Blundell,  Abbott,  C.  J.,  said: 
*'  For  if  a  note  is  made  payable  to  one  or  other  of  two  persons,  it  is  pay- 
able to  either  of  them  only  on  the  contingency  of  its  not  having  been  paid 
to  the  other,  and  is  not  a  good  promissory  note  within  the  statute." 

*  Willoughby  v.  Willoughby,  5  N.  H.  245;  Walrad  v.  Petrie,  4  Wend, 
576;  Quinby  v.  Merritt,  11  Humph.  440. 

5  Musselman  v.  Oakes,  19  111.  81.  In  this  case,  Caton,  C.  J.^  said: 
"  The  instrument  sued  on  was  payable  in  the  alternative  to  one  of  two 
persons,  and  for  that  reason  is  not  a  promissory  note,  and  could  not  be 
sued  on  as  such.  *  *  *  Here  the  promise  was  to  pay  Fletcher  or 
Oakes;  but  which,  is  uncertain;  which  of  them  had  the  right  to  receive 
the  pay  is  not  specified,  and  the  legal  right  to  the  money  is  not  vested  in 
either." 

41 


§     11)  REQUISITES    or    HILLS    AND    NOTES.  [cil.    II. 

§  19.  Fictitious  or  non-existing  parties  —  Adopted 
names.  —  In  order  to  increase  the  number  of  indorsements, 
and  thus  to  give  the  paper  a  fictitious  credit,  the  names  of 
fictitious  persons  are  used  ;  for  example,  the  paper  is  made 
payable  to  a  fictitious  person,  whose  name  appears  also  in  an 
indorsement  on  the  back.  As  fraud  always  vitiates  a  con- 
tract, the  use  of  fictitious  names  on  commercial  paper,  will 
make  it  invalid  for  all  purposes,  except  in  the  hands  of  an 
innocent  purchaser.^  But  a  bona  fide  holder  for  value  may 
sue  the  maker  or  drawer  on  it,  as  if  it  were  payable  to 
bearer. 2  In  England  it  is  held  that  the  acceptor  of  a  bill  of 
exchange,  payable  to  a  fictitious  person,  may  be  sued  on  it, 
as  if  it  were  payable  to  bearer,  if  he  knew  of  the  fraud  or 
fiction,  when  he  accepted  it,  but  that  he  is  not  liable  if  he 
were  ignorant  of  the  fraud. ^     It  is  difficult  to  see  why  the 

^  Huuter  v.  Jeffery,  Peake's  Ad.  Cas.;  Cliitty,  Jr.,  587;  Minet  v.  Gib- 
son, 3  T.  11.  481;  1  H.  Bl.  569.  But  it  seems  that  a  person,  -who  takes 
for  value  a  uote  payable  to  a  fictitious  person,  may  recover  the  value  in  an 
action  for  money  had  and  received.     See  Foster  v.  Shattuck,  2  N.  H.  447. 

2  Collis  V.  Eraett,  1  H.  Bl.  313;  Vere  v.  Lewis,  3  T.  R.  298;  Phillips 
V.  lutheru,  18  J.  S.  (n.  s.)  (114  E.  C  L.  R.)  094;  s.  c.  18  C.  B.  (n.  s.)(;94; 
Blodgett  V.  Jackson,  40  N.  H.  2(3;  Plets  v.  Johnson,  3  Hill  (N.  Y.),  115; 
Forbes  v.  Espy,  21  Ohio  St.  483;  Lane  v.  Krckle,  22  Iowa,  404;  Stevens 
V.  Strong,  2  Sandf.  139;  Farnsworth  u.  Drake,  11  lud.  103;  Irving  Nat. 
Bk.  V.  Alley,  79  N.  Y.  53fi.  In  New  York  the  same  rule  is  laid  down  by 
statute.     1  N.  Y.  Rev.  Stat.  768;  Rogers  v.  Ware,  2  Neb.  29. 

3  Hunter  v.  Blodgett,  2  Yeates,  480;  Tatlock  v.  Harris,  3T.  R.  174; 
Vere  v.  Lewis,  3  T.  R.  182;  Minet  v.  Gibson,  1  H.  Bl.  509;  Gibson  v. 
Hunter,  2  H.  Bl.  187,  288;  Bennett  v.  Farnell,  1  Camp.  130.  To  the  last 
case  the  reporter  appended  the  following  note:  "  Almost  all  the  mod- 
ern cases  upon  this  question  arose  out  of  the  bankruptcy  of  Livesay  & 
Co.,  and  Gibson  &  Co.,  who  negotiated  l^ills,  witli  fictitious  names  upou 
Ihcm,  to  the  amount  of  nearly  a  million  sterling  a  year.  The  first  case 
v,:'.s  Tatlock  V.  Harris,  3  T.  R.  174,  in  which  the  Court  of  King's  Bench 
held  that  the  bona  fide  holder  for  a  valuable  consideration  of  a  bill  drawn 
payable  to  a  fictitious  person,  and  indorsed  in  that  name  by  the  drawer, 
might  recover  the  amount  of  it,  in  an  action  against  the  acceptor,  for 
money  paid  or  money  had  and  I'eceived,  upon  the  idea  that  there  was  an 
appropriation  of  so  much  money  to  be  paid  to  the  person  who  should 

42 


CIl.   II.]       COMPONENT    PAUTS    OF    BILLS    AND    NOTES.  §     ID 

ignorance  or  knowledge  of  the  acceptor,  that  the  named 
payee  was  a  fictitious  person,  should  affect  his  liability  to 
an  innocent  holder,  for  his  acceptance  might  well  be  taken 
as  an  indorsement  of  the  legality  of  the  whole  proceeding:^ 
Where  the  bill  or  note  is  made  payable  to  a  third  person  by 
his  real  name,  neither  the  intended  payee  nor  any  subse- 
quent holder  can  recover  on  it  unless  it  is  indorsed  by  the 
apparent  payee,  even  though  it  be  shown  that  he  has  no  in- 
terest in  the  paper.  This  case  is  different  from  the  one  in 
which  the  name  of  the  designated  payee  is  altogether  ficti- 
tious.'^ But  there  is  no  legal  obstacle  in  the  way  of  any  one 
assuming  a  name  different  from  the  one  that  was  given  him 
by  his  father ;  and  if  he  does  this  for  honest  purposes  and 
in  good  faith,  the  use  of  such  an  adopted  name  will  not 
vitiate  the  contracts  to  which  he  may  become  a  party. ^     It 

become  the  holder  of  the  bill.  lu  Vere  v.  Lewis,  3  T.  II.  182,  decided  the 
same  day,  the  court  held  there  was  no  occasion  to  prove  that  the  defend- 
ant had  received  any  value  for  the  bill,  as  the  mere  circumstance  of  his 
acceptance  was  sufficient  evidence  of  this;  and  three  of  the  judges 
thought  the  plaintiff  might  recover  on  a  count  which  stated  that  the  bill 
was  drawn  payable  to  bearer.  Miuet  v,  Gibson,  3  T.  R.  481,  put  this 
point  directly  in  issue,  and  the  unanimous  opinion  of  the  court  was,  that 
where  the  circumstance  of  the  payee  being  a  fictitious  person  is  kuown 
to  the  acceptor,  the  bill  is  in  effect  payable  to  bearer.  Soon  after,  the 
Court  of  Common  Pleas  laid  down  the  same  doctrine,  in  Collis  v.  Era- 
ett,  1  H.  Bl.  313.  This  decision  was  acquiesced  in,  but  Minct  v.  Gibson 
was  carried  up  to  the  House  of  Lords.  1  H.  Bl.  569.  The  opinion  of  the 
judges  being  then  taken,  Eyre,  C.  B.  (p.  618),  and  Heath,  J.  (p.  619), 
were  for  reversing  the  judgment  of  the  court  below,  and  Lord  Thur- 
low,  C,  coincided  with  them  (p.  625);  but  the  other  judges  thinking 
otherwise  judgment  was  affirmed  (Pari.  Cas.  8vo.  II.  48).  The  last  case 
upon  the  subject  reported  is  Gibson  v.  Hunter,  2  H.  Bl.  187,  288,  which 
came  before  the  House  of  Peers  upon  a  demurrer  to  evidence,  and  in 
which  it  was  held  that,  in  an  action  on  a  bill  of  this  sort  against  the  ac- 
ceptor, to  show  that  he  was  aware  of  the  payee  being  fictitious,  evidence 
is  admissible  of  the  circumstances  under  which  he  had  accepted  other 
bills  payable  to  fictitious  persons." 

1  See  Rogers  v.  Ware,  2  Neb.  29. 

2  Rogers  V.  Ware,  2  Neb.  29. 

3  Ladd  V.  Rogers,  11  Allen,  209;  Bartlott  v.  Tucker,  101  Mass.  345. 

43 


§    20  REQUISITES    OF    BILLS    AND    NOTES.  [cil.    II. 

is  not  necessary  for  a  man  to  have  the  consent  of  the  legis- 
hiture  in  order  to  change  his  name. 


§  20.  Same  person  as  different  parties.  —  In  order 
that  commercial  paper  may  be  negotiated  without  indorse- 
ment and  the  consequent  liability  of  indorscrs,  and  yet 
avoid  the  commercial  discredit  of  an  indorsement"  without 
recourse,"  it  has  become  quite  common  for  bills  and 
notes  to  be  made  payable  to  the  order  of  the  drawer  or 
maker,  so  that  the  named  pa^^ee  is  the  same  person  as  the 
drawer  or  maker.  The  drawer  or  maker  then  indorses  it 
in  blank,  and  it  is  then  transferred  as  if  it  had  been  made 
payable  to  bearer.  Of  course  two  parties,  distinct  and 
separate,  are  as  necessary  to  the  negotiation  of  a  bill  or 
note  as  they  are  to  the  making  of  any  other  contract.  In 
consequence  of  this  necessity,  it  was  once  supposed  that  a 
note  or  bill  would  be  invalid,  if  the  payee  and  the  maker 
or  drawer  were  the  same  person. ^  But  while  it  is  manifest 
that  such  a  bill  or  note  is  valueless,  until  it  has  been  trans- 
ferred by  indorsement  to  another  person,  because  there 
has  been  no  delivery,  and  consequently  not  a  complete 
contract ;  as  soon  as  it  has  been  indorsed  and  delivered  to 
the  purchaser,  there  are  two  distinct  separate  parties  to  the 
contract,  and  the  paper  may  be  siied  on  as  if  originally 
made   payable  to    bearer. ^     In    a    bill  of    exchange,    the 


1  Flight  V.  McLean,  IG  M.  &  W.  51 ;  Muhling  v.  Sattler,  3  Mete.  (Ky.) 
286. 

2. See  Brown  v.  De  Wiuton,  17  L.  J.  C  P.  (60  E.  C.  L.  R.)  380;  Gay  v. 
Laudor,  17  L.  J.  C.  P.  (GO  E.  C.  L.  R.)  287;  Wood  v.  Mytton,  10  Q.  B. 
805;  LovejoyiJ.  Spafford,  93  U.  S.  430;  Bishop  v.  Rowc,  71  Me.  263; 
Smalley  v.  White,  44  Me.  442;  Commonwealth  v.  Bntterick,  100  Mass. 
12;  Commonwealth  v.  DuUiuger,  118  Mass.  43D;  United  States  v.  White, 
2  Hill,  154;  Plets  v.  Johnson,  3  Hill,  114;  Miller  v.  Weeks,  22  Pa. 
St.  9;  Hall  v.  Shorter,  46  Ala.  453;  Woods  v.  Ridley,  11  Humph. 
194;  Rice  v.  Hogan,  8  Dana,  134;  Wilder  v.  De  Wolf,  24  111.  190;  Mul- 
drom  V.  Caldwell,  7  Mo.  5G3;  Scull  v.  Edwards,  G  En°^.  (.\rk.)  24;  Main 
44 


CII.  II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.  §    20 

drawer  may  draw  upon  himself,  so  that  the  drawer  and  drawee 

V.  Hilton,  o-t  Cal.  110.  In  Hooperu.  Williams,  2  Exch.  13,  Parke,  B.,  said: 
"  The  pi'incipal  question  was,  what  the  effect  of  this  instrument  was  as 
it  stood  originally  before  it  was  Indorsed,  and  whether  it  was,  within 
the  statute  of  3  and  4  Anne,  chapter  9,  a  good  and  valid  note  payable  to 
the  order  of  the  maker.  The  opinions  of  this  court  and  of  the  Queen's 
Bench  as  to  this  point  are  at  variance  with  one  another.  In  Flight  v. 
McLean,  this  conrt  held,  on  special  demurrer  to  the  first  count  of  a  dec- 
laration—  stating  a  note  payable  to  the  order  of  the  maker,  and  in- 
dorsed to  the  plaintiffs  —  that  the  count  was  bad,  such  a  note  not  being 
written  within  the  statute  of  Anne.  The  case  of  Wood  v.  Mytton, 
afterward  came  on  in  the  Queen's  Bench.  It  was  an  action  on  a  similar 
note,  indorsed,  to  the  plaintiff.  After  verdict  for  the  plaintiff,  a  motion 
was  made  in  arrest  of  judgment,  and  the  court  discharged  the  rule, 
holding,  after  a  minute  examination  of  all  the  provisions  of  the  statute 
of  Anne,  that  such  a  note  was  within  that  statute,  and  assignable  by  in- 
dorsement. Though  these  decisions  are  not  at  variance,  as  will  be 
afterwards  explained,  the  construction  of  the  statute  by  the  two  courts 
differs.  After  a  careful  perusal  of  the  statute,  we  must  say  that  we  do 
not  think  that  it  ever  contemplated  the  case  of  notes  payable  to  the 
maker's  order,  which  are  incomplete  instruments,  and  have  no  binding 
effect  on  any  one  till  indorsed.  The  court  of  Queen's  Bench  thought 
that,  though  the  first  part  of  the  first  section  of  the  statute  of  Anne,  ap- 
plied only  to  notes  payable  to  another  person,  or  his  order,  or  to  bearer, 
which  notes  it  makes  obligatory  between  the  parties,  yet  that  the  sec- 
ond part  applies  to  every  note  payable  to  any  person,  so  as  to  enable 
them  to  sue  upon  them  as  upon  the  ti'ansfer  of  bills  of  exchange. 
The  previous  part  of  the  section  had  given  to  the  payee  when  the 
note  was  payable  to  another  person,  or  to  another  person  or 
order,  and  to  the  bearer,  whoever  at  any  time  he  might  be,  a  right 
to  sue,  thus  providing  entirely  for  notes  payable  to  bearer,  whether 
in  the  hands  of  the  original  or  a  subsequent  bearer;  and  then 
the  section  proceeds  to  make  the  class  of  notes  payab'e  to  a  person 
or  order  transferable.  We  think  that  the  Legislature,  by  the  second 
part  of  the  section,  could  only  mean  to  make  that  instrument 
which  gave  a  right  to  sue  assignable,  and  no  right  to  sue  could  ex- 
ist in  any  one  in  the  case  of  a  note  payable  to  the  maker's  order,  until 
the  order  was  made  in  the  shape  of  an  indorsement.  Until  that  in- 
dorsement was  made,  it  was  an  imperfect  instrument,  and,  in  truth,  not 
a  promissory  note  at  all,  and  consequently  not  transferable  under  the 
statute.  What,  then,  is  the  effect  of  the  indorsement  to  another  person? 
We  think  it  was  to  perfect  the  incomplete  instrument,  so  that  the  origi- 
nal writing  and  indorsement  taken  together  became  a  binding  contract, 
though  an  informal  one,  between  the  maker  and  indorsee;  and   theu> 

45 


§    20  REQUISITES    OF    BILLS    AND    NOTES.  [CH.   II. 

will  be  the  same  person.^  And  when  indorsed,  it  will  bo  a 
irood  neo-otiable  instrument,  in  which  the  drawer,  the  drawee 
and  the  payee  were  the  one  person,  the  drawer  drawing  on 
himself,  payable  to  his  own  order. ^  But  in  all  such  cases, 
where  the  drawer  and  drawee  are  the  same  person,  the 
paper  may  be  treated,  at  the  option  of  the  indorsee,  either 
as  a  bill  of  exchange  or  a  promissory  note.  The  drawer  is 
bound  without  notice  of  dishonor.^  And  in  order  that  it 
may  be  treated  as  an  accepted  bill,  there  is  no  need  of  a 


iind  not  imtil  then,  it  became  an  assignable  note.  *  *  *  It  appears 
to  us  then,  tliat  the  instrument  in  this  case  was  wlieu  it  first  became  a 
binding  promissory  note,  a  note  payable  to  bearer,  and  consequently 
was  properly  described  in  the  declaration.  This  view  of  the  case  recon- 
ciles the  decision  of  this  coui't  in  Flight  v.  McLean,  with  that  of  the 
Queen's  Bench  in  Wood  v.  Mytton,  but  not  the  reasons  given  for  those 
decisions.  In  the  case  in  this  court,  the  declaration  was  not  bad  on 
special  demurrer,  as  it  did  not  set  out  the  legal  effect  of  the  instrument. 
In  that  in  the  Queen's  Bench,  the  motion  being  for  arrest  of  judgment, 
the  declaration  was  in  substance  good,  for  it  set  out  an  inartificial  con- 
tract, which  had  the  legal  effect  of  a  valid  note  payable,  as  stated  on  the 
record,  to  the  plaintiff.  The  diffei-ence  between  the  courts  in  the  con- 
struction of  the  statute  is  of  no  practical  consequence,  as,  in  our  view 
of  the  case,  securities  in  this  informal,  not  to  say  absurd  form,  are  still 
not  invalid;  and  it  might  be  of  much  inconvenience  if  they  were,  for 
there  is  no  doubt  that  this  form  of  note,  probably  introduced  long  after 
the  statute  of  Anne  —  and  for  what  good  reason  no  one  can  tell  —  has 
become  of  late  years  exceedingly  common;  and  it  is  obvious  that,  until 
they  are  indorsed,  they  must  always  remain  in  the  hands  of  the  maker 
himself,  and  so  he  can  never  be  liable  upon  them."  The  same  rule 
is  declared  to  be  the  law  in  New  York  by  statute.  1  Rev.  Stat.  N. 
Y..7G8. 

J  Debers  v.  Harriott,  1  Shower,  1G3;  Robinson  v.  Bland,  2  Burr. 
1077;  Harvey  v.  Kay,  9  B.  &  C.  3G4;  Roach  r.  Ostler,  1  Man.  &  Ry.  120; 
Planters'  Bk.  v.  Evans,  30  Tex.  592;  French  v.  Gordon,  10  Kan,  370. 

2  Harvey  v.  Kay,  9  Barn.  &  Cres.  3G4;  Lovejoy  v.  Spafiford,  93  U.  S. 
430;  Randolphs.  Parish,  9  Porter,  76;  Walton  v.  Williams,  44  Ala.  347; 
Planters'  Bk.  v.  Evans,  36  Tex.  592. 

»  Roach  V.  Ostler,  1   Man.  &  Ry.  120;  Armfield  v.  Allport,  27  L.  J. 
Exch.  42;  Wardens  of  St.  James  Church  v.  Moore,  1  Ind.  289;  Chicago 
R.  R.    Co,    V.   West,   37    Ind.  211;  Randolph    v.   Parish,  9   Porter,  78; 
Planters'  Bk.  v.  Evans,  36  Tex.  592. 
46 


CII.  II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.  §    21 

written  acceptance/  since  in  such  a  bill  the  drawer  guaran- 
tees that  he  will,  as  drawee,  honor  the  bill. 

The  most  common  instances  of  bills  of  exchange,  where 
the  drawer  and  the  drawee  are  the  same  person,  are  those 
in  which  one  member  of  a  firm  or  corporation  draws  on  a 
branch  of  the  firm  or  corporation  doing  business  in  a 
different  place  ;^  those  in  which  an  agent  draws  a  bill  upon 
his  principal,  with  his  authority;^  and  those  in  which  one 
officer  of  a  corporation  draws  on  another  officer,  who  has 
the  custody  of  the  funds. ^  In  all  these  cases  the  paper 
may  be  treated  as  a  bill  or  note,  at  the  option  of  the 
holder. 

The  identity  of  the  parties  to  a  bill  or  note  will  not  be  pre- 
sumed by  the  court  from  the  fact  that  the}-  have  the  same 
names.  In  order,  therefore,  that  a  bill  whose  drawer  and 
drawee  are  the  same  person,  may  be  treated  as  a  promis- 
sory note,  the  identity  of  the  parties  must  be  alleged  and 
proved.^  But  it  is  probably  more  customary  to  sue  upon 
such  paper  as  bills  of  exchange,  and  not  admit  the  identity 
of  the  drawer  and  the  drawee.^ 

§  21.  Words  of  negotiability. —  When  bills  of  exchange 
first  came  into  use,  as  has  already  been  explained,  choses  in 
action  were  in  general  non-assignable ;  and  in  order  that  the 
intention  of  the  parties,  to  make  commercial  paper  assigna- 
ble and  negotiable,  may  be  indicated,  it  became  the  custom 
to  make  it  in  express  terms  payable  to  A.  or   order,  or 

1  Cunningham  v.  Warclwell,  3  Fairfax,  46G ;  Planters'  Bk.  v.  Evans, 
36  Tex.  592. 

2  Miller  v.  Thompson,  3  Man.  &  G.  576 ;  Williams  v.  Ajres,  3  App. 
Cas.  133. 

3  Raymond  v.  Mann,  45  Tex.  301. 
*  See  post,  §  128. 

5  Roach  V.  Ostler,  1  Man.  &  Ry.  120;  Harvey  v.  Kay,  9  Barn.  &  C.  364; 
Starke  v.  Cheeseman,  Carthew,  509;  Cooper  v.  Poston,  1  Duval,  92. 

6  Walton  V.  Williams,  44  Ala.  347. 

47 


§    21  REQUISITES    OF    BILLS    AND    NOTES.  [CH.   II. 

boai'cr,  or  using  like  words  conveying  an  authority  to  trans- 
fer it.  So,  also,  when  promissory  notes  were  by  the  stat- 
ute of  Anne  declared  to  be  negotiable,  like  bills  of  exchange, 
the  notes  which  would  fall  within  the  statute  were  described 
as  containing  these  or  other  words  of  negotiability.  It  has  in 
consequence  become  the  universal  opinion  that  in  order  that 
commercial  paper  may  be  negotiable  and  the  indorsers  be 
held  liable  as  guarantors  by  theholder  of  the  paper,  it  must 
contain  these  or  like  words  of  negotiability.^  Without 
these  Avords  of  negotiability,  the  assignee  of  the  bill  and 
note  would  acquire  only  a  right  of  action  against  his  im- 
mediate indorser,  and  according  to  the  early  common  law 
he  could  not  maintain  an  action  on  it  against  the  maker  or 
the  drawer  and  acceptor .2  But  since  the  inauguration  and 
establishment  of  the  law  of  commercial  paper,  the  common- 
law  prohibition  of  the  assignment  of  chosesin  action  has  by 
statute  been  almost  entirely  abolished,  so  that  a  bill  or  note 
need  not  })e  negotiable  in  order  to  be  assignable.  And  it 
is  not  without  foundation  in  the  reason  of  things  to  assert, 
that  since  the  words  of  negotiability  were  needed  to  dis- 
tino-uish  bills  and  notes  that  could  be  assigned  from  those 
which  fell  under  the  common-law  prohibition  against  assign- 
ment; and  since,  furthermore,  the  peculiar  principles  of 
negotiability  were  subsequently  developed  in  obedience  to 
the  demands  of  the  commercial  world ;  now^  that  all  choses 
in  action    may    be    assigned,  these   words   of  negotiability 

1  Smith  V.  Kendall,  G  T.  R.  143;  s.  c.  1  Esp.  231;  Burchell  v.  Slocock, 
2  Lil.  Raym.  1545;  Rex  v.  Box,  G  Tauut.  328;  Bank  of  Sherman  v.  Apper- 
8on,  •!  Fed.  R.  25;  Maule  v.  Crawford,  14  Hun  (N.  Y.),  193;  Douglass  v. 
Wilkeson,  6  Wend.  G37;  United  States  v.  White,  2  Hill  (N.  Y.),  59; 
Hackney  v.  Jones,  3  Humph.  612;  Warren  v.  Scott,  32  Iowa,  22;  Hisford 
V.  Stone,  7  Neb.  380. 

''  Hill  V.  Lewis,  1  Salk.  132;  Smallwood  v.  Vern,  1  Strange,  478;  E,al- 
lingalls  u.    Gloster,    3    East,   482;   Douiilass  ??.  Wilkeson,  G   Wend.  037; 
United  States  v.  White,  2  Hill  (X.  Y.),  59;  Hackney  v  Jones,  3  Hun  ph. 
C12;  Warren  v.  Scott,  32  Iowa,  22. 
48 


cii.  II.]     co:mponent  parts  of  bills  and  notes.        §   21 

cease  to  be  an  essential  to  a  negotiable  bill  or  note. 
It  maybe  a  doubtful  question,  whether  this  position  could 
be  taken  in  respect  to  promissory  notes,  since  some  of  the 

'  authorities  claim  that  promissory  notes  are  not  negotiable 
independently  of  statute,^  and  all  the  statutes  describe  the 
notes  as  containing  these  words.  But  the  question  is  not 
thus  complicated  in  its  application  to  bills  of  exchange  ;  nor 
is  it  so,  in  relation  to  promissory  notes,  in  those  States  in 
which  such  notes  are  held  to  be  negotiable  at  common  law. 
If  it,  therefore,  be  satisfactorily  proven  that  the  only  object 
of  using  these  words  in  commercial  paper  was  to  distinguish 

.  such  paper  from  other  c/t OSes  z?i  action,  which  could  not  be 
assigned,  there  is  no  obstacle  in  the  way  of  their  being  de- 
clared to  be  non-essential  to  a  negotiable  instrument.  But 
there  does  not  seem  to  be  any  disposition  on  the  part  of  the 
courts  to  take  this  departure  ;  and  in  the  same  way  as  they 
continue  to  hold  that  seals  are  necessary  to  the  validity  of  a 
deed  of  conveyance  of  lands,  mistaking  the  causes  and  ob- 
jects which  co-operated  in  the  development  of  the  hiAV,^  so 
we  may  expect  the  courts  to  go  on  holding  that  these  useless 
words  of  negotiability  are  necessary  to  make  a  note  or  bill 
negotiable,  until  the  change  is  made  by  statute.  But 
these  words  are  only  necessary  to  give  to  the  bill  or  note 
its  negotiable  qualities,  viz.  :  that  the  holder  may  take  it 
free  from  equitable  defenses  and  with  the  liability  of  the 
indorser  or  his  indorsement  as  a  guarantor.  All  the  other 
qualities  of  commercial  paper,  for  example,  the  allowance 
^  of  days  of  grace,  may  be  claimed  for  paper  that  has  not  these 
words  of  negotiability.^ 

\      No  exact  or  particular  form  of  words  is  necessary  in  order 

'  See  ante,  §  6. 

2  See  Tiecleman  on  Real  Prop.,  §  783. 

3  Story  on  Bills,  §  60;  Michigan  Bk.  v.  Eldred,  9  Wall.  544;  Wells  v. 
Brigham,  6  Cush.  6;  Averett's  Admr.  /;.  Booker,  5  Gratt.  1C7. 

4  49 


u 


§     21  REQUISITES    OF    BILLS    AND    NOTES.  [CII.   II. 

to  give  the  character  of  negotiability  to  commercial  paper. 
It  was  once  supposed  that  a  bill  or  note,  payable  to  one 
or  bearer,  was  not  negotiable. ^  It  is,  however,  not  only  well 
established  now,  that  such  an  instrument  is  negotiable  ;2  but  it 
is  not  even  necessary  that  the  instrument  should  be  made  pay- 
able to  one  or  order  or  bearer.  A  paper  payable  to  the  order 
of  a  person  is  as  negotiable  as  one  payable  to  A.  or  order ;  ^ 
and  any  other  word  or  words,  signifying  an  authority  to 
transfer,  may  be  used  in  the  place  of  "  order '^  and 
*'  bearer."  Thus  instruments  payable  to  a  person  or  cor- 
poration or  holder,*  to  A.  or  "  assigns  "  ^  and  theliice  have 
all  been  held  to  be  negotiable.  As  it  was  expressed  by  the 
Supreme  Court  of  Pennsylvania,  "  '  order  '  or  '  bearer  '  are 
convenient  and  expressive,  but  clearly  not  the  only  words 
which  will  communicate  the  quality  of  negotiability.  Some 
equivalent  words  should  be  used.  Words  in  a  bill,  from 
which  it  can  be  inferred  that  the  person  making  it,  or  any 
other  party  to  it,  intended  it  to  be  negotiable,  will  give  it  a 
transferable  quality  against  that  person.  The  concession, 
therefore,  may  be  made,  that  if  the  makers  of  this  note, 
having  omitted  the  usual  words  to  express  negotiability, 
had  said  '  this  note  is  and  shall  be  negotiable,'  it  would 
have  been  negotiable."  ® 

1  Hodges  V.  Steward,  1  Salk.  125. 

2  Grant  v.  Vaughau,  3  Burr,  1510;  Eddy  v.  Bond,  19  Me.  461;  Davega 
V.  Moore,  3  McCord,  482.  But  a  note,  payable  "  to  the  bearer  A.,"  is 
held  not  to  be  negotiable.  Warren  v.  Scott,  32  Iowa,  22.  In  Illinois,  it 
has  been  held,  under  the  language  of  the  State  statute,  that  notes  payable 
to  a  person  or  bearer  are  not  negotiable.     Garvin  v.  Wiswell,  83  111.  218. 

3  Frederick  ».  Cotton,  2  Shower,  8;  Smith  v.  McClure,  5  East,  476; 
Howard  v.  Palmer,  64  Me.  8G;  Durgin  v.  Bartol,  64  Me.  473;  Fisher  v. 
Pomfret,  12  Mod.  125;  Huling  v.  Hugg,  1  W.  &  S.  418. 

4  County  of  Wilson  v.  National  Bank,  103  U.  S.  776;  Putnam  v. 
Cryraes,  1  McMull.  9. 

s  Porter  v.  City  of  Janesville,  3  Fed.  Rep.  619;  Douglass  v.  Wilkeson, 
6  Wend.  637;  United  States  v.  White,  2  Hill  (N.  Y.),  59. 
6  Porter,  J.,  in  Raymond  ».  Middletou,  29  Pa.  St.  530. 
50 


CII.   II.]       COiMPONEXT    PARTS    OF    BILLS    AND    NOTES.  §    23 

§  22.  Note  made  negotiable  at  particular  bank. — Some- 
times a  no.te  is  made  negotiable  at  a  particular  bank. 
<»  By  making  a  note  negotiable  in  bank,  the  maker  author- 
izes the  bank  to  advance  on  his  credit  to  the  owner  the  sum 
expressed  on  its  face.  It  would  be  a  fraud  in  the  bank  to 
set  up  offsets  against  this  note  in  consequence  of  any  trans- 
actions between  the  parties.  These  offsets  are  waived,  and 
cannot,  after  the  note  has  been  discounted,  be  again  set 
up."i  Because  a  note  is  made  negotiable  at  a  certain 
bank,  it  does  not  mean  that  it  is  also  payable  at  that  bank 
unless  this  is  expressly  stated.  And  even  when  a  note  is 
"  negotiable  and  payable"  at  a  certain  bank  named,  it  may 
be  negotiated  and  paid  elsewhere.^ 

§  23.  A  distinct  obligation  to  pay.  —  The  negotiable 
bill  or  note  must  also  create  by  the  words  used,  or  by  nec- 
essary implication,  a  distinct  or  certain  obligation  to  pay 
the  sum  of  money  stated.  A  bill  must  contain  a  certain 
direction  or  command  to  the  drawee  to  pay  to  the  payee,  while 
the  note  must  contain  a  certain  promise  to  pay.  The  polite- 
ness of  commercial  intercourse  has  made  it  more  or  less  cus- 
tomary to  make  use  of  the  phrase  "please  pay."  It  is  only 
a  form  of  civility,  and  does  not  indicate  that  the  direction 
to  pay  is  any  less  a  command.  It  has,  therefore,  been  gen- 
erally held  that  the  use  of  that  expression  will  not  deprive 
the  paper  of  its  negotiable  character.^  But  where  the  en- 
tire phraseology  of  the  instrument  indicates  that  it  presents 
a  request,  the  granting  of  which  is  a  favor  and  not  a  right, 
it   is  usually  held  that  such  a  paper  is   not  a  bill  of    ex- 

1  Marshall,  Ch.  J.,  in  Mandeville  v.  Union  Bank,  9  Cranch,  9. 

2  Warden  v.  Hughes,  3  Wend.  41G;  Schoharie  Nat.  Banli.  v.  Bevard, 
51  loTva,  258. 

•'  Jarvis  v.  Wilson,  46  Conn.  90 ;  Patterson  v.  Poindexter,  6  Watts  & 
S.  235;  Bresenthal  v.  Williams,  1  Duval,  329;  Wheatley  v.  Strobe,  12 
Cal.  92. 

51 


§     23  KEQII^^ITKS    OF    RILLS    AND    NOTICS.  [ciI.    11. 

change.^  The  employ iiiont  of  words  of  negotiability  will, 
however,  counteract  the  effect  of  words  of  supplication,  and 
will  make  an  instrument  a  good  bill,  which  would  otherwise 
be  defective  for  the  want  of  a  certain  diroctiftn  to  pay.'* 
So,  also,  where  there  is  a  certain  promise  to  pay,  expres- 
sions of  gratitude  will  not  affect  the  le^al  character  of  the 
note.'^ 

The  word  "  pay  "  need  not  necessarily  be  used.  Any 
other  equivalent  such  as  "deliver"  or  "  credit  in  cash" 
will  be  sufficient.^ 

It  is  necessary  to  the  character  of  a  promissory  note 
that  it  should  contain  a  certain  promise  to  pay,  but 
no  precise  form  of  words  is  required,  provided  they  clearly 
present  a  promise  to  pay,  and  it  is  not  merely  an  acknowl- 
edgment of  indebtedness.^  In  England  it  is  definitely 
settled  that  mere  due  bills,  or  "  I.  O.  U.'s,"  as  they  are 
called  there,  are  not  promissory  notes  in  any  sense,  they 
bein2:  nothins:  more  than  acknowledcrments  of  existing 
indebtedness,  without  any  express  promise  to  pay.®     This 

1  Thus  instruments  reading  "  Please  to  send  £10  by  bearer,  as  I  am 
so  ill  I  cannot  wait  upon  you,"  (The  King  i\  Ellor,  1  Leach  Cr.  L.  o23), 
or  "  Mr.  Little,  please  to  let  the  bearer  have  £7,  and  place  itto  my  account 
and  you  will  much  oblige  your  humble  servant"  (Little  v.  Slackford, 
1  M.  &  M.  371),  were  held  not  to  be  bills  of  exchange.  On  the  other 
hand,  it  has  been  held  that  a  paper  reading.  "  Please  to  let  bearer  have 
$50;  I  will  arrange  it  with  you  this  afternoon,  yours  most  obedient," 
was  a  good  bill.     Bresenthal  v.  Williams,  1  Duval,  329. 

2  Thus  a  paper,  whose  language  was:  "Mr.  Nelson  will  much  oblige 
Mr.  Webb  by  paying  I.  Ruff  or  order,  on  his  account,  twenty  guineas," 
was  declared  to  be  a  negotiable  bill.     Ruff  v.  Webb,  I  Esp.  R.  129. 

3  Ellis  V.  Mason,  7  Dowling,  598. 

*  Morris  v.  Lee,  2  Ld.  Raym.  1396;  Ellison  v.  Collinridge,  9  C.  &  B. 
570;  Allen  V.  Rea  Fire  etc.,  Ins.  Co.,  9  C.  &  B.  574.  But  see  Woolley  v. 
Sergeant,  3  Halsted,  202. 

*  "I  promise  to  pay  or  cause  to  be  paid,"  was  held  to  be  sufficient. 
Lowell  V.  Hill,  G  Car.  &  P.  238. 

^  Fisher  v.  Leslie,  1  Esp.  425;  Lsrael  v.  Lsrael,  1  Camp.  499;  Payne  v. 
Jenkins,  4  Car.  &  P.  325;  Fesenmayer  v.  Adcock,  IG  M.  &  W.  449;  Home 
52 


CH.   II.]       COMPONENT    TARTS    OF    BILLS    AND    NOTES.  §     24 

is  also  the  law  in  some  of  the  United  States.^  But  in 
others  of  the  States  a  mere  naked  due  bill  has  been  held  to  be 
a  good  promissory  note,^  and,  like  bills  of  exchange,  when 
the  words  of  acknowledgment  are  accompanied  by  words 
of  negotiability,  due  bills  are  very  commonly  held  to  be 
good  promissory  notes. ^  So,  also,  the  words  "  on  de- 
mand"  will  be  sufficient  evidence  of  a  promise  to  pay,  to 
give  to  a  due  bill  the  character  of  a  promissory  note,* 
but  not  the  words  "for  value  received."^  A  guaranty 
of  another's  debt  is  not  a  promissory  note,  as  where 
one  undertakes  to  pay  "a  sum  of  money"  for  goods 
ordered   by   a  third  person.^ 

§  24.  Time  of  payment.  —  Bills  and  notes  must  also  in- 
dicate, either  expressly  or  by  implication,  the  time  of 
payment.     They  are  usually   made  payable   at  a    certain 


V.  Bedfearne,  4  Bing.  (N.  C.)  433;  Melanatte   v.  Teasclale,  13  M.    &   W. 
216;  Tompkins  v.  Ashby,  6  B.  &  C.  541  (9  Dow.  &  Ry.  543). 

1  Currier  v.  Lockwood,  40  Conn.  348 ;  Read  v.  Wlieeler,  2  Yerg.  50 ; 
Gray  v.  Bowden,  23  Pick.  282;  Davis  v.  Allen,  3  Comst.  168;  Hotch- 
kiss  V.  Mosher,  48  N.  Y.  478. 

2  Cummiugs  v.  Freeman,  2  Humph.  145  (overruling  Read  v.  Wheeler, 
2  Yerg.  50)  ;  Brewer  v.  Brewer,  G  Ga.  538 ;  Fleming  v.  Burge,  6  Ala. 
373;  Anderson  v.  Pearce,  36  Ark.  293;  Brady  u.  Chandler,  31  Mo.  28; 
Jacquin  v.  Warren,  40  111.  459. 

3  Sackett  v.  Spencer,  29  Barb.  180;  Russell  v.  Whipple,  2  Conn.  536; 
Carver  17.  Hayes,  47  Me.  257;  Hussey  v.  Winslow,  59  Me.  170;  Franklin 
V.  March,  6  N.  H.  364;  Cummings  v.  Fi'eeman,  2  Humph.  144;  Huyck  v. 
Meador,  24  Ark.  192;    Marrigan  ■;;.  Page,  4  Humph.  247. 

■*  Smith  V.  Allen,  5  Day,  337.  It  is  certainly  a  promissory  note, 
where  a  due  bill  is  stated  to  be  "  payable  on  demand,"  Casborne  v.  Dut- 
tou,  1  Selwyn's  N.  P.  401;  Waithman  v.  Elzee,  1  C.  &  K.  35;  Kimball  v. 
Huntington,  10  Wend.  675;  Pepoor  v.  Stagg,  1  Nott  &  McCord,  102; 
Mitchell  V.  Rome  P..  R.  Co.,  17  Ga.  574. 

5  Currier  v.  Lockwood,  40  Conn.  348;  Gray  v.  Bowden,  23  Pick.  282; 
Davis  V.  Allen,  3  Comst.  168;  Hotchkiss  v.  Mosher,  48  N.  Y.  478;  Read  v. 
Wheeler,  2  Yerg.  50.  But  see,  contra,  Finney  v.  Shirley,  7  Mo.  42; 
McGowen  v.  West,  7  Mo.  42;  Huyck  v.  Meador,  24  Ark.  192. 

6  Jarvis  v.  Wilkins,  7  M.  &  W.  410. 

53 


§    24  REQUISITES    OF    BILLS    AND    NOTES.  [ciI.   II. 

fixed  time  in  the  future,^  or  a  specified  time  "  after  date,"' 
or  "  after  sight ;"  or  they  may  be  made  payable  "  at  sight  " 
or  "  on  demand."  "Whenever  no  time  is  specified  on  the 
face  of  the  instrument,  it  is  presumed  to  be  i)ayal)le  on 
demand.^     And    the  same    conclusion  has    been   reached, 

where  the  paper  was  payable  " months  after  date." ' 

A  little  change  in  phraseology  from  what  is  ordinarily 
used  will  not  affect  the  time  of  payment,  provided  it 
conveys  the  same  meaning.  Thus  a  note  or  bill  pay- 
able "on  call"  or  "when  demanded"  is  payable 
on  demand.*  So,  also,  is  a  bill  or  note  construed  to  be 
payable  on  demand,  when  the  time  of  payment  is  left  more 
or  less  at  the  option  of  the  holder.  Thus,  for  example,  where 
a  note  was  payable  "  in  such  installments  and  at  such  times 
as  the  directors  of  said  company  may  from  time  to  time 
require,"  it  was  held  to  be  in  effect  paj^able  on  demand.'^ 
A  bill  or  note  may  also  be  payable  at  a  specified  time  after 
demand  or  notice,  as  in  the  note,  which  was  made  payable 
"in  whole  or  from  time  to  time  in  part,  as  the  same  shall 
be  required  within  thirty  days  after  demand,  or  upon 
notification  of  thirty  days  in  any  newspaper.^ "  When  the 

1  Martin  v.  Lewis,  30  Gratt.  672. 

2  Kendall  v.  Galvin,  15  Me.  151;  Porter  v.  Porter,  51  Me.  376;  Bacon 
V.  Page,  1  Conn.  404;  Whitlock  v.  Underwood,  2  B.  &  C.  157;  Abbott  v. 
Douglass,  1  C.  B.  496;  Aldons  v.  Cornwell,  L.  R.  3  Q.  R.  573;  Thompson 
V.  Ketchum,  8  Johns.  189;  Ilerrick  v.  Bennett,  8  Johns.  374;  Cornell  v. 
Moultou,  3  Deuio,  12;  Gaylord  v.  Van  Loan,  15  Wend.  308;  Stover  v. 
Hamilton,  21  Gratt.  273;  Bowman  v.  McChesney,  22  Gratt.  609;  Freeman 
V.  Ross,  15  Ga.  252;  Collier  v.  Gray,  1  Tenn.  110;  Jones  v.  Brown,  11 
Ohio  St.  601;  Green  v.  Drebillis,  1  Iowa,  552;  Keyes  v.  Fenstermaker,  24 
Cal.  329. 

3  McLean  v.  Nichlen,  3  Vict  Rep.  107. 

4  Kingsbury  ».  Butler,  4Vt.  458;  Bowman  v.    McChesney,   22    Gratt. 

609. 

6  White  V.  Smith,  77  111.  351;  Washington  Co.  Mut.  Ins.  Co.  v.  Miller, 
26  Vt.  77;  Goshen  v.  Turpin,  9  Johns.  217. 

6  Protection  Ins.  Co.  v.  Hill,  31  Conn.  534;  Clayton  v.  Gosling,  5  B. 
&C.  360;   Dutchess  Co.  v.  Davis,  14  Johns.   238;    Stillwell  v.   Craig,  58 

54 


CH.  II,]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.  §    23 

word  "  month  "  is  used  in  the  statement  of  the  time  of 
payment,  a  calendar  month  is  presumed  to  be  intended ; 
and  so  likewise  will  a  calendar  year  be  presumed,  when  the 
word  "year"  is  employed.  It  is  stated  by  Mr.  Story, 
that  in  England  foreign  bills  are  frequently  drawn  payable 
at  usance  or  usances;  this  means  that  the  bill  is  payable  at 
such  time  as  the  custom  of  mercantile  intercourse  between 
the  country  of  the  drawer  and  the  place  of  payment  ordi- 
narily prescribes  for  the  payment  of  such  bills. ^ 

,       §  25,   Payment  must  be    unconditional.  —  It  is  also  a 
^^  requisite  of  commercial  paper  that  it  must  be  payable  abso- 
/   lutely  and  at  all  events.    If  the  payment  is  made  to  be  de- 
pendent upon  any  contingent  event,  the  instrument  ceases 
to  be  commercial  paper.     In  order  to  be  negotiable,  the  pay- 
"^  ment  must  be  unconditional.     Numerous  cases  are  given  in 
Avhich  the  paper  was  declared  to  be  non-negotiable    because 
the  payment  was  subjected  to  a  contingency. ^    And  the  nego- 
tiability of  the  paper  will  be  destroyed  as  to  the  whole  sum 
that  is  payable,  even  though  the  contingency  relates  only  to 
a  part.^     So,  also,  is  the  note  or  bill  non-negotiable,  where 
it  is  payable  after  the  happening  of  two  events,   one  of 
which  is  contingent.*. 

Mo.  24;  Walker  v.  Roberts,  Car.  &  Marsh.  590;  Gates  v.  Hibbard,  5  Biss. 
99.  In  Hobarts  v.  Dodge,  1  Fairfax,  15G,  the  note  was  payable  "  on  de- 
mand with  interest  after  four  months,"  it  was  held  to  mean  "payable 
four  months  after  demand."     But  see  Loring  v.  Guruey,  5  Pick.  15. 

1  Story  on  Bills,  §  50. 

^  Provided  a  certain  ship  should  arrive;  (Coolidge  u.  Ruggles,  15 
Mass.  387;  Palmer  u.  Pratt,  2  Bing.  185;  provided  a  railroad  should  be 
built  to  a  certain  point  in  a  certain  time;  (Blackman  v.  Lehman,  63  Ala. 
547;  Eldred  v.  Malloy,  2  Col.  320)  ;  provided  the  maker  shall  be  able  (Ex 
parte  Tootle,  4  Ves.  372;  Lalinas  v.  Wright,  11  Tex.  572)  ;  and  for  cases 
in  which  like  conditions  were  held  to  deprive  the  instrument  of  its 
negotiable  character,  see  Appleby  v.  Beddolph,  8  Mod.  303;  Mason  v. 
Metcalf,  8  Baxt.  440;  Roberts  v.  Peake,  1  Burr.  323. 

3  Palmer  v.  Gray,  6  Gray,  340. 

*  Sackett  u.  Palmer,  25  Barb.  175. 

55 


r 


§     2.3  KEQUISITKS    OF    BILLS    AND    NOTES.  [CH.   II. 

The  payment  may  also  be  made  conditional  by  the  uncer- 
tainty or  indefinitone.ss  of  the  time  of  payment.  The 
uncertainty  as  to  the  day  when  the  note  or  bill  is  payable 
is  not  a  defect,  provided  the  time  described  in  the  paper 
must  come  sooner  or  later.  Such  an  uncertainty  may  ex- 
ist, without  taking  away  the  negotiable  character  of  the 
paper.  Nor  is  remoteness  of  the  time  material.^  Thus, 
a  note  or  bill,  payable  at  a  certain  time  after  the  death  of 
a  person,  whether  he  be  the  maker,  payee,  or  drawee,  would 
be  negotiable,  for  the  person  would  be  sure  to  die,  and 
hence  the  payment  is  not  conditional.^  And  it  has  also 
been  held  in  England,  that  a  note  or  bill  is  negotiable  which 
is  payable  after  a  government  ship  has  been  paid  off,  since 
the  government  is  sure  to  pay.^ 

But  a  note  or  bill  will  not  be  negotiable,  where  it 
is  payable  after  an  occurrence,  which  may  never  happen. 
AVhenever  an  instrument  is  made  payable  after  an  uncertain 
event,  it  is  deprived  of  its  negotiable  character.  Thus,  a 
note  payable  when,  or  at  a  specified  time  after, one  comes 
of  age,  is  not  negotiable,  because  it  is  uncertain  whether 
the  person  will  live  until  he  reaches   his  majority.*     And 


J  Worth  V.  Case,  42  N.  Y.  362. 

=  Cook  u.  Colehau,  2  Strange,  1217;  Colehan  v.  Cooke,  Welles,  393; 
Roffcy  V.  Greenwell,  10  A.  &  E.  222;  Bristol  v.  Warner,  19  Conn.  7;  Conn 
u.  Thornton,  46  Ala.  587;  Mortee  v:  Edwards,  20  La.  Ann.  236;  Mr. 
Daniel  cites  (see  1  Negot.  Inst.  §  4G,  note  2)  from  Morrison's  Diet,  of 
Decisions,  p.  1408,  the  Scotch  case  of  Stewart  i'.  Fullcrton,  *'  in  which  it 
appears  that  a  party  accepted  a  bill  payable  at  a  certain  time  after  his 
decease.  He  survived  the  acceptance  thirty-seven  years.  The  court  re- 
garded the  matter  as  so  anomalous  as  not  to  be  subject  of  a  bill  of  ex- 
change, and  sustained  objections  to  the  bill." 

*  Andrews  v.  Franklin,  1  Strange,  24;  Evans  v.  Underwood,  1  Wils. 
262.     But  see,  contra,  1  Parsons'  N.  &  B.  30. 

*  Kelley  v.  llemmingway,  13  111.  604.  But  when  coming  of  age  is  re- 
ferred to  merely  for  the  purpose  of  indicating  the  actual  time  of  payment, 
and  the  payment  is  not  made  to  depend  upon  the  fact  that  this  person 
reaches  his   majority,  it  will  1)e  a   good  note,  since  it  v.'ould  be   payable 

5G 


CH.   II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.  §     25 

other  instances  may  be  cited,  where  the  contingency  of 
the  event  or  fact  of  payment  destroys  the  negotiability  of 
the  paper. ^  During  the  late  civil  war  of  the  United  States, 
it  became  quite  common  in  the  Southern  States  to  make 
notes  payable  at  a  specified  time  after  peace  was  declared 
between  the  United  States  and  the  Confederate  States. 
The  Confederate  treasury  notes  were  all  made  payable  in 
specie  "  six  months  after  peace,"  and  no  doubt  suggested 
the  propriety  of  using  similar  limitations  of  time  in  private 
notes.  In  consequence  of  the  fact  that  the  declaration  of 
peace  between  the  United  States  and  the  Southern  Confed- 
erate States  would  involve  necessarily  the  successful  estab- 
lishment of  an  independent  government  in  the  Southern 
States,  it  was  held  that  these  notes  were  invalid,  because  it 
was  a  wager  upon  the  success  of  the  Southern  Confederacy ; 
and  further  more  the  success  of  the  Confederac}'  being  un- 
certain, the  promise  to  pay  became  conditional,  and  de- 
prived the  note  of  the  negotiable  character.^  But  in  most 
of  the  cases,  in  which  the  character  of  such  notes  was  con- 
sidered, they  were  construed  to  be  payable  at  a  specified 
time  after  the  cessation  of  hostilities  between  the  two  sec- 
tions of  the  country,  and  not  conditionally  upon  the  success 
of  the  Confederacy.     The    promise  to  pay  being  uncondi- 

absolutely  at  the  time,  when  the  person  would  come  of  age,  if  he  were 
to  continue  in  this  life.    Gross  v.  Nelson,  1  Burr.  226. 

1  "When  J.  S.  shall  marry."  Pearson  v.  Garrett,  4  Mod.  242;  Beards- 
ley  V.  Baldwin  2  Strange,  1151.  "  When  a  particular  sale  or  suit  is  con- 
cluded." Hill?;.  Halford,  2  B.  &  P.  413;  De  Forest  v.  Tracy,  6  Cow.  151 ; 
Shelton  v.  Bruce,  9  Yerg.  24.  When  a  stated  amount  of  money  is  col- 
lected or  certain  dividends  declared.  Corbett  v.  State  of  Georgia,  24  Ga. 
287  ;  Brooks  v.  Hargraves,  21  Mich.  255.  Subject  to  a  certain  contract  or 
policy.  Gushing  v.  Field,  70  Me.  50;  Am.  Exch.  Bk.  v.  Blanchard,  7  Allen, 
332.  But  it  T\'ill  not  make  a  note  non-negotiable  to  have  on  its  face  the 
number  of  the  policy  for  which  it  was  given.  Union  lus.  Co.  v.  Green- 
leaf,  64  Me.  123.  See,  also,  for  similar  cases.  Grant  v.  Wood,  12  Gray 
220;  Husband  v.  Epling,  81  111.  172. 

2  Harris  v.  Lewis,  5  W.  Va.  57G;  McNinch  v.  Ramsey,  G6  N.  C.  229. 

57 


§    2")rt  KKQUISITES    OF    RILLS    AND    NOTES.  [cil.   II. 

tional,  and  on  an  event,  which  was  sure  to  happen,  though 
the  cxat't  time  of  its  happening  was  unknown,  the  notes 
were    dcchired  to    be  nejijotiable.^ 

Although  the  time  of  payment  must  be  certain  and  defi- 
nitely ascertained ;  and  although  probably  a  bill  or  note 
would  be  defective,  if  it  were  made  payable  alternatively 
at  two  different  dates  at  the  same  place;  yet  it  has  been 
held,  and  undoubtedly  on  reasonable  grounds,  that  a  bill  is 
good,  which  is  made  payable  in  New  York,  on  one  day  and 
in  Paris  on  a  subsequent  day.^ 

§  25a.  Payment  on  or  before  a  certain  date.  —  A  bill  or 
note,  particularly  the  latter,  is  often  made  payable  on  or 
before  a  certain  date.  Although  it  has  been  held  in  some 
of  the  States  that  such  a  note  is  not  negotiable,  because  the 
time    of     payment    is    too    indefinite  ;^  yet    the  weight  of 

1  Brewster  v.  "William,  2  S.  C.  455;  Nelson  w.  Manning,  53  Ala.  549; 
Gaines  v.  Dorsett,  18  La  Ann.  5G3;  Mortee  v.  Edwards,  20  La.  Ann.  23G; 
Knight  V.  Eeynolds,  37  Tex.  204;  Atcheson  ^?.  Scott,  51  Tex.  213  (over- 
ruling Thompson  v.  Houston,  31  Tex.  610. 

2  Ilenschel  v.  Mahler,  3  Denio,  428. 

3  '<  Eac"h  of  the  instruments  in  suit  expresses  a  promise  to  pay  a  certain 
sura  of  money  in  a  year  and  a  Lalf  from  its  date,  '  or  sooner  at  the 
option  of  the  mortgager,'  with  interest  at  a  certain  rate  '  during  said 
term.'  The  principal  sum  is  to  be  paid,  either  at  the  time  specified,  or 
at  any  earlier  time  that  the  mortgager  may  elect.  The  interest  is  to  be 
computed  only  until  the  note  is  paid.  Both  the  time  of  payment  of  the 
principal,  and  the  amount  of  the  interest,  are  uncertain,  and  depend  upon 
the  election  of  the  mortgager,  who  would  seem,  from  the  memorandum 
upon  the  note  itself,  to  be  the  maker  of  the  note.  But  if  he  were  a  third 
person,  it  would  not  aid  the  plaintiff.  In  either  alternative,  the  contract, 
not  being  a  promise  to  pay  a  fixed  sum  of  money  at  a  definite  time,  lacks 
the  essential  quality  of  a  negotiable  promissory  note  and  cannot  be  sued 
upon  as  such."  Gray,  Ch.  J.,  in  Stults?>.  Silva,  119  Mass.  139.  See  also 
Way  V.  Smith,  HI  Mass.  523;  Hubbard  v.  Mosely,  11  Gray,  170;  Fralick 
V.  Norton,  2  Mich.  130;  Chouteau  r.  Allen,  70  Mo.  33'J.  In  the  last  case 
it  was  provided  in  corporate  bonds  that  "  the  company  reserve  the  right 
to  pay  the  same  at  any  time  by  adding  to  the  principal  a  sura  equal  to 
twenty  per  cent,  thereof." 

58 


CH.  SI. J       COMPONENT    TAKTS    OF    BILLS    AND    NOTES.        §    25a 

authority  is  decidedly  in  favor  of  conceding  the  negotiable 
character  to  such  notes.  In  a  case,  involving  the  construc- 
tion of  one  of  these  notes,  Cooley,  J.,  said:  "  The  legal 
rights  of  the  holder  are  clear  and  certain;  the  note  is  due 
at  a  time  fixed,  and  it  is  not  due  before.  True,  the  maker 
may  pay  sooner  if  he  shall  choose,  but  this  option,  if 
exercised,  would  be  a  payment  in  advance  of  the  legal  liabil- 
ity to  pay  and  nothing  more.  Notes  like  this  are  common 
in  commercial  transactions,  and  we  are  not  aware  that  their 
negotiability  is  ever  questioned  in  business  dealings.  It 
ought  not  to  be  questioned  for  the  sake  of  any  distinction  that 
does  not  rest  upon  sound  reason."  ^  Notes  are  made  pay- 
able on  or  before  a  certain  date,  at  the  option  of  the  maker, 
for  the  purpose  of  enabling  the  maker  to  save  the  accru- 
ment  of  interest  by  paying  as  soon  before  the  prescribed 
time  of  payment,  as  he  can.  And  when  the  note  contains 
this  provision,  aright  is  reserved  to  the  maker,  the  exercise 
of  which  will  reduce    the  gross  sum  of  money  w-hich   the 

1  Mattisonu.  Marks,  31  Mich.  421.  See,  to  same  effect,  Smith  v.  Ellis, 
29  Me.  422  (payal)Ie  "as  soou  and  as  fast  as  the  money  could  be  col- 
lected; and,  if  not  collected,  in  four  years;")  Stevens  v.  Blount,  7 
Mass.  240  (payable  "by  20th  of  May,  or  when  he  completes  the  building 
according  to  contract;")  Goodloe  v.  Taylor,  3  Hawks,  458  ("  against  the 
19th  of  December,  or  when  the  house  John  Mayfield  has  undertaken  to 
buildfor  me  is  completed";)  Jordan?;.  Tate,  19  Ohio  (x.  s.)  586;  Helmer 
V.  Krolick,  36  Mich,  373;  Gardner  u.  Barger,  4  Ileisk.  669  (payable  in 
nine  months,  "  or  as  A.'s  horse  earns  the  money  in  the  cavalry  service;") 
Ernst  V.  Steckman,  74  Pa.  St.  13  (payable  twelve  months  after  date  or 
sooner  if  made  out  of  a  certain  sale;")  Walker  v.  "Woollen,  54  Ind.  164; 
Woollen  17.  Ulrich,  64  Ind.  120;  Noll  v.  Smith,  G4  Ind.  511;  Cidne  v.  Chid- 
ester,  85  111.  523;  Palmer  v.  Hummer,  10  Kan.  464  (payable  in  sis 
months  or  "as  soon  as  I  can  with  due  diligence  make  the  money  out  of 
said  patent  right.")  In  Cote  v.  Buck,  7  Mete.  588,  the  note  was  payable 
"  as  soou  as  realized"  and  contained  the  further  clause  "to  be  paid  in 
the  coming  season."  Shaw,  Ch.  J.,  held  that  the  note  was  negotiable, 
and  said:  "  Whatever  time  may  be  understood  by  the  '  coming  season,* 
whether  harvest  time  or  the  coming  year,  it  must  come  by  mere  lapse  of 
time,  and  that  must  be  the  ultimate  limit  of  the  time  of  payment." 

59 


§    256  REyULSITES    OF    BILLS    AND    NOTES.  [cil.   II. 

holder  is  to  receive  by  the  amoimt  of  interest  he  has  thus 
saved.  It  would  seem,  therefore,  that  these  notes  would 
be  more  open  to  objection,  because  the  amount  of  money 
was  uncertain,  than  because  the  time  of  payment  is  too 
indefinite.  But  this  ol)jo(.-tion  is  not  suffiricntly  substantial 
to  justify  a  repudiation  of  a  very  useful  kind  of  promissory 
note.^ 


§   25&.   Payment    when  convenient  or  possible.  —  Not 

only  are  notes  held  to  be  negotiable,  which  are  payable  on 
or  before  a  certain  date,  but  the  American  courts,  gener- 
ally, have  with  ver}-  remarkable  liberality  declared  notes  to 
be  negotiable,  which  were  made  payable  "  as  soon  as  con- 
venient "  or  "when  the  maker  is  able,"  and  the  like,  such 
clauses  being  construed  to  mean  "  within  a  reasonable 
time  ; "  and  the  courts  undertake  to  say  what  is  a  reasonable 
time,  by  the  application  of  the  rules  of  construction,  which 
are  used  in  the  construction  of  ordinary  contracts,  contain 
ing  similar  clauses.'-  But  it  has  been  held  by  the  Supreme 
Court  of  the  United  States,  and  by  the  English  courts,  that 
such  notes  are  not  neirotiable,  because  the  lanoruaofe  used 
makes  the  payment  conditional  upon  a  contingency  that 
may  never  happen.^ 


J  See  post,  §  28. 

2  Scars  V.  Wright,  24  Me.  278  (payable  "from  the  avails  of  lops 
bought  of  M.  M  ,  when  there  is  a  sale  made;'')  Crocker  r.  Holmes,  05 
Me.  l'J5  ("when  I  sell  my  place  where  I  now  live;")  Kiucaidr.  Higgins, 
1  Bibb,  390  ("as  soon  as  I  can;")  Works  v.  Hershey.  35  Iowa,  340;  Lewis 
V.  Tipton,  10  Ohio  St.  88;  Bowman  v.  McChesney,  22  Gratt.  609;  Capron  v. 
Caprou,  44  Vt.  412  ("  I  promise  to  pay  J.  S.  or  bearer,  §75  one  year  from 
date,  with  interest  annually,  and  if  there  is  not  enough  realized  by  good 
management  in  one  year,  to  have  more  time  to  pay,  in  llie  manufacture 
of  the  plaster-bed  on  Stearns' land;")  Ubsdell  v.  Cunningham,  22  Mo.  124 
("  to  be  paid  as  soon  as  collected  from  my  accounts  at  P.") 

'  Nunez  v.  Dantel,  19  Wall.  500  ("as  soon  as  the  crop  can  be  sold,  or 
the  money  raised  from  any  other  source;")  Alexander  v  Thomas,  10  Q 
B.  333    ('  payable  ninety  days  after  sight,  or  when  realized.") 

60 


GH.   II.]       CO-AIPOXENT    PARTS    OF    BILLS    AND    NOTES.        §    25(1 

§  25c.  Payment  on  return  of  note.  —  A  note,  payable 
"  on  return  of  this  receipt  or  note,"  has  also  been  held  to- 
be  negotiable,  and  payable,  notwithstanding  the  receipt  is 
not  returned.  In  discussing  the  character  of  such  a  note. 
Church,  C.  J.,  said:  "  It  contains  an  express  promise  to 
pay  Feist  or  order  a  specified  sum  of  money  upon  demand, 
with  interest.  These  are  the  statutory  elements  of  such  a 
(negotiable)  note.^  The  words  'on  the  return  of  this 
receipt,'  do  not  make  it  payable  upon  a  contingency,  or 
constitute  a  condition  precedent  to  any  payment.  *  *  * 
This  restriction  would  be  implied  if  not  expressed ;  it  is 
implied  in  every  promissory  note;  and  there  is  also  an  im- 
plied exception  on  account  of  mistake  or  accident.  *  *  * 
This  clause  is  not  of  the  essence  of  the  contract."^  But 
where  the  phrase  "  payable  on  the  return  of  my  guaranty 
of  a  certain  note,"  is  added  to  a  note,  it  will  destroy  its 
negotiability,  because  it  imposes  a  condition  which  is  not 
implied  by  the  law  of  commercial  paper. ^ 

§  25d.  Payment  in  default  of  installment.  —  It  is,  also, 
somewhat  common,  in  notes  that  are  payable  in  installments, 
to  provide  that  if  the  maker  should  fail  to  pay  any  one  of 
the  installments,  the  whole  sum  shall  become  due  and  pay- 
able. Such  a  note  is  held  to  be  negotiable.*  It  is  also 
sometimes  provided  in  notes,  that  if  any  installment  of  in- 
terest should  not  be  paid,  the  whole  debt,  principal  and  in- 

•    1  1  R.  S.  721,  §  7. 

2  Frank  v.  Wessels,  64  N.  Y.  158;  Smilie  v.  Stevens,  39  Vt.  31G; 
Blood  V.  Northrup,  1  Kan.  291.  But  see  Ilubbard  v.  Mosely,  11  Gray, 
170,  in  which  a  note  was  held  to  be  non-negotiable,  because  there  was  a 
condition  added  that  "  it  shall  be  given  up  to  the  maker  as  soon  as  the 
amount  is  paid  by  the  payee." 

3  Smilie  v.  Stevens,  39  Vt.  316;  Blood  v.  Northrup,  1  Kan.  29. 

^  Carlon  v.  Kenealy,  12  M.  &  W.  139.  See  Miller  v.  Biddle,  13  L.  T.  R. 
334.  But  the  note  must  state  the  times  when  the  installments  are  sever- 
ally payable.     Moffat  v.  Edwards,  Car.  &  M.  16. 

61 


§   2()  RKQuisi:::>  o:''  kills  and  notes.  [cii.  ii. 

terest,  shall  then  become  due  and  payable.  Such  a  note 
would  undoubtedly  be  recognized  as  negotiable,  there  being 
no  difference  in  principle  between  it  and  the  note  which  is 
made  to  fall  duo  upon  the  failure  to  pay  an  installment  of 
the  principal. 

§  2().  Payment  out  of  a  particular  fund. — Tn  conse- 
quence of  the  uncertainty  of  payment  which  would  result 
therefrom,  it  has  invariably  been  held  by  the  courts  that  a 
note  or  bill,  payable  out  of  a  particular  fund,  is  not  nego- 
tiable, for  the  liability  of  the  maker  or  drawer  is  conditional 
upon  there  being  such  a  fund.  There  is  in  such  a  bill  or 
note  no  absolute  obligation  to  pay.^  In  such  a  case  ^ 
D wight,  commissioner,  said:  "  The  present  order,  it  should 
be  observed,  is  payable  out  of  an  uncertain  fund,  from 
profits,  and,  of  course,  none  may  be  realized.     This  fact 

1  Josselyn  v.  Lacier,  10  Mod.  294  (payable  "out  of  any  growing  sub- 
stance ;  ")  Clarke  v.  Percenal,  2  B.  &  Ad.  660 ;  Worden  v.  Dodge,  4  Denio, 
159  (-'out  of  the  net  proceeds  of  certain  ore;  ")  out  of  certain  claims, 
Richardson  v.  Carpenter,  46  N.  Y.  661;  Corbett  v.  State,  24  Ga  287; 
West  V.  Forman,21  Ala.  400;  Hoagland  v.Erck,  11  Neb,  580;  Harrimanr. 
Sanborn,  43  N.  H.  128  ("  being  the  amount  tliat  came  to  you  from  B.  to 
me;  ")  Mills  v.  Kuykendale,  2  Blackf.  47  (out  of  my  part  of  the  estate  of 
X.;)  Kelly  v.  Bronson,  26  Minn.  359  (out  of  avails,  when  received,  on 
«ales  of  logs;)  Pitmanw.  Crawford,  3  Gratt.  127  (on  account  of  brick  work 
done  on  a  certain  building;)  Wadlingtonu.  Covert,  51  Miss.  631;  Corbett  r. 
Clark,  45  Wis.  403  ("  and  take  the  same  out  of  our  share  of  the  grain  ")  ; 
Averett's  Adm'r.  v.  Booker,  15  Gratt.  165  ("  out  of  any  money  in  his 
hands  belonging  to  me  ") .  In  this  case  Lee,  J.,  said :  "  Here,  the  sum  to 
be  paid  is  not  payable  absolutely  and  at  all  events.  It  is  payable  out  of  a 
particular  fund,  to  wit,  the  moneys,  if  any,  in  the  hands  of  the  drawee, 
belonging  to  tlie  drawer.  The  draft,  therefore,  cannot  be  treated  as  a 
bill  of  exchange."  Ehricks  v.  De  Mill,  75  N.  Y.  370  (on  account  of  work 
done  as  per  contract)  ;  Brill  v.  Tuttle,  81 N.  Y.  457  (•'  and  charge  the  same 
to  our  account  for  labor  and  materials,  performed  and  furnished  "),  de- 
cided, however,  to  be  non-negotiable  in  consideration  of  the  other  cir- 
cumstances. 

2  Muuger  v.  Shannon,  61  N.  Y.  258  (and  deduct  the  same  from  any 
share  of  the  profits  of  the  partnership). 

62 


CII.   II.  j       COMPOXENT    PARTS    OF    BILLS    AND    NOTES.  §    26 

deprives  it  of  can  element  essential  in  a  bill  of  exchange, 
which  is  that  it  be  payable  absolutely,  and  not  upon  a  con- 
tingency. *  *  *  J  think  that  the  true  construction  of 
the  present  order  is,  that  it  was  an  equitable  assignment  of 
a  certain  amount  of  the  profits  of  the  business."  For  the 
same  reason,  certificates  or  warrants  of  receivers  of  court 
are  not  negotiable,  their  payment  being  dependent  upon  the 
existence  of  a  fund  at  the  disposal  of  the  court  for  that  pur- 
pose.^ But  when,  in  a  bill  of  exchange,  the  drawer  simply 
indicates,  by  a  reference  to  a  special  fund  or  account,  that 
the  drawee  may  reimburse  himself,  and  does  not  intend  that 
the  payment  of  the  bill  should  be  conditional  upon  the  ex- 
istence or  sufficiency  of  the  fund,  the  bill  will  not  be  de- 
prived of. its  negotiable  character.^  So,  also,  the  insertion 
into  a  bill  or  note  of  memoranda,  explaining  the  nature  of 
the  business  or  debt,  for  which  the  instrument  is  given, 
will  not  make  it  non-negotiable,  for  such  a  memorandum 
does  not  make  the  payment  conditional.^     So,  also,  a  refer- 

1  Turner  v.  P.  &  S.  R.  R.  Co.,  95  I'l.  131;  Union  Trust  Co.  v.  Chicago, 
etc.,  R.  R.  Co.,  7  Fed.  Rep.  513. 

2  Macleod  v.  Snee,  2  Strange,  762;  2  Ld.  Rayra.  1481  (payment  was  di- 
rected "  as  my  quarterly  half -pay,  to  be  due  from  24:th  of  June  to  27th  of 
September  next,  by  advance");  Redman  v.  Adams,  51  Me.  433  ("and 
charge  the  same  against  whatever  amount  may  be  due  for  my  share  of 
fish");  see  Brill  v.  Tnttle,  81  N.  Y.  457;  Ellett  v.  Britton,  6  Tex.  229 
{"  it  will  be  in  full  of  a  certain  judgment").  Martin  v.  Lewis,  30  Gratt. 
672;  Spurgiu  v.  McPheeters,  42  Ind.  527.  It  is  not  essential  to  the  nego- 
tiability of  a  bill  that  it  must  contain  words  indicating  the  account  to 
which  the  amount  called  for  by  the  bill  must  be  charged.  Laing  v.  Bar- 
clay, 1  B.  &C.  392;  2  D.  &  R.  536;  Jarvis  v.  Wilson,  46  Conn.  90.  See 
Corbett  v.  Clark,  45  Wis.  403. 

3  Kirk  V.  Dodge  County  Mut.  Ins.  Co.,  39  Wis.  138  (mem.  that  if 
note  is  not  paid,  whole  of  premium  on  insurance  shall  be  considered, 
and  the  policy  rendered  void)  ;  Heard  v.  Dubuque  Co.  Bank,  8  Neb.  16 
(that  the  title  to  an  article  purchased  shall  not  pass,  until  the  note  given 
for  the  purchase-money  is  paid)  ;  "  secured  by  mortgage;  "  Littlefleld  v. 
Hodge,  6  Mich.  326;  Howey  v.  Eppiuger,  34  Mich.  29;  Roberts  v.  Jacks, 
31  Ark.  597;  Kelley  v.  Whitney,  45  Wis.  110;  Duncan  v.  Louisville,  13 
Bush,  385.     For  some  special  consideration,  Collins  v.  Bradbury,  64  Me. 

63 


§    28  REQUISITES    OF    lilLLS    AND    NOTES.  [Cll.    II. 

ence  to  collateral  securities,  with  the  terms  of  the  deposit 
of  them,  will  not  affect  the  negotiability  of  a  note  or  bill.^ 

§  27.  AVords  of  advice.  —  Sometimes,  but  not  so  fre- 
quently in  this  country,  as  in  England,  a  bill  of  exchange 
is  directed  to  be  paid  "  as  per  advice,"  or  "  without  fur- 
ther advice."  When  the  former  clause  appears,  it  is  an 
intimation  that  the  drawer  has  written  and  sent  a  letter  of 
explanation;  and  if  the  drawee  accepts,  before  receiving 
this  letter  of  advice,  he  does  so  at  his  peril,  in  case  of  any 
alteration  in  the  amount  of  the  bill."''  It  is  very  doubtful 
whether  the  use  of  these  words  of  advice  is  of  any  value  at 
all.  They  cannot  be  permitted  to  make  the  liability  of  the 
drawer  dependent  upon  the  private  mstructions  in  the  let- 
ter of  advice,  for  that  would  destroy  the  negotiability  or 
the, bill.  They  can  only  serve  to  notify  the  drawee  that 
a  letter  of  advice  has  or  has  not  been  sent.  And  this  no- 
tice could  only  be  of  value  when  it  is  not  customary  in  com- 
mercial circles  to  send  letters  of  advice. 

« 

§  28.  Certainty  as  to  the  amount  to  be  paid. — An- 
other essential  to  the  negotiability  of  a  bill  or  note  is,  that  the 
amount  to  be  paid  on  such  paper  must  be  certain  and  stated 
in  the  body  of  the  note  or  bill.  It  is  customary  to  write  the 
sum  of  money  in  full  in  the  body  of  the  commercial  paper, 
and  also  to  express  it  in  figures  in  the  upper  or  lower  left- 

37;  Mottu.  Havana  Nat.  Bk.,  22  Hun  (N.  Y.),  354;  Preston  v.  Whitney, 
23  Mich.  260;  Wright  v.  Irwin,  33  Mich.  32;  Newton  Wagon  Co.  v. 
Dyers,  10  Neb.  284;  Hereth  v.  Meyer,  33  Ind.  511  ("given  in  considera- 
tion of  a  patent-right"). 

1  Wise  V.  Charlton,  4  A.  &  E.  788;  Hassoullier  v.  Harkenck,  7  T.  R. 
733;  Fancourt  v.  Thome,  9  Q.  B.  312;  Towne  v.  Rice,  122  Mass.  67; 
Perry  v.  Bigelow,  128  Mass.  129;  Arnold  v.  Rock  River,  etc.,  R.  R.  Co.,  5 
Duer,  207;  Heerd  v.  Dubuque  Co.  Bank,  8  Neb.  16.  See  Fleckner  v. 
Bank  of  U.  S.,  8  Wheat.  338. 

-'  1  Daniel'.s  Negot.  Inst.,  §  109;  Byles  on  Bills,  (*89)  141;  Story  on 
Bills,  65;   Chitty  on  Bills,  (*162)  187. 

04 


CII.   II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.  §    28 

hand  corner.  But  this  statement  of  the  amount  in  figures 
in  the  corner  is  a  mere  memorandum,  and  is  not  permitted 
to  control  the  construction  of  the  bill  or  note.  Where 
there  is  a  variance  between  the  figures  and  the  written 
words  in  the  body  of  the  paper,  the  written  words  will  in- 
variably determine  the  amount  to  be  paid.^  So  immate- 
rial is  the  marginal  statement  in  figures  of  the  sum  to  be 
paid  that  it  has  been  lawful  for  any  holder  to  change  the 
figures,  so  that  they  may  agree  with  the  written  statement 
of  the  amount  in  the  body  of  the  instrument.^  Where, 
however,  the  statement  of  the  amount  in  words  is  indis- 
tinctly written,  reference  may  be  made  to  the  figures  in  the 
margin  to  explain  the  consequent  obscurity ;  ^  and  it  will 
not  be  necessary,  in  the  absence  of  a  special  statutory  re- 
quirement, that  the  amount  should  be  stated  in  words  in 
the  body  of  the  instrument.*  But  if  the  amount  is  not 
stated  at  all  in  the  body  of  the  bill  or  note,  not  even  in  fig- 
ures, the  instrument  is  held  in  this  country  to  be  fatally 
defective.^ 

The  amount  for  the  payment  of  which  the  bill  or  note 
calls,  must  not  only  be  stated  in  the  body  of  the  instru- 
ment; but  it  must  also  be  certain.  A  bill  or  note  for 
an  indefinite  sum,  although  the  exact  amount  can  be 
ascertained  by  a  reference  to  other  papers  or  accounts,  is 

1  Commonwealth  v.  Emigrant  Ins.  Co.,  98  Mass.  12;  Smith  v.  Smith, 
1  R.  I.  398;  Saunderson  v.  Piper,  5  Bing.  (N.  C.)  425;  Mears  v.  Graham, 
8  Blatchf.    144;  Payne  v.  Clark,  19  Mo.  152;  Riley  v.  Dickens,  19  111.  30. 

2  "We  do  not  think  the  marginal  notation  constitutes  any  part  of  the 
bill.  It  is  simply  a  memorandum  or  abridgment  of  the  contents  of  the 
bill  for  the  convenience  of  reference.  The  contract  is  perfect  without  it. 
If  this  is  so,  any  alteration  in  the  figures  cannot  avoid  the  contract,  be- 
cause it  is  no  alteration,  either  material  or  immaterial,  in  the  contract." 
Smith  V.  Smith,  1  R.  I.  398. 

3  Riley  v.  Dickens,  19  111.  29 ;   Corgan  v.  Frew,  39  111.  31. 

*  Sweetzer  v.  French,  13  Met.  262;  Petty  v.  Flfeispel,  31  Tex.  169. 
■■*  Norwich  Bank   v.  Hyde,  13  Conn.    279.     But  see  §  35,  in    respect 
to  the  authority  to  fill  up  blanks. 

5  65 


§    2Sa  REQUISITES    OF    KILLS    AND    NOTES.  [Cll.   II. 

not  negotiable.^  But  where  the  uncertainty  or  indefinite- 
ness  of  the  amount  can  be  cured  by  a  reference  to  some 
other  part  of  the  note,  its  back  or  its  face,  the  paper  will 
be  treated  as  negotiable.  An  instrument  has  thus  been 
held  to  be  negotijible,  which  promised  to  pay  a  certain  sum 
per  acre  for  as  many  acres  as  a  given  tract  contained,  when 
the  number  of  the  acres  was  indorsed  upon  it.^ 

§  28a.  Payable  with  exchange. — Quite  frequently 
the  paper  is  made  payable  "with  current  exchange"  on 
some  other  place  than  the  place  of  payment.  Since  New 
York  is  the  money  center  of  this  country,  merchants  fre- 
quently stipulate  in  their  bills  and  notes  for  current  ex- 
change on  New  York.  Although  there  are  cases  which 
hold  that  the  addition  of  words  calling  for  the  payment 
of  the  current  exchange  on  another  place,  will  destroy  the 
negotiable  character  of  the  bill  or  note,  the  weight  of 
authority  supports  the  negotiability  of  such  an  instrument, 
on  the  ground  that  the  current  exchange  is  common  com- 
mercial  information,  and  the  exact  amount  to  be  paid  '*  with 
exchange  "  may  be  easily  ascertained  by  any  holder  of  the 
bill  on  the  day  of  payment.*     It  is  true  that  a  strict,  techni- 

1  Smith  V.  Nightingale,  2  Stark.  375  (obligation  to  pay  a  specific 
amount  "and all  other  suras  which  may  be  clue  "^  ;  Bolton  v.  Dugdale, 
4  B.  iSb  Ad.  619;  Jones  v.  Simpson,  2  B.  &  C,  318  (  "  the  proceeds  of  a 
shipment  of  goods,  value  about  £2,000,  consigned  by  me  to  you")  ; 
€lark  v.  Percival,  2  B.  &  Ad.  6  60;  Marset  v.  Equitable  Ins.  Co.  660 
("  8800  and  such  additional  premium  as  may  be  due  on  "  certain  policy) ; 
Legro  V.  Staples,  16  Me.  252;  Lime  Rock  F.  &  M.  Ins.  Co.  v.  Hewitt,  60 
Me.  407;  Cashman  v.  Haynes,  20  Pick.  132  Q  "  deducting  all  advances  and 
expenses  "  ) ;  Gaar  ;;.  Louisville  B.  Co.,  11  Bush,  180. 

2  Smith  V.  Clopton,  4  Tex.  109. 

3  Read  v.  McNulty,  12  Rich.  445;  Russell  v.  Russell,  1  McArthur,  263, 
Low  V.  Bliss,  24  111.  1G8;  Phila.  Bank  i'.  Newkirk,  2  Miles,  442.  It  is  lield 
iu  Illinois  in  later  cases  that  when  such  words  are  added  to  a  bill  oi 
note,  made  payable  where  it  is  drawn,  they  may  be  treated  as  mere  sur- 
plusage     Hill  I'.  Todd,  29  111.  103;   Clauser  v.  Stone,  29  111.  116. 

*  Pollard  V.  Herries,  3  B.  &  P.  335;  Grutacup  v.  Woulloise,  2  McLean, 


CH.  II.]        COMPONENT    PARTS    OF    BILLS    AND    NOTES.       §    28a 

cal  application  of  the  general  rule,  laid  down  in  the  preced 
ing  section,  would  require  the  courts  to  deny  that  bills  and 
notes  are  negotiable,  which  are  payable  "with  current 
exchange,"  for  the  reason  that  the  rule  requires  the  exact 
sum  to  be  ascertained  from  facts  stated  in  the  body  of 
the  instrument.^  But  the  reason  of  the  general  rule  was  to 
enable  the  holder  or  any  one  else,  to  ascertain  the  exact 
amount,  not  necessarily  by  facts  stated  within  the  body  of 
the  paper ;  but  without  investigating  facts  which  were  not 
within  the  general  knowledge  of  every  one,  and  which  may 
be  more  or  less  subject  to  the  influence  or  control  of  the 
maker  or  of  the  drawer  or  drawee.  The  rate  of  exchange 
between  two  places  is  determined  by  the  relative  demand 
for  money  in  those  places,  and  it  can  be  ascertained  by  any 
one,  desiring  to  know,  by  inquiring  in  banking  circles. 
The  practical  effect  of  a  bill  or  note,  payable  in  one  place 
with  current  exchange  on  another  place,  is  the  same  at  least 
as  to  the  definiteness  of  the  sum,  as  a  note  or  bill,  drawn  in 
one  place  and  payable  in  another  place.  For,  in  the  latter 
case,  the  maker  or  drawee,  must  pay  the  full  sum  men- 
tioned in  the  latter  place ;  and  therefore  he  pays  the  cur- 
rent exchange.  In  both  cases,  the  expense  of  securing 
money  in  the  latter  place  falls  on  the  maker  or  drawee,  and 
the  only  difference  between  the  two  cases  is  that  in  the 
former  case  the  maker  or  drawee  is  only  obliged,  in  making 
payment  in  one  place,  to  pay  the  expense  of  transferring 
it  to  another  place,  instead  of  having  to  actually  make  pay- 

581 ;  Price  v.  Teal,  4  McLean,  201 ;  Smith  v.  Kendall,  9  Mich.  241 ;  John- 
son V.  Trisbie,  15  Mich.  286;  Bullocli  v.  Taylor,  39  Mich.  137;  Leggett  y. 
Joues,  10  Wis.  35;  First  Nat.  Bank  v.  Dubuque  S.  R.  R.  Co.,  52  Iowa, 
378:  Bradley  v.  Lill,  4  Biss.  473.  See  Nash  v.  Gibbon,  4  All.  N.  B.  479; 
Cazet  V.  Kirk,  4  All.  N.  B.  543;  Palmer  v.  Fahnestock,  9  Up.  Can.  C.  P. 
172;  Saxton  v.  Stevenson,  23  Up.  Can.  C.  P.  503. 

1  In  Leggett  v.  Jones,  10  Wis.  35,  it  was  conceded  that  the  recogni- 
tion of  the  negotiability  of  such  an  instrument  was  "a  slight  modifica- 
tion of  the  general  rule." 

67 


§    2i>b  REQUISITES    OF    BILLS    AND    NOTES.  [CH.   II. 

ment  in  the  latter  place.  It  would  seem  that  whatever  un- 
certainty as  to  the  amount  to  be  paid  did  exist  in  such  a  bill 
or  note,  it  would  not  be  sufficient  to  affect  the  rights  of  the 
parties  to  any  material  degree.^ 

§  286.  Stipulations  to  pay  costs  for  collection.  —  Bills 
and  notes,  particularly  the  latter,  sometimes  contain  stipu- 
lations that,  if  not  paid  voluntarily,  the  drawer  or  maker 
will  pay  the  attorney's  and  collection  fees.  It  has  been 
much  discussed  what  is  the  effect  of  such  a  stipulation 
upon  the  legal  character  of  the  instruments,  to  which 
they  are  added.  A  few  decisions  maintain  that  the 
stipulation  is  in  the  nature  of  an  usurious  charge,  and 
avoids   the  whole  transaction   under   the  laws  prohibiting 

1  "  A  note  is  payable  in  lawful  money  of  the  United  States,  which  is  at 
par  in  every  portion  of  the  country.  If  a  note  is  made  payable  in  Mil- 
waukee with  exchange  on  New  York,  it  requires  precisely  the  same  sum 
of  money  to  pay  it  as  would  be  required  had  it  been  made  payable  in  New 
York.  The  exchange  is  the  cost  of  drawing  a  bill  and  transmitting  the 
money  to  New  York  to  meet  it.  In  Leggett  v.  Jones,  the  note  was  pay- 
able afthe  Dodge  County  Bank  with  exchange  on  New  York.  Had  the 
note  been  made  payable  in  New  York,  no  one  would  claim  that  there  was 
any  uncertainty  in  the  amount,  although  the  maker  would  necessarily  have 
been  subjected  to  the  expense,  uncertain  in  amount,  of  providing  funds 
thereto  meet  it.  It  is  precisely  that  expense  which  constitutes  and  gov- 
erns the  cost  of  exchange.  Hence,  the  same  sum  of  money  which  would 
have  been  required  to  pay  the  note  in  New  York,  would  have  paid  it  at 
the  Dodge  County  bank,  including  the  exchange,  according  to  its  terras. 
In  speaking  of  the  cost  of  exchange,  we  refer  only  to  transactions  in 
money.  Nominally,  the  cost  of  exchange  may  include  the  discount  on 
the  ordinary  currency  of  the  place  where  the  bill  is  drawn,  at  the 
place  of  payment,  and  such  discount  may  greatly  fluctuate.  But  a 
note  payable  with  exchange  is  not  affected  by  those  facts,  for  it  can- 
not be  payable  in  anything  but  money  (unless  by  virtue  of  some  special 
statutory  provision)  and  still  be  a  note.  There  can  be  no  discount 
on  money  to  affect  the  cost  of  inland  exchange.  Hence,  it  may  well 
be  said,  that  the  uncertainty  in  the  amount  due  on  a  note  which  stip- 
ulates for  the  payment  of  exchange  between  two  points,  is  rather  ap- 
parent than  real  and  substantial."  Lyon,  J.,  in  Morgan  v.  Edwards, 
53  Wis.  599  (40  Am.  Rep.  781). 
08 


CH.  II. J       COMPONENT    PARTS    OF    BILLS    AND    NOTES.         §    286 

usury. ^  Other  decisions  liold  the  stipulation  to  be  void,  us 
against  public  policy,  because  it  is  in  the  nature  of  a  penalty, 
and  tends  to  the  oppression  of  impecunious  debtors.  But 
the  avoidance  of  the  stipulation  on  such  grounds  enables  the 
courts  to  treat  the  stipulation  as  mere  surplusage,  and  hold 
the  instrument  to  be  negotiable  notwithstanding.^  In  a  large 
number  of  cases,  the  stipulation  is  held  to  be  valid;  but, 
because  it  renders  the  gross  sum  to  be  recovered  on  the  in- 
strument uncertain,  its  insertion  in  a  bill  or  note  is  declared 
to  destroy  its  negotiability;  '^  but  there  are  also  other  cases, 
which  not  only  recognize  the  validity  of  the  stipulation, 
but  also  the  negotiability  of  the  paper,  in  which  it  appears.* 

1  State  V.  Taylor,  10  Ohio,  378;  Sheltoa  v.  Gill,  11  Ohio,  417;  Dow  v. 
Updike,  11  Neb.  95. 

-'  Meyer  v.  Hart,  40  Mich.  517;  Bullock  v.  Taylor,  39  Mich.  138;  Gaar 
V.  Louisville  Banking  Co.,  11  Bush,  182;  Withei'spoou  v.  Musselman,  14 
Bush,  814.     See  Kemp  v.  Claus,  8  Neb.  24. 

3  Sweeney  v.  Thickstun,  77  Pa.  St.  131;  Woods  v.  North,  84  Pa.  St. 
410;  Johnston  v.  Speer,  92  Pa.  St.  227;  First  Nat.  Bk.  v.  Bynum,  84  N. 
C.  24;  First  Nat.  Bk.  v.  Gay,  63  Mo.  33;  Samstag  v.  Conley,  64  Mo.  477; 
First  Nat.  Bk.  v.  Marlow,  71  Mo.  618;  Storr  v.  Wakefield,  71  Mo.  622; 
First  Nat.  Bk.  v.  Gay,  71  Mo.  627;  Morgan  v.  Edwards,  53  Wis.  .599; 
Jones  V.  Eaditz,  27  Minn.  240.  "  It  is  a  necessary  quality  of  negotiable 
paper,  that  it  should  be  simple,  certain,  unconditional,  and  not  subject 
to  any  contingency  *  *  *  Interest  and  (Josts  of  protest  at  non-pay- 
ment at  maturity  are  necessary  legal  incidents  of  the  couti-act,  and  the 
insertion  of  them  in  the  body  of  the  no  e  would  not  alter  its  negotiabil- 
ity. Neither  does  a  clause  waiving  exemption,  for  that  in  no  way  touches 
the  simplicity  and  certainty  of  the  paper.  But  a  collateral  agreement  as 
here  ('  and  five  per  cent  collection  fees  if  not  paid  when  due  '),  depend- 
ing too,  as  it  does,  upon  its  reasonableness,  to  be  determined  by  the 
verdict  of  a  jury,  is  entirely  different."  Sharswood,  J.,  in  Woods  v. 
North,  supra. 

4  Dietrich  v.  Baylie,  23  La.  Ann.  767;  Overton  v.  Matthews,  35  Ark. 
147;  Smith  v.  Muncie  Nat.  Bk.,  29  Ind.  159;  First  Nat.  Bk.  v.  Canatsey, 
34  Ind.  149;  Johnson  v.  Crossland,  34  Ind.  344;  Smith  v.  St.  Silvers,  32 
Ind.  321;  Wyant  v.  PorttorfE,  37  Ind.  512;  Hubbard  v.  Harrison,  38  Ind. 
325;  Walker  v.  Woollen,  54  Ind.  164;  Sperry  v.  Horr,  32  Iowa,  184;  Sea- 
ton  V.  Scoville,  18  Kan.  435;  Howestein  v.  Barnes,  U.  S.  C.  C.  Kansas, 
29  Am.  Rep.  406;  s.  c.  5  Dillon  482;  Heard  r.  Dubuque  Bank,  8  Neb. 
10;  Farmers'  Nat.  Bk.  v.  Rasraussen,  1  Dakota,  60;  AVilsou  Sewing  Ma- 

69 


§    286  REQUISITES    OF    BILLS    AND    NOTES.  [CII.    II. 

Where  the  auioimt,  to  be  recovered  as  attorney's  fees,  is 
explicitly  stated  in  the  instrument,^  it  would  seem  that  the 

chine  Co.  v.  Morcuo,  U.  S.  C.  C.  Oregon,  29  Am.  Rep.  40G;  s.  c.  7  Foil. 
Rep.  806.  In  Stouemau  v.  Pyle,  35  lud.  103,  the  court,  through  Worckii, 
J.,  expUxined  fully  the  grounds  upon  "which  the  negotiability  of  such  in- 
struments may  be  sustained,  as  follows:  "As  the  note  was  payable  at  a 
banli  in  this  State,  it  is  governed  by  the  law  merchant,  and  the  liohhT 
thereof  is  entitled  to  all  the  rights  of  a  holder  of  commercial  pai)er, 
unless  the  clause  in  the  note  stipulating  for  tlie  payment  of  attorney's 
fees,  in  case  suit  should  be  commenced  thereon,  takes  it  out  of  that 
class  of  paper.  It  is  earnestly  urged  by  counsel  for  the  appellee, 

that  the  provision  above  indicated  makes  the  amount  of  the  note  uncer- 
tain, and  therefore  that  it  does  not  come  within  the  legal  requirements 
of  commercial  paper.  It  may  be  conceded  that  a  note,  in  order  to  be 
placed  upon  the  footing  of  bills  of  exchange,  must  be  for  a  sum  certain; 
for  in  no  other  way  can  the  maker  know  precisely  what  he  is  bound  to 
pay,  or  the  holder  what  he  is  entitled  to  demand.  But  the  note  in  ques- 
tion, if  paid  at  maturity,  or  after  maturity  before  suit  is  brouglit 
thereon,  is  for  a  sum  certain.  On  the  maturity  of  the  note  the  maker 
knew  precisely  what  he  was  bound  to  pay,  and  the  holder  what  he  was 
entitled  to  demand.  In  the  commercial  world,  commercial  paper  is  ex- 
pected to  be  paid  promptly  at  maturity.  The  stipulation  for  the  payment 
of  attorney's  fees  could  have  no  force,  except  upon  a  violation  of  his 
contract  by  the  defendant.  Had  the  defendant  kept  his  contract  and  paid 
the  note  at  maturity,  or  afterwards,  but  before  suit,  he  would  have  been 
required  to  pay  no  attorney's  fees,  nor  would  there  have  been  any  diffi- 
culty as  to  the  extent  of  his  obligation.  We  see  no  reason,  on  principle 
or  authority,  or  on  grounds  of  public  policy,  for  holding  that  such  a 
stipulation  destroys  the  commercial  character  of  paper  otherwise  having 
that  character."  In  Indiana,  it  is-now  provided  by  statute,  1  Rev.  Stat. 
(187C),  p.  149,  "that  any  and  all  agreements  to  pay  attorney's  fees,  de- 
pending upon  any  condition  therein  set  forth,  and  made  part  of  any  bill  of 
exchange,  acceptance,  draft,  promissory  note,  or  other  written  evidence 
of  indebtedness,  are  hereby  declared  illegal  and  void,  provided  that 
nothing  in  this  section  shall  be  construed  as  applying  to  contracts  made 
previous  to  the  taking  effect  of  this  act."  Under  this  act,  it  was  held 
that  a  stipulation  was  void,  which  provided  for  the  payment  of  attorney's 
fees  "if  suit  be  brouglit."  Churchman  v.  Martin,  54  Ind.  380.  But  if 
the  stipulation  is  made  unconditional,  it  will  not  come  within  the  opera- 
tion of  the  statute,  and  is  therefore  valid.  Brown  v.  Barber,  59  Ind.  5.33; 
Smock  V.  Ripley,  62  Ind.  81.  See  Garver  v.  Pontius,  G6  Ind.  191;  Max- 
well V.  Morehart,  66  Ind.  301. 

1  See  Sperry  v.  Hunt,  32  Iowa,  184;  Overton  v.  Mathews.  35  Ark.  147; 
70 


CH.  II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.  §    29 

sum  of  money,  to  be  recovered  on  the  paper,  with  the  at- 
torney's fees  added  to  the  principal  and  interest,  would  be 
as  certain  as  the  principal  and  interest  would  be  alone. 
For  the  interest  continues  to  accumulate,  if  the  paper  is 
not  honored  at  maturity.^  When  the  exact  amount  of  the 
fees  is  not  stated,  only  reasonable  fees  can  be  recovered, 
and  there  may  be  some  ground  for  objecting  to  the  negotia- 
bility of  such  an  instrument.  But  it  would  seem  that  even 
such  an  instrument  ought  to  be  held  to  be  negotiable,  for 
the  stipulation  for  reasonable  attorney's  fees  renders  the 
amount  no  more  uncertain  than  the  addition  by  the  law 
merchant  to  the  principal  sum  of  the  costs  of  protest,  and 
the  taxed  costs  of  the  suit.  The  Only  difference  between 
the  two  addenda  is  that  the  attorney's  fees  are  not  yet  cus- 
tomarily demanded,  and  hence  must  be  expressly  stipulated 
for;  while  the  payment  of  costs  of  protest  is  a  custom, 
grown  into  a  requirement  of  the  law.  The  stipulation  for 
attorney's  fees  is  only  a  more  youthful  provision. 

§  29.  Payment  in  money  only. —  It  is  also  a  requisite 
of  negotiability,  that  the  instrument  should  call  only  for 
the  payment  of  money.  If  the  paper  should  provide  for 
the  payment  of  money  or  the  doing  or  buying  of  something 
else  in  liquidation  of  the  indebtedness,  it  is  deprived  of  the 
character  of  negotiability,  and  becomes  an  ordinary  con- 
tract or  order .^     Money  is  defined,  generally,  to  have  been 

Dietrich  v.  Baylie,  23  La.  Ann.  767;  Farmers'  Nat.  Bank  v.  Rasmusseu, 
1  Dakota,  60. 

1  But  see,  contra,  Wood  v.  North,  84  Pa.  St.  410;  First  Nat.  Bk.  v. 
Gay,  63  Mo.  33;  Sweeney  v.  Thickstim,  77  Pa.  St.  131. 

2  "Foreign  hills,"  Jones  v.  Fales,  4  Mass.  245;  Young  v.  Adams,  6 
Mass.  182;  promise  to  pay  $1,000  or  upon  surrender  of  note  to  issue  stock, 
etc.,  Hodges  v.  Shuler,  22  N.  Y.  114 ;  *'  in  good  merchantable  whisky  at  trade 
price,''''  Rhodes  v.  Lindley,  Oliio  Cond.  465;  in  work,  Quiuby  v.  Meri'itt,  11 
Humph.  439;  payable  in  money  or  in  goods  on  demand,  Hosstater  w. 
Wilson,  36  Barb. ;  "  m  ginned  cotton  at  eight  cents  per  pound,"  Lawi'euce 
V.  Dougherty,  5  Yerg.  435.     See  to  same  effect  Matthews  v.  Hougliton, 

71 


§    L'Drt  REQUISITES    OF    BILLS    AND    NOTES.  [CII.   II. 

originally,  the  synonym  of  coin;  pieces  of  metul  stamped 
by  public  authority,  and  used  as  the  medium  of  commerce 
(Webster).  But  when  government  notes  and  other  paper 
currency  came  into  use,  and  were  declared  by  law  to  be 
legal  tender  in  payment  of  all  debts,  public  and  private,^ 
its  legitimate  derivative  meaning  would  include  all  species 
of  legal  tender.  The  term  "  currency  "  is  a  more  compre- 
hensive term,  and  includes  not  only  legal  tender  or  money, 
but  everj'thing  else  which  is  in  circulation  or  is  given  and 
taken  as  having  value,  or  as  representing  property.  For 
example,  national  bank-notes  would  be  currency,  but  not 
money,  because  they  are  not  legal  tender;  although  in  the 
popular  mind,  this  distinction  is  not  recognized  or  under- 
stood, the  terms  "  money  "  and  **  currency  "  being  treated 
as  synonymous. 

§   29rt.    Payable    in   bank-bills    or    currency.  —  It    has 

become  quite  common  to  make  commercial  paper  payable  in 
bank-bills,  in  current  funds,  in  currency  and  the  like ;  and 
it  is  very  difficult  to  determine  whether  such  paper  should  be 
considered  negotiable.  Since  Conoress  has  declared  the 
United  States  treasury  notes  to  be  legal  tender,  the  claim  is 
made  that  when  the  paper  is  payable  "  in  currency,"  "  in 
current  funds,"  etc.,  the  parties  meant  the  legal  tender  of 
the  country. 2  But  this  would  seem  to  be  a  violent  pre- 
sumption, and  not  at  all    supported  by  the  history  of  the 

2  Fairf.  377;  Dixou  v.  Bovill,  3  Macq.  H.  L.  1;  Averbach  v.  Pltchett,  58 
Ala.  451. 

1  As  to  the  power  to  declare  such  notes  legal  tender  in  the  United 
States,   see  Tiedeman's   Limitations  of  Police  Power,  §  90. 

2  The  objection  that  the  instrument  is  not  a  promissory  note  because 
payable  in  paper  currency,  is  answered  by  the  suggestion  that  this  must 
be  taken  to  refer  to  the  legal  tender  paper  currency,  which  under  the 
United  States  laws  and  decisions  is  money."  Church,  Ch.  J.,  in  Frank 
r.  Wessels,  G4  N.  Y.  158.  See,  to  same  effect.  Burton  v.  Brooks,  25 
Ark.  215.     See  also  Fryr.  Dudley,  20  La.  Ann.  368. 

72 


CH.  II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.         §    29rt 

question;  for,  if  no  other  currency  but  legal  tender  was 
intended,  the  express  stipulation  was  useless  and  served  no 
purpose,  since  commercial  paper  is  payable  in  legal  tender 
independently  of  any  express  provision.^  It  may  be  per- 
missible to  show  by  parol  evidence  that  the  word  "  cur- 
rency "  was  used  in  the  sense  of  "  money;"  ^  but  in  the 
absence  of  such  evidence,  it  is  hardly  proper  for  a  court  to 
declare  them  synonymous,  especially  when  it  is  known, 
that  the  confusion  between  the  terms  has  arisen  out  of  the 
state  bank-note  circulation,  that  was  so  common  in  this 
country  fifty  years  ago.  At  all  events,  this  reasoning 
would  furnish  no  justification  for  the  conclusions  of  some 
of  the  courts  that  a  bill  or  note  was  negotiable,  which  was 
payable  in  bank-notes. 

It  has  also  been  frequently  held,  with  much  greater 
show  of  reason,  that  instruments  are  nevertheless  neg-o- 
tiable,  although  they  are  expressed  to  be  payable  "in 
current  money,"  "  in  good  current  money  "  and  the  like, 
it  being  presumed  that  nothing  but  legal  tender  was 
intended.^  And  it  is  not  objectionable  to  the  character 
of  commercial  paper,  that  it  is  payable  in  some  special  kind 
of  legal  tender,  as  for  example  "  in  gold  coin."*     In  En- 

1  "It  is  evident  that  it  was  not  intended  that  payment  should  be  made 
in  coin  or  '  legal  tender '  government  notes.  The  holder  of  the  paper 
could  have  demanded  payment  thereon  in  '  legal  tender '  money  without 
any  words  in  the  instrument  indicating  the  currency  in  which  payment 
should  be  made.  *  *  *  Some  other  medium  of  circulation  is  described 
by  the  word  currency."     Beck,  J.,  in  Huse  v.  Hamblin,  29  Iowa,  244. 

2  Haddock  v.  Woods,  46  Iowa,  435;  Pilmer  v.  Branch  Bk.,  16  Iowa, 
321;  Huseu.  Hamblin,  29  Iowa,  501. 

^  "In  lawful  current  money  of  Pennsylvania,''''  Wharton  v.  Morris,  1 
Dall.  124;  "in  good  current  money  of  this  Slate,''^  Graham  v.  Adams,  5 
Ark.  261;  "Arkansas  money,''''  Wilburn  v.  Greer,  6  Ark.  255;  "  Tennessee 
money, ''^  Searcy  v.  Vance,  Mart.  &  Y.  225;  Black  v.  Ward,  27  Mich.  173; 
"  current  money  of  Alabama,'''  Carter  v.  Penn,  4  Ala.  140;  but  otherwise, 
if  payable  "in  Arkansas  money  of  the  Fay etteville  branch,'"  Hawkins  v. 
Watkius,  5  Ark.  481. 

•*  Chrysler  v.  Pendis,  42  N.  Y.  209. 

73 


§     'Ida  UKQUISITES    OF    KILLS    AND    \OTES,  [CH.  II 

gltiiul,  commercial  paper  payable  in  notes  of  the  bank  of 
England,  is  held  to  be  non-negotiable,^  and  in  many  of  the 
American  courts,  instruments  payable  in  any  other  cur- 
rency than  legal  tender  have  been  denied  the  negotiable 
character. 2  But  in  very  many  other  cases  such  instruments 
have  been  declared  to  be  negotiable.'* 

1  Rex  V.  Wilcox,  Baylcy  ou  Bills,  11;  ex  parte  Imeson,  2  Rose,  225. 
It  seems  that  the  oi)iuiou  of  the  English  courts  was  not  affected  by  the 
fact  that  these  bank-notes  were  by  act  of  Parliament  made  legal  tender. 
Rex  V.  Wilcox,  supra;  1  Daniel's  Negot.  Inst.,  §  57;  1  Ames  on  B.  &,  N. 
39.  The  same  position  is  taken  by  the  Canada  courts,  in  respect  to  Can- 
ada bills,  which  are  legal  tender  under  Stat.  29  &  30  Vict.,  ch.  10.  Gray 
V.  Wordeu,  29  Up.  Can.  Q.  B.  R.  535. 

^  "  Office  Jiotes"  of  a  bank,  Irvine  v.  Lowry,  14  Pet.  293;  "  in  current 
bills,''  Collins  V.  Lincoln,  11  Vt.  2G8;  Ford  v.  Mitchell,  15  Wis.  304;  "in 
current  bank-bills  or  notes,"  McCormick  v.  Trotter,  10  Serg.  &  R.  94; 
Fry  V.  Rousseau,  3  McLean,  106;  Gamble  v.  Hatton,  Peck,  130;  Kirk- 
patrick  v.  McCuUough,  3  Humph.  171 ;  Whiteman  v.  Childress,  6  Humph. 
303;  Simpson  v.  Moulders,  3  Caldw.  429;  McDonnell  t;.  Keller,  4  Caldw. 
258;  Little  v.  Phoenix  Bk.,  2  Hill,  425;  Gray  u.  Donahue,  4  Watts,  400; 
''in  currency,''  Rindskoff  v.  Barrett,  11  Iowa,  172;  Farwellv.  Kennett,  7 
Mo.  595;  Lamptou  v.  Haggard,  3  Monr.  149;  Mobile  Bank  v.  Brown,  42 
Ala.  108;  •'  in  common  currency  of  Arkansas,"  Dillard  v.  Evans,  4  Ark. 
185;  '^n  current  funds,"  Johnsons.  Henderson,  76  N.  C.  227;  CornweU 
V.  Humphrey,  9  Ind.  135;  Lafayette  Bank  v.  Ringel,  51  Ind,  393;  Had- 
dock V.  Woods,  46  Iowa,  433;  Piatt  v.  Sauk  Co.  Bk.,  17  Wis.  222;  Lind- 
sey  V.  McClelland,  18  Wis.  481 ;  "  in  current  funds  of  Fittshurgh,"  Wright 
V.  Hart,  44  Pa.  St.  454;  "in  current  bank  paper,"  Campbell  v.  Weister, 
1  Litt.  30;  "  in  paper  medium,"  Lange  v.  Kohne,  1  McCord,  115;  "t)i  cur- 
rent notes  of  the  State  of  North  Carolina,"  Warren  v.  Brown,  64  N.  C.  381 ; 
"ire  Pennsylvania  or  New  York  paper  currency,"  Lieber  v.  Goodrich,  5 
Cow.  186;  "m  notes  receivable  in  bank,"  Breckenridge  v.  Ralls,  4  Mon.^ 
533. 

'  "  In  funds  current "  or  current  in  place  of  payment,  Shoemakers' 
Bk.  V.  Street,  16  Ohio  St.  5;  White  v.  Richmond,  16  Ohio,  5;  Lacy  v. 
Holbrook,  4  Ala.  88;  in  bank-notes,  Judah  v.  Harris,  19  Johns.  144;  De- 
berry  V.  Darnell,  5  Yerg.  4,51;  Pardee  v.  Fish,  60  N.  Y.  265;  Morris  v. 
Edwards,  1  Ohio,  80;  Swetlaud  v.  Creigh,  15  Ohio,  118;  Fleming  v.  Nail, 
1  Texas,  246;  "m  cun-ency,"  Drake  v.  Markle,  21  Ind.  433;  Ehle  v.  Chit- 
tenangoBk.,  24  N.  Y.  548;  Howe  v.  Hartness,  11  Ohio  St.  449;  Peru  i'. 
Farnsworth,  18  HI.  563;  Laughlin  v.  Marshall,  19  111.  390;  Swift  v.. 
Whitney,  20  111.  144;  Hunt  v.  Divine,  37  111.  137;  Cockrell  v.  Kirkpatrick, 

74 


CH.  II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.        §    296 

§  296.  Payable  in  foreign  money.  — It  is  not  necessary 
that  the  note  or  bill  be  payable  in  the  money  of  the  place 
where  the  instrument  was  executed  or  is  to  be  paid.  It 
may  be  payable  in  the  money  of  any  known  nation,  the 
only  requirement  being  that  the  particular  denomination  of 
the  foreign  money  which  the  parties  contemplate  should  be 
stated  in  the  body  of  the  instrument  so  that  it  may  be  as- 
certained at  once  by  a  perusal  of  the  instrument  what  is 
the  equivalent  value.  In  New  York,  a  note  was  held  to  be 
non-negotiable,  which  was  given  for  a  certain  sum  in  dol- 
lars and  cents  "  payable  in  Canada  money."  The  court 
held  that  the  sum  to  be  paid  should  be  expressed  in 
the  denomination  of  the  foreign  money,  instead  of  in 
the  native  denomination  and  declared  to  be  payable  in 
the  foreign  money.  The  court  proceeded  to  say  further: 
"  This  view  of  the  case  is  not  incompatible  with  a  bill 
or  note  payable  in  money  of  a  foreign  denomination,  or 
any  other  denomination,  being  negotiable,  for  it  can  be 
paid  in  our  coin  of  equivalent  value,  to  which  it  is  always 
reduced  by  a  recovery.  A  note  payable  in  pounds, 
shillings  and  pence,  made  in  any  country,  is  but  another 
mode  of  expressing  the  amount  in  dollars  and  cents, 
and  is  so  understood  judicially.  The  course,  therefore,  in 
an  action  on  such  an  instrument,  is  to  aver  and  prove  the 
value  of  the  sum  expressed,  in  our  own  tenderable  coin.^ 
The  main  point  in  the  New  York  case  is  that,  while  the 
amount  of  the  note  or  bill  may  be  expressed  in  the  foreign 
denomination,  the  paper  will  cease  to  be  negotiable,  if  the 
maker  or  drawee  is  required  to  pay  in  the  foreign  denomi- 
nation, instead  of   tendering  the    same  sum  in  the    native 

9  Mo.  688;  Mitchell  v.  Hewitt,  5  Sraed.  &  M.  361;  Fry  v.  Dudley,  20  La. 
Ann.  368;  Butler  ti.  Paine,  8  Minn.  324;  Klauber  t?.  Biggerstaff,  47  Wis, 
551;  Phelps  v.  Town,  14  Mich.  374;  "i)i  Hew  York  State  bills  or  specie,^* 
Keith  V.  Jones,  9  Johns.  120. 

1  Thompson  v.  Sloan,  23  Wend.  71.  See  Sanger  v.  Simpson,  8  Mass. 
260. 

75 


§    296  REQUIfSITES    OF    lilLLS    AND    NOTES.  [CH.   II. 

denomination.  But  where  the  denominations  of  two  coun- 
tries have  the  same  names  but  different  values,  —  as  was 
the  case  with  the  money  of  Canada  and  of  the  United 
States  after  the  American  civil  war,  when  the  paper  money 
of  the  latter  was  depreciated  in  value  below  the  gold  stand- 
ard; —  it  will  not  affect  the  negotiability  of  an  instrument 
if  it  is  expressed  to  be  payable  "  in  Canada  currency"  or 
"  Canada  money,"  since  some  such  expression  is  necessary 
to  denote  the  exact  amount  to  be  paid,  and  is  not  intended 
to  require  that  it  shall  be  actually  paid  in  Canada  money.  It 
means,  simply,  that  the  value  of  the  stated  amount  of 
Canadian  dollars  and  cents  should  be  given  in  liquidation  of 
the  indebtedness.^  When  a  note  or  bill  is  executed  any- 
where in  the  United  States,  and  is  given  for  a  certain  num- 
ber of  dollars  and  cents,  the  presumption  is  conclusive  that 
the  parties  meant  the  lawful  money  of  the  United  States,  and 
as  a  general  rule  it  will  not  be  permitted  to  show  by  extrane- 
ous evidence  that  some  other  denomination  was  intended." 


1  "  A  note  payable  iu  Canada  currency  means  no  more  and  no  le.ss 
than  that  it  is  payable  in  Canada  money  at  the  Canada  standard,  and  that 
it  is  governed  as  to  the  amount  it  calls  for  by  the  same  rules  as  if  it  had 
been  made  in  Canada,  and  payable  in  so  many  dollars,  without  containin<^ 
any  further  direction.  *  *  *  It  is  evident  the  language  was  used  to 
exclude  the  idea  that  it  should  be  paid  in  dollars  according  to  our  paper 
standard,  and  to  put  it  on  the  footing  of  a  gold  contract.  *  *  *  It  is 
urged  that  this  is  superfluous,  and  that  as  every  one  is  presumed  to 
know  the  law,  it  would  not  have  been  put  in  except  for  some  purpose 
which  would  change  its  legal  import.  The  objection  appears  to  us  to  be 
far-fetched  and.  unreasonable.  This  case  cited  above  suflicieutly  an- 
swers it.  A  very  large  proportion  of  the  bonds  and  deeds  drawn  up  in 
this  country  describe  the  money  secured  or  paid  as  '  lawful  money  of  the 
United  States,'  when  there  can  be  no  other  lawful  money  iu  the  republic, 
and  when  it  is  clearly  superfluous."  Campbell,  J.,  in  Black  v.  Ward,  27 
Mich.  193. 

2  Bank  v.  Supervisors,  7  Wall.  26;  Thorington  v.  Smith,  8  Wall.  12; 
Stewart  v.  Salmon,  94  U.  S.  434;  Cook  v.  Lillo,  103  U.  S.  793;  Lohmaun 
V.  Crouch,  19  Gratt.  321;  Wilcoxen  v.  Keyuolds,  46  Ala.  529;  Hightower 
V.  Maull,  30  Ala.  495. 

76 


CH.  II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.         §    29c 

Hence  the  need  of  stating  that  the  instrument  is  payable 
in  money  of  the  same  denomination. 

§  29c.  Payable  in  money  of  Confederate  States.  —  But 

an  anomalous  exception  to  this  general  rule  arose  out  of  the 
war  between  the  States.  Upon  the  formation  of  the  South- 
ern Confederacy  and  the  establishment  of  its  government, 
treasury  notes,  of  the  same  denominations  and  values  as 
the  United  States  money,  were  isssued  in  great  quantities*, 
and  with  the  decline  in  the  prospects  of  Southern  victory 
the  value  of  this  paper  currency  was  depreciated,  until  it 
was  reduced  to  zero  by  the  surrender  at  Appomattox.  But 
wherever  the  Confederate  government  was  in  power,  this 
currency  constituted  almost  the  sole  medium  of  exchange, 
and  people  made  their  contracts  in  the  expectation  of  being 
paid  in  the  money  of  the  Confederate  States.  When  the 
war  was  brought  to  a  close  by  the  success  of  the  Union 
forces,  and  thus  practically  stamped  the  attempted  secession 
from  the  Union  as  an  unlawful  rebellion,  there  could  not 
be  any  doubt  as  to  the  illegality  of  the  Confederate  money, 
the  Confederate  government  itself  being  declared  to  be  an 
unlawful  assemblage  of  men.  If  the  rule,  above  stated, 
had  been  applied  with  all  its  strictness  to  the  contracts 
made  within  the  Confederate  lines,  the  courts  must  have 
held  that  they  called  for  the  payment  of  so  many  dollars 
"  of  the  lawful  money  of  the  United  States,"  although  the 
parties  had  contemplated  the  payment  in  the  depreciated 
currency  of  the  defunct  Southern  Confederacy.  This  con- 
clusion would  have  been  logical,  and  irresistible  from  the 
given  premises,  but  it  would  have  worked  hardship  and  in- 
justice upon  private  individuals.  The  courts,  in  their 
effort  to  mete  out  justice  rather  than  to  be  logical,  have 
held  that,  although  in  the  absence  of  evidence  to  the  con- 
trary it  is  the  presumption  of  law  that  in  such  contracts 
the  parties  meant  by  dollars  and  cents  the  lawful  money  of 

77 


§    29c  REQUISITES    OF    BILLS    AND    NOTES.  [CH.   II. 

the  United  States,  unci  nothing  else;  ^  yet,  if  the  parties 
were  contemplating  payment  in  the  Confederate  currency, 
the  States  within  the  control  of  the  Confederate  govern- 
ment will  be  considered  as  being  then  so  far  foreign  to  the 
United  States,  as  to  permit  parol  evidence  to  estab-lish  this 
intention  of  the  parties,  in  rebuttal  of  the  general  presump- 
tion.^  In  all  such  cases,  the  sum  payable  in  the  lawful 
money  of  the  United  States  must  be  ascertained  by  the 
determination  of  the  value  in  such  money  of  the  Confeder- 
ate currency  at  the  time  and  place,  when  and  where  the  note 
or  contract  was  made.^ 


»  The  Confederate  Note  Case,  19  Wall.  548. 

2  "  It  is  quite  clear  that  a  contract  to  pay  dollars,  made  between  citi- 
zens of  any  State  of  the  Union,  while  maintaining  its  constitutional 
relations  with  the  national  government,  is  a  contract  to  pay  lawful  money 
of  the  United  States,  and  cannot  be  modified  or  explained  by  parol  evi- 
dence. But  it  is  equally  clear,  if  in  any  other  country  coins  or  notes 
denominated  dollars  should  be  authorized,  of  different  value  from  tlie 
coins  or  notes  which  are  current  here  under  tliat  name,  that  in  a  suit 
upon  a  contract  to  pay  dollars  made  in  that  country,  evidence  would  be 
admitted  to  prove  what  kind  of  dollars  were  intended,  and  if  it  should 
turn  out  that  foreign  dollars  were  meant,  to  prove  their  equivalent  value 
in  lawful  money  of  the  United  States.  Such  evidence  does  not  modify 
or  alter  the  contract.  It  simply  explains  an  ambiguity  which,  under  the 
general  rules  of  evidence,  may  be  removed  by  parol  evidence."  Chase, 
Ch.  J.,  in  Thorington  v.  Smith,  8  Wall.  12.  In  this  case,  the  note  was 
given  in  Alabama,  within  the  Confederate  lines,  for  $10,000,  and  the  court 
held  that  since  according  to  the  evidence  Confederate  dollars  were  in- 
tended, only  that  amount  of  United  States  money  should  be  paid  in  liquida- 
tion of  the  indebtedness,  which  would  be  the  equivalent  in  value  of  that 
amount  of  Confederate  money.  See,  to  same  effect.  Confederate  Note 
Case,  19  Wall.  .548;  Stewart  u.  Salomon,  94  U.  S.  4^4;  Cook  v.  Lillo,  103 
U.  S.  793;  Wilmington,  etc.,  R.  R.  Co.  v.  King,  91  U.  S.  3;  Lohraan  w. 
Crouch,  19  Gratt.  331;  Donley  v.  Tindall,  32  Tex.  43. 

3  Stewart  v.  Salomon,  94  U.  S.  434.  In  South  Carolina,  and  per- 
haps in  other  of  the  Southern  States,  the  value  of  Confederate  money 
at  different  times  during  the  war  is  regulated  by  statutory  pro- 
visions, which  take  the  place,  and  avoid  the  necessity  of  the  actual 
proof  of  its  value  in  any  special  case.  See  Rev.  Stat.  S.  C.  (1873),  pp. 
310-31S. 

78 


CH.   II. J       COMPONENT    PARTS    OF    BILLS    AND    NOTES.         §    29e 

§  2dd.   Denomination  stated  in  body  of  paper. —  The 

denomination  of  money  must,  as  a  rule,  be  stated  in  the 
body  of  the  instrument.  But  if  the  name  of  the  denomina- 
tion should  be  omitted  in  the  body  of  the  paper,  but  the 
denominational  mark,  for  example,  "  £,"  or  "  $,'  should 
be  given  in  the  marginal  annotation  of  the  amount,  that 
will  be  sufficient,  and  any  holder  may  add  the  name  in  the 
body  of  the  paper.^ 

§  29e.  Collateral  obligations. —  It  has  already  been 
stated  that,  in  order  that  a  note  or  bill  may  have  the  char- 
acter of  negotiability,  it  must  call  only  for  the  payment  of 
money.  Under  this  rule,  it  has  frequently  been  held  that 
a  contract  is  not  negotiable  which  stipulates  some  other 
obligation  than  the  payment  of  money,  as,  for  example,  the 
transfer  of  certain  property  or  the  performance  of  certain 
work.^  At  one  time  this  rule  was  rigidly  enforced  and  no 
permissible  exceptions  were  recognized.  But  of  late  a 
tendency  is  manifested  by  the  courts  to  relax  the  rule,  so 
far  as  to  permit  collateral  obligations  to  be  incorporated 
into  a  note  or  bill,  without  affecting  its  negotiable  charac- 
ter,  which  are  designed  to  facilitate  its  collection,  or  in  some 
other  way  increase  the  security  of  the  holder.     Thus,  it  has  { 

1  Rexv.  Elliott,  2  East  P.  C.  951;  Coolbroth  v.  Purinton,  29  Me.  469; 
Northrop  v.  Sanboru,  22  Vt.  433;  Sweetzerw.  French,  13  Met.  262;  Burn- 
ham  v.  Allen,  1  Gray,  469;  Booth  v.  Wallace,  2  Root,  247;  Harman  v. 
Howe,  27  Gratt.  677;  McCoy  v.  Gilmore,  7  Ohio,  268;  Corgau  v.  Frew,  39 
111.  31;  Williamsons.  Smith,  1  Cold.  1;  Murrill  v.  Handy,  17  Mo.  406; 
Beardsley  v.  Hill,  61  111.  354. 

2  Contract  to  pay  a  sum  of  money  and  to  deliver  up  certain  property, 
Martin  r.  Chauntry,  2  Strange,  1271;  the  payment  of  money  and  the  per- 
formance of  certain  work,  Fetcher  v.  Thompson,  55  N.  H.  208 ;  payment 
of  a  certain  sum  and  the  liquidation  of  certain  other  debts  or  obliga- 
tions, Ayrey  v.  Fearnsides,  4  Mees.  &  W.  168;  Cooli  v.  Satterlee,  6  Cow. 
108:  a  certain  sum  for  the  hire  of  a  negro  "  said  negro  to  be  furnished 
with  tlie  usual  quantity  of  clothing,"  Barues  v.  Gorman,  9  Rich.  297 
(contra,  Baxter  v.  Stewart,  4  Sneed,  213;  Gaines  v.  Shelton,  47  Ala.  413)  ; 
see,  also,  ante,  §  29. 

79 


c 


§    2de  REQUISITES    OF    BILLS    AND    NOTES.  [cil.   II. 

been  quite  common  to  insert  in  promissory  notes  an  author- 
ity to  the  holder  or  some  one  else,  in  default  of  payment, 
to  confess  judgment  for  the  amount  of  the  note.  So,  also,  is 
it  somewhat  customary  to  include  in  such  paper  a  waiver  of 
the  benefit  of  appraisement  and  exemption  laws,  and  other 
statutory  provisions  designed  for  the  protection  of  the 
debtor.  At  first,  the  courts  were  designed  to  hold  that  the 
insertion  of  such  stipulations  would  destroy  the  negotiabil- 
ity of  the  note.^     But  these  stipulations  have  become  more 

1  Overton r.  Tyler,  3  Barr,  346.  In  this  case,  the  note  was  as  follows: 
"  For  value  received,  I  promise  to  pay  Francis  Tyler  and  Levi  "West- 
wood,  or  bearer,  one  thousand  dollars  with  interest,  by  the  first  day  of 
June  next.  And  I  do  hereby  authorize  any  attorney  of  any  court  of  rec- 
ord in  Pennsylvania  to  appear  for  me  and  confess  judgment  for  the 
above  sum  to  the  holder  of  this  siugle  bill,  with  costs  of  suit,  hereby  re- 
leasing all  errors  and  waiving  stay  of  execution,  and  the  right  of  in- 
quisition on  real  estate;  also  waiving  the  right  to  have  any  of  my 
property  appraised  which  may  be  levied  upon  by  virtue  of  any  execution 
issued  for  the  above  sum."  In  pronouncing  this  note  to  be  non-nego- 
tiable, Gibson,  Ch.  J.,  said:  "  A  negotiable  bill  or  note  is  a  courier  with- 
out luggage.  It  is  requisite  that  it  be  framed  in  the  fewest  possible 
words,  and  those  importing  the  most  certain  and  precise  contract;  and 
though  this  requisite  be  a  minor  one,  it  is  entitled  to  weight  in  determin- 
ing a  question  of  intention.  To  be  within  the  statute,  it  must  be  free 
from  contingencies  or  conditions  that  would  embarrass  it  in  its  course; 
for  a  memorandum  to  control  it,  though  indorsed  on  it,  would  be  incor- 
porated with  it  and  destroy  it.  But  a  meraoi-andum,  which  is  merely 
directory  or  collateral  will  not  affect  it.  The  warrant  and  stipulations 
incorporated  with  this  note  evince  that  the  object  of  the  parties  was  not 
a  general,  but  a  special  one.  *  *  *  a  warrant  to  confess  judg- 
ment, not  being  a  commercial  instrument  or  a  legitimate  part  of  one,  but 
a  thing  collateral,  would  not  pass  by  indorsement  or  delivery  to  a  subse- 
qut-'ut  holder;  and  a  curious  question  would  be,  whether  it  would  sur- 
vive as  an  accessory  separated  from  its  principal,  in  the  hands  of  the 
payee,  for  the  benefit  of  the  transferee.  I  am  unable  to  see  how  it  would 
authorize  him  to  enter  a  judgment,  for  the  use  of  another,  on  a  note  with 
Avhicli  he  had  parted.  But  it  may  be  said  that  his  transfer  would  be  a 
waiver  of  tiie  warrant  as  a  security  for  himself  or  any  one  else;  and 
that  subsequent  holders  would  take  the  note  without  it.  The  principle 
is  certainly  applicable  to  a  memorandum  indorsed  after  signing  or  one 
written  on  a  separate  paper.  But  th-  appearance  of  a  paper  with  such 
unusual  stipulations  incorporate. 1  wi  h  it  would  be  apt  to  startle  coramer- 
80 


CH.   II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.  §    30 

commoa  since  the  day  when  the  case  of  Overton  v.  Tyler 
was  decided  ;  "  and  the  declaration  of  Chief  Justice  Gibson 
in  that  case,  that  '  a  negotiable  bill  or  note  is  a  courier 
without  lugsage '  is  answered  by  the  assertion  that  such 
provisions  facilitate  rather  than  encumber  the  circulation 
of  such  instruments.  They  are  not  luggage,  but  ballast."  ^ 
Such  stipulations  are  now  generally  held  to  have  no  effect 
upon  the  negotiable  character  of  the  instrument  in  which 
they  appear. 2  It  has  also  been  held  that  any  holder  of 
such  a  negotiable  instrument  may  claim  the  benefit  of  such 
stipulations.^ 

§  30.  The  place  of  payment. —  If  no  place  of  payment 
is  mentioned  in  the  commercial  paper,  then  it  is  payable  at 
the  place  of  business  of  the  payor,  and  at  his  residence,  if 
he  has  no  place  of  business  or  office.  If  the  paper  be  a 
note,  it  ispaj^able  at  the  place  of  business  or  residence  of  the 
maker,  and  if  it  is  a  bill  of  exchange,  at  that  of  the  drawee 
and  acceptor.*     But  if  a  foreign  bill  is  drawn  upon  one,  and 

cial  men  as  to  their  effect  ou  the  coutract  of  indorsement  and  make  them 
reluctant  to  touch  it.  All  this  shows  that  these  parties  could  not  have 
intended  to  impress  a  commercial  character  on  the  note,  dragging  after 
it,  as  it  would,  a  train  of  special  provisions  which  would  materially  im- 
pede its  circulation." 

1  1  Daniel  Negot.  Inst.  §  61. 

2  "  It  is  urged  that  the  words  '  waiving  the  right  of  appeal  and  of  all 
valuation,  appraisement,  stay  and  exemption  laws,'  destroys  its  negotia- 
bility. In  what  way?  They  do  not  contain  any  condition  or  contin- 
gency, but  after  the  note  falls  due  and  is  unpaid,  and  the  maker  is  sued, 
facilitate  the  collection  by  waiving  certain  rights  which  he  might  exercise 
to  delay  or  impede  it.  Instead  of  clogging  its  negotiability  it  adds  to  it, 
and  gives  additional  value  to  the  note."  Bead,  J.,  in  Zimraei'manr\  An- 
derson, 67  Pa.  St.  421.  See,  to  same  effect,  Clements  v.  Hull,  35  Ohio 
St.  141 ;  Walker  r.  Woollen,  54  Ind.  164. 

3  Clements  v.  Hull,  35  Ohio  St.  141. 

■*  But  if  the  drawer  directs  on  the  face  of  the  bill  that  it  is  to  be  paid 
at  his  habitation,  the  instrument  is  presumed  to  be  accommodation 
paper,  and  demand  may  be  made  upon  him  for  payment.  Sharp  v. 
Bailey,  9  B.  &  C.  44. 

6  81 


§    30  REQUISITES    OF   BILLS    AND    NOTES.  [CH.  II. 

is  addressed  to  the  drawee  at  one  place  or  another,  in  the 
alternative,  the  place  of  payment  will  be  presumed  to  be 
where  he  accepted  the  bill.^  If  the  place  of  payment  is 
named  in  the  instrument,  as  is  frequently  the  case,  the  pre- 
sentment must  be  made  at  that  place ;  and  while  it  is  not 
necessary,  in  order  to  hold  the  maker  of  a  note  or  acceptor 
of  a  bill,  to  present  the  paper  for  payment  at  the  stated 
place  of  payment,  unless  it  is  expressed  to  be  payable  at  the 
stated  place  "only  and  not  elsewhere," — and  even  then 
the  failure  to  present  at  that  place  will  only  prevent  the  ac- 
crument  of  interest,  and  relieve  the  debtor  of  liability  for 
costs  of  protest,^  —  it  is  necessary  in  order  to  hold  the  in- 
dorsers  and  other  persons  secondarily  liable  on  the  paper. 
If  the  presentment  is  not  made  at  the  stated  place,  the  in- 
dorsers,  drawer  and  sureties  are  discharged.^ 

The  statement  of  a  place  of  payment  is  usually  not  a 
requisite  to, the  negotiability  of  a  note  or  bill.  But  by 
statute,  in  some  of  the  States,  it  is  now  required  that,  in 
order  that  a  note  may  be  negotiable,  the  place  of  payment 
must  be  specified  in  the  body  of  the  instrument.* 

1  Freese  v.  Brownell,  35  N.  J.  L.  285;  Cox  v.  National  Bank,  100  U.  S. 
713. 

2  Wallace  v.  McConuell,  13  Pet.  130;  Cox  v.  National  Bank,  100  U.  S. 
714;  Ruggles  v.  Fatten,  8  Mass.  480;  Caldwell  v.  Cassidy,  8  Cow.  271; 
Hills  V.  Place,  48  N.  Y.  520;  Reeve  v.  Pack,  6  Mich.  240.  Contra,  Sander- 
son V.  Bowes,  14  East,  500.  See  post,  chapters  on  Presentment,  for  a 
fuller  statement  of  the  proposition. 

3  Bank  of  the  United  States  v.  Smith,  11  Wheat.  171 ;  Cox  v.  National 
Bank,  100  U.  S.  712;  Shaw  v.  Reed,  12  Pick.  132;|Watkins  v.  Crouchl,  5 
Leigh,  522;  Brown  v.  Hull,  23  Gratt.  27;  Lawrence?;.  Dobyns,  30  Mo. 
196.     See  post,  chapters  on  Presentment. 

4  Grossman  v.  May,  (i8  Ind.  242;  Salmons  v.  Hoyt,  53  Ga.  493;  Gates 
T.  National  Bank,  100  U.  S.  239  (construing  Alabama  statute).  In  In- 
diana the  statutory  requirement,  that  the  note  must  be  payable  at  or  in 
a  bankj  was  not  sufficiently  complied  with,  if  the  note  is  payable  "at 
Indiana  Banking  Co."  Rominger  v.  Keyes  73  Ind.  37(J.  In  Virginia, 
where  by  statute  a  negotiable  note  is  required  to  be  payable  at  a  partic- 
ular bank  or  business  office  (Code  of  1873,  ch.  141  §,  7),  it  was  held  that 

82 


CH.   II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.  §    31 

§  31.  Acknowledgment  of  consideration  —  It  is  an  al- 

iiio.st  invariable  custom  to  insert  in  commercial  paper  the 
•words  *' value  received,"  or  others  of  like  import,  as  an 
acknowledgment  of  the  receipt  of  a  consideration  from  the 
payee.  And,  although  these  or  like  words  were  considered 
to  be  necessary  to  the  negotiability  of  bills  of  exchange, 
according  to  the  law  merchant,^  it  is  now  very  generally 
held  in  England  and  in  the  United  States,  that  an  acknowl- 
edgment of  consideration  is  not  necessary  to  the  negotia- 
bility of  bills  of  exchange  or  of  promissory  notes  unless 
the  statute,  which  makes  promissory  notes  negotiable, 
stipulates  that  such  an  acknowledgment  is  necessary.^ 
When  the  words  "value  received"  are  contained  in  a 
note,  it  is  conclusive  that  they  are  intended  to  indicate  that 
the  maker  has  received  a  valuable  consideration  from  the 
payee/  But  when  they  appear  in  a  bill  of  exchange,  the 
meaninsf  of  them  is  somewhat  doubtful.  If  the  bill  is  drawn 
payable  to  the  order  of  a  third  person,  it  may  mean,  either 
that  the  drawer  has  received  value  from  the  payee,  or  that 

a  particular  bank  or  office  must  be  mentioned  in  the  note;  and  that  a 
note  was  not  negotiable,  whicli  was  made  payable  "  at  either  of  the  bank- 
ing houses  in  Wheeling,  Va."  Freeman's  Bank  v,  Euckman,  1(3  Gratt. 
126.     See  Spitler  v.  Jamps,  32  Ind.  203;  Gillaspie  v.  Kelly,  41  Ind.  158. 

1  Cramlington  v.  Evans,  1  Show.  5;  Vin.  Ab.,  Bills  of  Exchange,  G., 
2;  Byles  on  Bills,  *85;  1  Daniel's  Negot.  Inst.,  §  108. 

2  Popplewell  V.  Wilson,  1  Stra.  264,  note ;  White  v.  Ledwig,  4  Dougl.  427; 
Grant  v.  DaCosta,  3  M.  &  S.  351 ;  Macleod  v.  Snee,  2Ld.  Raym.  1481 ;  Hatch 
V.  Frayes,  11  Ad.  &  El.  702;  Kendall  v.  Galvin,  15  Me.  131 ;  Benjamin  v. 
Fillman,  2  McLean,  213;  Townseud  v.  Derby,  3  Mete.  263;  Arnold  v. 
Sprague,  34  Vt.  402;  Hughes  v.  Wheeler,  8  Cow.  77;  Underbill  v.  Phil- 
lips, 10  Hun  (N.  Y.  S.  C.)  591 ;  Hubble  v.  Fogartie,  3  Rich.  413;  People  v. 
McDerraott,  8  Cal.  288;  1  Parson's  N.  &  B.  193.  In  Missouri,  the 
statutoiy  provisions  require  the  words  "  value  received  "  to  be  incor- 
porated in  promisory  notes,  but  they  are  not  necessary  to  the  negotia- 
bility of  bills  of  exchange.  Loweustein  u.  Knoff,  2  Mo.  App.  159; 
International  Bank  v.  German  Bank,  3  Mo.  App.  362;  Bailey  v.  Smock, 
61    Mo.  213. 

3  Clayton  v.  Gosling,  5  B.  &  C.  (11  E.  'C.  L.  R.)  361;  s.  c.  8  D.  &  R. 
110. 

83 


§    32  KEQUISITES    OF    BILLS    AND    NOTES.  [CH.  II. 

the  acceptor  has  received  the  value  from  the  drawer.  But, 
ordinarily,  the  words  are  presumed  to  be  an  acknowledg- 
ment of  consideration  by  the  drawer  from  the  payee. ^  If  the 
bill  is  payable  to  the  drawer's  own  order,  the  more  rea- 
sonable presumption  is  that  these  words  constitute  an 
acknowledgment  or  declaration  of  consideration  from  the 
drawer  to  the  acceptor. ^ 

There  is  usually  only  a  general  acknowledgment  of  con- 
sideration by  the  use  of  the  words  "  value  received  "  or  of 
other  like  phrases.  But  sometimes  a  particular  considera- 
tion is  mentioned,  and  if  it  be  a  sufficient  one,  according  to 
the  law  of  consideration, Hbe  instrument  will  be  negotiable.* 

§  32.  Sealed  instruments  not  commercial  paper. — The 

weight  of  authority  is  decidedly  in  favor  of  the  proposition 
that,  in  the  absence  of  statutory  regulations  to  the  con- 
trary, sealed  instruments  cannot  be  included  in  commercial 
paper  :  that  it  is  a  requisite  not  only  of  bills  of  exchange,' 
but,  also,  of  promissory  notes,^  that  they  must  be  "  open 
letters,"  that  is,  unsealed.  The  reason  for  this  conclusion 
seems  to  be  that  sealed  instruments  are  ancient  and  of 
common-law  origin,  and,  according  to  the  common  law, 
could  not  be  assigned  or  transferred.     Whereas,  bills  of  ex- 

1  Grant  v.  Da  Costa,  3  M.  &  S.  351. 

2  Highmore  v.  Primrose,  5  M.  &   S.  65. 

3  See  post,  chapter  on  Consideration. 

<  Jury  ?;.  Barker,  EI.   B.  &  El.  459 ;  Shen  ton  u.   James,   5  Q.   B.    199; 
Sylvesters.  Staples,  U  Me.  490;  Corbett  v.  Clark,  45  Wis.  403. 

5  Conine  v.  Junction  &  B.  R.  Co.,  3  Houst.  289;    Story  on  Bills,  §  62. 
But  see,  contra,  Irwin  v.  Brown,  2  Cranch  C.  C.  314. 

«  Warren  v.  Lyncli,  5  Jolms.  239;  Clark  v.  Farmers'  Manuf'g  Co.,  15 
Wend.  25G;  Hopkins  v.  Railroad  Co.,  3  Watts  &  S.  410;  Cleggv.  Leme- 
surier,  15  Gratt.  108;  Mann  v.  Sutton,  4  Rand.  253;  Parks  w.  Duke,  2 
McCord,  380;  Lewis  v.  Wilson,  5  Blackf.  369;  Helpers.  Alden,  3  Minn. 
332.  Where  the  note  is  signed  by  some  of  the  parties  with,  and  by  others 
without,  a  seal,  it  will  be  a  specialty  contract  as  to  the  former,  while  it 
will  be  treated  as  a  promissory  negotiable  note  against  the  latter.  Ran- 
kin V.  Roler,  8  Gratt.  63. 
84 


CH.   II. J       COMPONENT    PARTS    OF    BILLS    AND    NOTES.  §    32 

change  and  promissory  notes,  being  products  of  mercantile 
custom,  were  originally  executed,  as  a  rule,  without  seals. 
If,  therefore,  one  should  execute  a  sealed  instrument,  it 
would  be  conclusive  proof  that  he  did  not  intend  to  make 
a  negotiable  bill  or  note.^  Hence,  although  sealed  instru- 
ments, with  choses  in  action  in  general,  are  now  made  as- 
signable by  statute  in  most  of  the  States,  they  are  under 
this  rule  denied  the  peculiar  qualities  of  negotiability.  The 
rule  has  been  held  to  apply  to  corporations,  as  well  as  to 
natural  persons,  so  that  the  affixing  of  the  corporate  seal 
destroys  the  negotiability  of  the  paper.-  But  the  tendency 
at  the  present  day  is  to  hold  that  the  use  of  the  corpor- 
ate seal  in  the  execution  or  indorsement  of  a  bill  or  note 
does  not  affect  its  negotiability,  since  "  the  seal  of  a 
corporation  is  not  in  itself  conclusive  of  an  intent  to  make 
a  specialty.  It  is  equally  appropriate  as  the  means  of  evi- 
dencing the  assent  of  a  corporation  to  be  bound  by  a  sim- 
ple contract  as  by  a  specialty."  ^ 

^  ''  Deeds  or  sealed  instruments  are  not  only  of  a  much  higher  anti- 
quity than  bills  of  exchange,  but  they  are  of  a  totally  different  origin. 
They  cannot  be  said  to  be  made  secundum  usum  mercatorum  since  they 
find  their  recognition  and  validity  in  the  more  ancient  rules  of  the  common 
law.  On  the  other  hand,  bills  of  exchange  find  their  origin  and  sanc- 
tion in  the  usage  and  custom  of  merchants,  the  lex  mercatoria,  a  particu- 
lar or  peculiar  system,  which,  being  in  the  interest  of  commerce,  became 
at  length  gradually  engrafted  into,  and  established  as  a  part  of  the  com- 
mon law  itself.  *  *  *  All  contracts  under  seal  are  specialties,  seal- 
ing and  delivery  being  the  particular  form  and  ceremony  which  alter  the 
nature  and  operation  of  the  agreement.  Forms  consecrated  by  time  and 
usage,  become  substance.  The  seal  is  substance  and  changes  the  nature 
and  operation  of  the  contract.  It  seems  to  me,  therefore,  that  the  ques- 
tion which  I  have  been  considering  is  settled  upon  princple  against 
the  plaintiffs.  But,  however  this  may  be,  it  has  been  held  as  settled  for 
more  than  thirty  years  past."  Gilpin,  Ch.  J.,  in  Conine  i'.  Junction  & 
B.  R.  Co.,  3  Houst.  289. 
•    *  Clark  V.  Farmers'  Manuf'g  Co.,  15  Wend.  256. 

3  Central  Nat.  Bk.  v.  Charlotteville,  etc.,  R.  Co.,  5  S.  C.  156;  Rand  v. 
Dovey,  83  Pa.  St.  280.  In  the  last  case,  the  instrument  was  indorsed 
under  seal  of  the  corporation. 

85 


§    33  REQUISITES    OF    BILLS    AND    NOTES.  [ciI.   II. 

The  rule  has,  also,  of  late  years,  been  modified  by  the 
courts  holding,  that  in  order  that  the  affixing  of  a  seal 
to  what  would  otherwise  be  a  negotiable  bill  or  note 
may  make  the  paper  a  specialty  contract  and  destroy 
its  negotiability,  there  must  be  some  attestation  or 
recoo;nition  of  the  use  of  a  seal  in  the  body  of  the 
instrument;  as,  for  example,  by  the  insertion  of  some  such 
words  as  "witness  my  hand  and  seal"  or  "  signed  and 
sealed."  This  limitation  of  the  rule  is  advocated  as  a 
guard  against  the  practice  of  fraud  by  the  unauthorized 
addition  of  a  seal.^  In  some  of  the  States,  the  rule  has  by 
statute  been  altogether  repealed,  and  in  those  States  scaled 
instruments  are  negotiable,  if  they  possess  all  the  other 
requisites  of  commercial  paper .^ 

§  33.  Attestation  of  witnesses.  — It  is  not  at  all  neces- 
sary to  the  validity  of  commercial  paper  that  the  signature 
of  the  maker  be  attested  by  a  subscribing  witness.  But, 
sometimes,  particularly  when  the  signature  is  made  by  a 
mark  or  by  the  initials,  it  is  advisable  to  have  attesting  wit- 
nesses. When  there  is  such  a  witness,  the  execution  of  the 
paper  can  only  be  proved  by  his  testimony,  unless  he  can- 
not be  produced  at  the  trial,  on  account  of  his  death,  ab- 
sence from  the  country,  or  other  inability  to  appear.^  If 
the  witness  cannot  be  produced,  the   execution  may  and 

1  Peasley  V.  Boatwright,  2  Leigh,  19G;  Crorawallw.  Tate's  Esrs.  7  Leigh 
305;  Austin  v.  Whitlock,  1  Muuf.  487;  Anderson  v.  Bullock,  4  Muuf.  442; 
Baird  v.  Blagrove,  1  Wash.  170;  Argenbright u,  Campbell,  3  H.  M.  174; 
Skrlne  r.  Lewis,  Ga.    (1882). 

2  Such  statutes  are  to  be  found  in  Colorado,  Dakota,  Florida,  Georgia, 
Illinois,  Kansas,  Massachusetts,  Nebraska,  North  Carolina,  Ohio,  Ten- 
nessee, and  probably  in  other  States.     1  Daniel  Negot.  lust.,  §  33. 

3  Greenleaf  on  Evidence,  §§  5C9,  572;  2  Parsons  on  N.  &B.  474;  Stone 
V.  Metcalf,  1  Stark.  5'3;  Lemon  v.  Deane,  2  Camp.  636;  Richards 
V.  Fraukum,  9  C.  &  P.  211;  Burt  v.  Walker,  4  B.  &  Aid.  697;  January 
V.  Goodman,  1  Dall.  208;  Wood  v.  Doury,  1  Ld.  Raym.  734;  Nelson 
V.  Whittall,  1  B.  &  Aid.  22,  note. 

8G 


CH.  II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.  §    34 

should  be  proved  by  proof  of  his  (the  witness')  signature.* 
And  if  he  cannot  prove  his  own  signature,  when  he  appears, 
it  may  also  be  proved  by  secondary  evidence.^ 

In  England,  by  statute,  proof  by  the  attesting  witness  is 
dispensed  with,  and  may  be  furnished  by  any  other  testi- 
mony; ^  and  in  this  country,  the  rule  is  now  so.  far  relaxed, 
that  proof  by  the  witness  is  not  necessary,  where  there 
is  an  unequivocal  admission  of  his  signature  by  the  maker 
or  other  party  defendant.* 

§  34.  Delivery.  —  Until  the  bill  or  note  has  been  deliv- 
ered to  the  payee,  it  can  have  no  validity.  Intentional  de- 
livery is  also  essential.  For,  while  the  possession  of  a 
commercial  paper  by  the  payee  or  some  one  else,  other 
than  the  maker  or  acceptor,  to  whom  on  its  face  it  appears 
to  be  payable,  is  prima  facie  evidence  of  a  good  title,  yet 
it  is  not  conclusive;®  and  if  it  be  shown  that  there  has  been 
no  delivery  to  the  payee,  it  is  valueless  even  in  the  hands 
of  an  innocent  purchaser.  As  long  as  a  bill  or  note  has  not 
been  delivered,  it  is  a  nullity.^  Delivery  is  so  essential  a 
part  of  the  execution  of  a  bill  or  note,  that  it  is  not  neces- 
sary to  aver  that  it  has  been  delivered,  since  the  averment 

1  Greenleaf  on  Evidence,  §  575 ;  Page  v.  Newman,  M.  &  M.  79 ;  Dun- 
bar u.  Harden,  13  N.  H.  311;  Shiver  v.  Johnson,  2  Brev.  397;  Busseyt;. 
Whittaker,  2  Nott  &  McC.  374;  Lyons  v.  Holmes,  11  S.  C.  429. 

2  Lemon  v.  Deane,  2  Camp.  636;  Quimby  v.  Buzzell,  16  Me.  470; 
"WalJier  v.  Warfleld,  0  Met.  4G6 ;  Shiver  v.  Johnson,  2  Brev.  397. 

3  1  Daniel's  Negot.  Inst.,  §  112. 

^  Hodges  V.  Eastman,  12  Vt.  358;  Shaver  v.  Ehle,  16  Johns.  201;  Hall 
V.  Phelps,  16  Johns.  451;  Henry  v.  Bishop,  2  Wend.  575;  Williams  v. 
Floyd,  11  Pa.  St.  499. 

5  Woodford  v.  Dorwiu,  3  Vt.  82;   Griswold  v.  Davis,  31  Vt.  390. 

6  Koberts  v.  Bethell,  12  C.  B.  778;  Cox  v.  Troy,  5  B.  &  Aid.  474; 
Bailey  v.  Taber,  5  Mass.  286;  Woodford  v.  Dorwin,  3  Vt.  82;  Lansing  v. 
Caine,  2  Johns.  300;  Marvin  v.  McCullom,  20  Johns.  288;  Devries  v. 
Shumate,  53  Md.  216;  Ward  v.  Churn,  18  Gratt.  801;  Howe  v.  Ould; 
Bartlett  y.  Ould,  28  Gratt.  7;  Hopper  v.  Eilaud,  21  Ala.  714;  Eichards  u. 
Darst,  51  111.  141;  Freeman  v.  Ellison,  37  Mich.  459. 

87  ' 


§    34rt  REQUISITES    OF    BILLS    AND    NOTES.  [CH.   II. 

of   the  milking  of  a  note  or  bill  necessarily  includes  the 
idea  of  delivery.^ 

A  bill  or  note,  found  among  the  papers  of  the  drawer 
or  maker  at  his  death,  canndt  be  sued  on  by  the  payee ;  ^ 
nor  can  the  personal  representative  make  an  effectual 
delivery  of  it,^  even  though  the  deceased  has  left  in- 
structions for  its  delivery,  unless  those  instructions  could 
operate  as  a  will  and  testament.^  If  the  paper  is  given  to 
an  agent  to  be  by  him  delivered  to  the  payee,  as  long  as  the 
agent  has  not  in  fact  delivered  it  to  the  payee,  it  is  subject 
to  the  recall  of  the  maker ;  and  he  can  com])el  its  return  to 
him/^  Delivery  may  be  either  actual  or  constructive.  A 
direction  to  the  custodian  of  a  negotiable  instrument  to  hold 
it  to  the  payee's  order,  or  to  deliver  it  to  him  or  the  indorsee, 
is  equivalent  to  an  actual  delivery.*'  And  even  where,  in  in- 
dorsing a  note,  the  indorser,  who  sustains  the  character  of 
banker  of  the  indorsee,  instead  of  making  an  actual  deliv- 
ery to  him,  puts  it  into  an  envelope  containing  other  papers 
of  the  indorsee,  this  is  held  to  be  a  good  constructive  de- 
li very.'' 

§  34a.  I>elivery  to  whom. — Ordinaril}',  the  delivery 
must  be  made  to  the  payee.     But  this  is  not  always  neces- 

1  Churchill  v.  Gardner,  7  T.  R.  oOG;  Smith  v.  McClure,  5  East,  477; 
Binuey  v.  tluraley,  5  Vt.  500;  Peets  v.  Bratt,  G  Barb.  662;  Black  v.  Duu- 
can,  60  Ind.  522;  Chester,  etc.,  R.  R.  Co.  v.  Lickiss,  72  111.  521. 

2  Disher  v.  Disher,  1  P.  Wms.  204. 

5  Bromage  v.  Lloyd,  1  Exch.  32;  Clark  v.  Sigourney,  17  Conu.  511; 
Clark  V.  Boyd,  2  Ohio,  56.  But  it  has  been  held  that  where  the  payee 
has  made  advances  in  expectation  of  the  delivery  of  the  paper,  he  or  his 
indorseewould.be  entitled  to  a  delivery,  notwithstanding  the  maker's 
death.     Perry  ri.Crammoud,  1  Wash.  C.  C.  100;  1  Parson's  N.  &  B.  49. 

*  Gough  V.  Findon,  7  Exch.  48. 

s  King  v.  Lambtou,  5  Price,  428;  De^^•ies  v.  Shumate,  53  Md.  216;  1 
Parson's  N.  &  B.  43-50. 

6  Fishery.  Bradford,  7Greenl.  28;  Richardson u.  Lincoln,  5  Mete.  201; 
Howe  V.  Ould,  28  Graft.  7;   Mitchell  v.  Byrne,  6  Rich.  171. 

7  Williams  v.  Gait,  65  111.  172. 

88 


CH.  II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.         §    346 

sary.  It  may  be  delivered  to  a  third  person  for  the  bene- 
fit of  the  payee. ^  But  the  assent  of  the  payee  is  necessary 
in  order  to  make  the  transaction  complete.  Where,  how- 
ever, a  note  or  bill  is  delivered  to  a  father,  for  the  benefit 
of  a  minor,  or  to  a  trustee,  for  the  benefit  of  a  cestui  que 
trusty  the  assent  of  the  payee  is  presumed  from  the  confi- 
dential relation  existing  between  him  and  the  person  to 
whom  the  delivery  is  made.^ 

The  instrument  cannot  be  left  upon  the  desk  or  counter 
of  the  payee's  place  of  business,  and  be  legally  delivered, 
unless  it  is  leftthere  with  the  knowledge  and  assent,  either 
of  the  payee,  or  of  one  who  is  authorized  to  act  for  him 
in  such  a  case.^  But  a  mere  objection  to  the  form  of  the 
instrument  will  not  invalidate  the  delivery,  if  the  instru- 
ment is  retained  by  the  payee.* 

It  is  also  quite  customary  to  make  delivery  of  com- 
mercial paper  through  the  mail.  And  if  this  is  done, 
with  the  express  or  implied  assent  of  the  payee,  it  consti- 
tutes a  good  delivery,  binding  all  parties  to  the  contract, 
even  though  the  paper  should  be  lost  in  the  mail.^  Where 
the  paper  is  delivered  through  the  mail  or  express,  as  long 
as  it  is  in  trcnisitu,  the  maker  or  indorser  may  exercise  the 
right  of  stoppage  in  transitu  in  the  same  manner  and  under 
the  same  limitations  as  the  vendor  of  any  other  kind  of 
personal  property.^ 

§  346.  Time  of  delivery.  —  The  commercial  paper  takes 
effect  only  from  the  time  of  delivery,  and  w^here  there  is 

1  Elliott  V.  Deason,  64  Ga.  63. 

2  Mason  v.  Hyde,  41  Vt.  432;  Tucker  v.    Bradley,  33  Vt.  325. 

3  Chicopee  Bank  v.  Phila.  Bank,  8  Wall.  641;  Kinney  v.  Ford,  52  Barb. 
194. 

*  Bodley  v.  Higgins,  73  111.  375. 

^  Rex  V.  Lambton,  5  Price,  428;  Kirkmau  v.  Bank  of  America,  2  Cold. 
397. 

6  Muller  V.  Pondir,  55  N.  Y.  325. 

89 


§    34c  REQUISITES    OF    BILLS    AND    NOTES.  [CH.   II. 

a  date  given  in  the  paper,  the  delivery  is  presumed  to  have 
been  made  on  that  date  ;^  and  in  every  case  it  is  presumed 
to  have  been  made  before  the  day  of  maturity. ^  But  this 
presumption  may  be  rebutted ;  and  it  may  be  shown  by 
parol  evidence  that  the  paper  had  been  delivered  on  some 
other  day.''  But  the  difference  between  the  date  of  the  in- 
strument and  the  time  of  its  actual  delivery  will  not  be 
allowed  to  vary  the  time  of  maturity,  where  it  is  made 
payable  at  a  certain  time  after  date.  The  time  will  be  com- 
puted from  the  day  stated  in  the  instrument,  although  it 
had  not  been  delivered  until  a  later  day.*  It  is  also  proper 
to  describe  the  paper  in  the  pleadings  as  having  been 
drawn  on  the  given  date,  instead  of  the  actual  day  of 
delivery.* 

§  34c.  Delivei'y  on  Sunday.  — The  common  law  contains 
no  prohibition  of  labor  on  Sundays;  but  in  very  many,  in 
fact  most,  of  the  States,  there  are  statutes  in  force,  which 
prohibit  the  prosecution  of  all  ordinary  pursuits,  and  in- 
validate all  contracts  and  business  transactions.  Under 
these  statutes,  no  suits  can  be  maintained  on  bills  of  ex- 
change and  promissory  notes,  which  are  executed  or  indorsed 
on  Sunday.®     But  a  bill  or  note  is  not  fully  executed  until 


1  Sinclair  v.  Baggaley,  4  M.  &  W.  312;  Anderson  v.  Weston,  6  Bing. 
(N.  C.)  29G;  Cranston  v.  Goss,  107  Mass.  439. 

2  Churchill  v.  Gardiner,  7  T.  K.  596;  Smith  v.  McClure,  5  East,  477. 

3  Woodford  v.  Dorwin,  3  Vt.  82;  Lovejoy  v.  Whipple,  18  Vt.  379. 

*  Snaith  v,  Mingay,  1  M.  &  S.  87;  Barker  v.  Sterne,  9  Exch.  684; 
Powell  V.  Waters,  8  Cow.  669 ;  Bumpass  v.  Timras,  3  Sneed,  459. 

5  Snaith  v.  Mingay,  1  M.  •&  S.  89.  See  Hague  v.  French,  3  Bos.  &  Pul. 
173;  Giles  v.  Bourne,  6  M.  &  S.  73. 

6  Bk.  of  Cumberland  v.  Mayberry,  48  Me.  198;  Pope  v.  Linn,  50  Me. 
86;  Benson  r.  Drake,  55  Me.  555;  Smith  v.  Bean,  15  N.  H.  577;  State 
Capital  Bk.  v.  Thompson,  42  N.  H.  370;  Ball  v.  Powers,  62  Ga.  757; 
Bramhall  v.  Van  Camper,  8  Minn.  13;  Pinney  v.  Callendar,  8  Minn.  42; 
Smith  V.  Case,  2  Ore.  190.  Concerning  the  constitutionality  of  Sunday 
laws,  see  Tiedeman's  Limitations  of  Police  Power,  §  71. 

00 


CH.   II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.         §    34c 

it  has  been  delivered ;  and  if  it  should  be  signed  on  Sunday, 
but  not  delivered  until  Monday,  or  on  some  other  secular 
day,  it  will  be  valid.  It  does  not  become  a  Sunday  con- 
tract, because  the  paper  was  dated  and  written  out  on  Sun- 
day ;  and  although  it  is  presumed  that  a  bill  or  note  is 
delivered  on  the  day  of  the  date,  parol  evidence  is  admis- 
sible to  show  that  it  has  been  delivered  on  some  other  day.^ 
Nor  does  it  affect  the  validity  of  such  a  note  or  bill,  that 
interest  is  to  be  computed  from  the  Sunday,  when  it  was  ' 
dated  and  sisrned.^  And  it  seems  to  be  also  well  settled  that 
even  though  a  piece  of  commercial  paper  is  delivered  on 
Sunday,  it  may  be  legalized  by  a  subsequent  ratification  or 
a  redelivery  of  the  paper. ^  In  any  event,  the  illegal  delivery 
on  Sunday  will  not  prevent  a  recovery  of  the  consideration, 
for  which  the  paper  was  given.* 

It  is  not  necessary  for  the  defendant  to  prove  affirm- 
atively that  the  paper  was  dated  and  delivered  on  Sun- 
day. The  court  will  take  judicial  notice  of  the  fact 
that  the  date  of  the  paper  is  a  Sunday,^  and  all  parties 
to  the  contract  are  charged  with  notice  of  that  fact. 
Where,  however,  the  paper  is  delivered  on  Sunday,  but 
bears  a  different  date,  the  paper  is  only  void  as  to 
those  parties  who  take  it  with  knowledge  of  the  illegality. 
An  indorsee  for  value,  and  without    notice  of  its  delivery 


^  Drake  v.  Rogers,  32  Me.  524;  Lovejoy  v.  Whipple,  18  Vt.  379;  State 
Capitol  Bk.  w.  Thompson,  42  N.  H.  376;  Dohoney  v.  Dohoney,  7  Bush, 
217;  Aldridge  v.  Brauch  Bk.,  17  Ala.  45;  Flanagan  t).  Meyer,  41  Ala.  133; 
Txieber  v.  Commercial  Bank,  31  Ark.  128;  Fritscht?.  Heesless,  40  Mo.  55G; 
King  V.  Fleming,  72  111.  21;  Vinton  v.  Peck,  15  Mich.  287.  In  Indiana  it 
is  held  that  -where  a  note  is  delivered  on  Sunday  to  the  comaker  for  the 
payee,  it  will  be  void.     Davis  v.  Barger,  57  Ind.  55. 

2  Marsliall  v.  Russell,  44  N.  H.  509. 

3  Hilton  V.  Houghton,  35  Me.  143;  Winchell  v.  Carey,  115  Mass.  560; 
Clough  V.  Davis,  9  N.  H.  500;  Lovejoy  v.  Whipple,  18  Vt.  379;  Common- 
wealth V.  Kendig,  2  Pa.  St.  448;  King  v.  Fleming,  72  111.  21. 

4  Sayre  v.  Wheeler,  31  Iowa,  112;  I  Ames  on  N.  &  B.  352. 
*  Finney  v.  Callendar,  8  Minn.  41. 

91 


§    34(?  REQUISITES    OF    BILLS    AND    NOTES.  [CH.   II. 

OH  Sunday,  will  take  a  negotiable  paper  free  from  the  de- 
fense of  illegality.^ 

§  34(7.  Delivery  as  an  escrow. — It  is  generally  held 
that  a  negotiable  bill  or  note,  like  a  deed  of  conveyance 
or  bond,  may  also  be  delivered  as  an  escrow.  An  escrow 
is  usually  defined  as  a  legal  instrument,  delivered  to  a  third 
person  to  be  held  by  him  until  the  happening  of  a  certain 
condition  or  conditions,  Avhon  the  title  is  to  pass  to  the  per- 
son for  whom  it  is  intended.^  In  order  that  a  deed  may  be 
an  escrow,  it  must  be  delivered  to  a  stranger  to  hold  until 
the  condition  is  performed,  then  to  be  delivered  to  the 
"grantee.  If  the  delivery  is  made  to  the  grantee,  it  will  be 
an  absolute  delivery,  whatever  conditions  may  be  annexed 
thereto,  and  the  title  will  immediately  pass  to  the  grantee,^ 
And  this  is  generally  accepted  as  the  rule  in  respect  to  the 
delivery  of  commercial  paper  as  an  escrow,  except  that  it 
seems  not  to  be  necessary  in  this  case  to  make  a  sec- 
ond delivery  to  the  payee  or  indorsee.*  But  it  has  been 
held    in    I^ew  York  that  the    commercial   paper   may  be 

»  Pope  V.  Linn,  50  Me.  St;  State  Capital  Bk.  v.  Tliompson,  42  N.  H. 
370;  Cranson  v.  Goss,  107  Mass.  43D;  Greatliead  v.  Walton,  40  Conn.  81 ; 
Nelson  v.  Cowing,  20  Wend.  33<3;  Ball  v.  Powers,  62  Ga.  757;  Trieber  «. 
Commercial  Bank,  31  Ark.  128;  Clinton  Nat.  Bk.  v.  Graves,  48  Iowa,  228; 
Knox  r.  Clifford,  38  Wis.  651.  But  see,  contra,  Gilbert  r.  Vauchon,  69 
Ind.  372;  Parker  v.  Pitts,  73  Ind.  598. 

2  Tiedeman  on  Real  Property,  §  815. 

3  Fairbanks  v.  Metcalf,  8  Mass.  230;  Ward  v.  Lewis,  4  Pick.  520;  Gil- 
bert r.  N.  A.  F.  Ins.  Co.,  23  Wend.  43;  Worsallv.  Munn,  6  N,  Y.  229; 
Black  tJ.  Shreve,  13  N.  J.  458;  Moss  v.  Riddle,  5  Crauch,  351;  Cin.,  W. 
&  Z.  R.  R  Co.,  13  Ohio  St.  249;  M.  &  Ind.  Plunk  Road  Co.  v.  Stevens,  15 
Ind.  1;  State  v.  Chrisraau,  2  Ind.  126;  Foley  v.  Cowgill,  5  Blackf.  18; 
Blake  v.  Fash,  44  111.305;  Jane  ?•.  Gregory,  42  III.  416;  Fireman's  Ins. 
Co.  V.  McMillan,  29  Ala.  IGO.    See  Tiedeman  on  Real  Prop.,  §  815. 

*  Babcock  v.  Steadraan,  1  Root,  87;  Couch  v.  Meeker,  2  Conn.  302; 
Jones  V.   Shaw,    67  Mo.   667;    Massraau  r.  Ilolcher,  49  Mo.  87;  Scott  v. 
State  Bank,  9  Ark.  36;  Taylor  v.  Thomas   13  Kan.  217;  1   Parsons'  N.  & 
B.  51;  1  Daniel's  Negot.  Inst.,  §  68. 
92 


CH.   II.]       COMPONENT    PARTS    OF    BILLS    AND    NOTES.         §    Md 

delivered  to  the  payee,  and  yet  operate  as  an  escrow.  In 
announcing  the  opinion  of  the  court,  Folger,  J.,  said: 
*'  Instruments  not  under  seal  may  be  delivered  to  the  one 
to  whom  on  their  face  they  are  made  payable,  or  who  by 
their  terms  is  entitled  to  some  interest  or  benefit  under 
them,  upon  conditions,  the  observance  of  which  is  essential 
to  their  validity.  And  the  annexing  of  such  conditions  to 
the  delivery  is  not  an  oral  contradiction  of  the  written  ob- 
ligation, though  negotiable  as  between  the  parties  to  it,  or 
others  having  notice.  It  needs  a  delivery  to  make  the  obli- 
gation operative  at  all,  and  the  effect  of  the  delivery  and 
the  extent  of  the  operation  of  the  instrument  may  be  lim- 
ited by  the  conditions  with  which  the  delivery  is  made."  ^ 
This  apparent  contradiction  of  authorities  may  be  explained 
away  by  the  statement  that  there  cannot,  on  account  of  the 
peculiar  character  of  negotiable  paper,  be  any  true  deliv- 
ery of  it  as  an  escrow.  The  principal  characteristic  of  an 
escrow  deed  is  that  no  title  can  pass  to  the  grantee,  —  not 
even  in  favor  of  innocent  purchasers  for  value  of  the 
grantee,  — by  any  delivery  to  him,  except  upon  the  perform- 
ance of  the  condition;^  whereas,  a  deed,  like  any  other  legal 
instrument,  if  delivered  to  the  grantee  subject  to  certain  con- 
ditions will  be  an  absolute  delivery,  except  as  between  the 
original  parties,  and  subsequent  purchasers  with  notice  or 
without  consideration.^  But  this  distinction  between  a  con- 
ditional delivery  to  the  payee  and  a  delivery  as  an  escrow  to 

1  Benton  v.  Martin,  52  N.  Y.  574. 

2  Fairbanks  v.  Metcalf,  8  Mass.  230;  Souverbye  v.  Arden,  1  Johns. 
Cli.  240;  Hinman  v.  Booth,  21  Wend.  267;  People  v.  Bostwick,  32  N.  Y. 
450;  Stiles  v.  Brown,  16  Vt.  563;  Smith  v.  So.  Royalton  Bk.,  32  Vt.  341; 
Black  V.  Shreve,  13  N.  J.  458;  Jackson  v.  Sheldon,  22  Me.  569;  Blight 
V.  Schenck,  10  Pa.  St.  285;  Berry  v.  Anderson,  22  *nd.  40;  Illinois  Cent. 
R.  11.  Co.  V.  McCullagh,  59111.  170;  Chipmau  v.  Tucker,  38  Wis.  43  (20 
Am.  Rep.  1).    See  contra,  Rhodes  v.  Gardiner,  30  Me.  110, 

3  Ward  17.  Lewis,  4  Pick.  518;  Siraonton's  Est.,  4  Watts,  180;  Curriev. 
Donald,  2  Wash.  (Va.)  59;  Miller  v.  Fletcher,  27  Gratt.  403;  Duncan  v. 
Pope,  47  Ga.  445. 

93 


§    35  REQUISITES    OF    BILLS    AND    NOTES.  [CH.  II. 

a  tliird  person,  is  not  recognized  })y  many  of  the  cases  in  the 
law  of  commercial  paper.  In  both  instances  the  innocent 
purchaser  for  value  gets  a  good  title,  whether  the  condi- 
tions have  been  performed  or  not.^ 

§  35.  Bills  and  notes  executed  in  blank.  —  It  is  more 
or  less  common  for  bills  of  exchange  and  promissory  notes 
to  be  executed  in  blank,  and  delivered  to  another  to  fill  up 
and  negotiate,  for  the  benefit  of  the  maker,  or  for  his  own 
benefit.  There  is  no  need  for  any  second  delivery  by  the 
maker  after  the  completion  of  the  instrument.^  As  it  was 
stated  by  the  Supreme  Court  of  the  United  States,  "  where 
a  party  to  a  negotiable  instrument  intrusts  it  to  the  custody 
of  another,  with  blanks  not  filled  up,  whether  it  be  for  the 
purpose  to  accommodate  the  person  to  whom  it  was  in- 
trusted, or  to  be  used  for  his  own  benefit,  such  negotiable 
instrument  carries  on  its  face  an  implied  authority  to  fill  up 
f  the  blanks  and  perfect  the  instrument;  and  as  between  such 
party  and  innocent  third  parties,  the  person  to  whom  it  was 
intrusted  must  be  deemed  the  agent  of  the  party  who  com- 
mitted such  instrument  to  his  custody,  —  or  in  other 
words,  it  is  the  act  of  the  principal  and  he  is  bound  by  it."  ^ 

1  1  Parsons' N.  &B.  51;  Babcock  v.  Steadman,  1  Root,  87;  Massman  ?;. 
Holcher,  49  Mo.  87;  Jones  v.  Shaw,  G7  Mo.  GG7;  Scott  v.  State  Bk.,  9 
Ark.  30.  See  contra,  Chipmau  v.  Tucker,  38  Wis.  43;  Roberts  v.  McGrath, 
38  Wis.  52;  Roberts  v.  Wood,  38  Wis.  60.     See  post,  §  28G. 

2  Usher  v.  Dauncey,  4  Camp.  97;  Rowell  v.  DufiE,  3  Camp.  182;  Bulkley 
V.  Butler,  2  B,  &  C.  425;  Androscoggin  Bk.  v.  Kimball,  10  Cush.  373;  Ives 
V.  Farmers'  Bk.,  2  Allen  23G;  Michigan  Ins.  Co.  v.  Leavenworth,  30  Vt. 
11;  Hardy  v.  Norton,  GG  Barb.  527;  Mahone  v.  Central  Bank,  17  Ga.  Ill; 
Waldron  v.  Young,  9  Heisk.  777;  Nichol  v.  Bate,  10  Yerg.  429;  Common- 
wealth V.  Curry,  2  Dapa,  142 ;  Bk.  of  Limestone  v.  Perrick,  5  T.  B.  Mon. 
25;  Fullerton?7.  Sturgiss,  4  Ohio  St.  520;  Rich  v.  Starback,  51  Ind.  87; 
Coburn  V.  Webb,  56  Ind.  96;  Snyder  v.  Van  Doren,  46  AVis.  602;  Joseph 
V.  Nat.  Bk.,  17  Kan.  259;  Davidson  v.  Lamier,  4  Wall.  457;  Angle  v.  N. 
W.,  etc.,  Ins.  Co.,  92  U.  S.  330. 

8  Bank  of  Pittsburg  v.  Neal,  22  How.  (U.  S.)  107. 

94 


CH.   II.  J       COMPONENT    PARTS    OF    BILLS    AND    NOTES.  §    35 

But  the  ■  rule  is  different  iu  regard  to  sealed  instruments. 
Since  it  requires  a  power  of  attorney  under  seal  for  an 
agent  to  execute  and  deliver  a  bond  or  deed,  a  mere  parol 
authority  to  him  to  fill  up  the  blanks  in  the  bond  or  deed 
and  to  deliver  it  to  the  person  for  whom  it  was  intended, 
will  not  pass  title  to  such  person.  The  agent  must  either 
have  an  authority  under  seal,  or  the  perfected  instrument 
must  be  delivered  by  the  maker  himself.^  Many  of  the 
American  courts,  following  the  overruled  English  case  of 
Texira  v.  Evans, ■^  hold  that  an  agent  may  on  a  parol 
authority  execute  and  deliver  a  bond  or  deed,  that  has  been 
handed  to  him  iu  blank. ^  But  whatever  maybe  the  correct 
rule  in  respect  to  sealed  instruments  generally,  it  is  well 
settled  that  "  coupon"  bonds  and  other  bonds,  which  are 
now  included  under  the  heading  of  commercial  paper  or 
negotiable  instruments,  may,  like  bills  and  notes,  on  a 
parol  authority,  be  delivered  in  blank  to  an  agent  to 
be  filled  up   and   delivered  to  the  proper  person  by  him.* 

1  Hibblewhite  v.  McMowrie,  6  Mees.  &  W.  200;  Enthorer  v.  Hoyle,  9 
Eng.  L.  &Eq.  434;  Pruston  w.  Hull,  23  Gratt.  602;  Penn  v.  Hamlet,  27 
Gratt.  337 ;  Davenport  v.  Sleight,  2  Dev.  &  Bat.  L.  381 ;  Bland  v.  O'Hagan, 
64  N.  C.  471;  Burden  v.  Sutherland,  70  N.  C.  528;  Burns  v.  Lynde,  6  Allen, 
305;  Basford  v.  Pearson,  9  Allen,  388;  Vose  v.  Dolau,  108  Mass.  159; 
Chauncey  v.  Arnold,  24  N.  Y.  330;  Ingram  v.  Little,  14  Ga.  174;  Gilbert 
V.  Anthony,  1  Yerg.  69;  Williams  v.  Crutcher,  6  Miss.  71 ;  Viser  v.  Rice, 
83  Tex.  130;  Cross  v.  State  Bank,  5  Ai'k.  525;  Cummings  v.  Cassity,  5  B. 
Hon.  74;  Conoverv.  Porter,  14  Ohio,  450;  Simms  v.  Harvey,  19  Iowa,  290; 
People  V.  Organ,  27  111.  29 ;  Mans.  v.  Worthing,  3  111.  28 ;  Upton  v.  Archer, 
41  Cal.  85. 

2  1  Anstr.  228. 

^  Inhabitants,  etc.,  v.  Huntress,  53  Me.  90;  McDonald  v.  Egglestou, 
20  Vt.  161;  Woolley  v.  Constant,  4  Johns.  60;  Ex  parte  Decker,  6  Cow. 
GO :  Ex  parte  Kerwin,  8  Cow.  118 ;  Wiley  v.  Moor,  17  Serg.  &  R.  438 ;  Duncan 
V.  Hodjes,  4  McCord,  239;  Gouslin  v.  Commander,  etc.,  6  Rich.  497;  Field 
V.  Stagg,  52  Mo.  534;  Van  Etta  v.  Evanson,  28  Wis.  33;  Devin  v.  Himer, 
29  Iowa,  301 ;  Owen  v.  Perry,  25  Iowa,  412. 

*  White  V.  Vermont,  etc.,  R.  R.  Co.,  21  How.  575;  Preston  v.  Hall,  23 
Grat.  613.    See  post,  chapter  on  Coupon  and  Municipal  Bonds. 

95 


CHAPTER,  III. 


AGREEMENTS    CONTROLLING  THE    OPERATION    OF   BILLS  AND 

NOTES. 

Section  40,  Kinds  of  agreements. 

41.  Memoranda. 

41a.  Effect  of  memoranda. 

42.  Collateral  agreements. 

43.  Agreements  to  renew. 

§  40.  Kinds  of  agreements. —  Agreements,  which  are 
intended  to  control  the  operation  of  bills  and  notes,  are  of 
two  principal  kinds,  viz :  memoranda  on  the  face  or  back  of 
the  instruments,  and  collateral  or  independent  agreements. 
The  principal  legal  difference  between  the  two  kinds  lies  in 
the  fact,  that  the  memorandum  when  inscribed  on  the  paper 
itself  will  furnish  actual  or  constructive  notice  of  itself  to 
all  subsequent  holders,  and  hence  will  control  the  operation 
or  character  of  the  bill  or  note,  into  whosoever  hands  it  may 
come.^  Whereas  collateral  agreements  can  only  control 
the  operation  of  the  instrument  as  to  those  parties  to  it, 
who  have  received  actual  notice  of  their  existence.  There 
can  be  no  constructive  notice  of  such  an  agreement,  for 
nothing  of  it  appears  in  the  body  of  the  negotiable  instru- 
ment. 

§  41.  Memoranda. — It  is  not  every  memorandum  which 
will  be  held  to  be  a  part  of  the  negotiable  instrument ;  only 
those  which  by  their  terms  are  evidently  designed  to,  and 
actually  do,  affect  the  character,  and  control  the  operation 

1  Perry  u.  Bigelow,  128  Mass,  129;   Gift?;.  Hall,  1  Humph.  480;  Hat- 
lleJd  u.  Griffith,  1  Lee  (Tenn.),  301 ;  2  Parsons'  N.  &  B.  539. 
9() 


CH.  III.]     AGllEEMENTS  CONTROLLING  lULLS  AND  NOTES.     §   41 

of  the  instrument.  It"  the  memorandum  is  of  such  content 
that  it  could  only  have  been  intended  as  an  aid  to  the 
memory  of  the  holder  or  maker,  to  identify  the  instrument 
itself  or  its  source  and  consideration ;  or  where  the  memo- 
randum is  a  direction  to  the  holder's  own  agents  or  personal 
representatives  what  to  do  with  the  paper,  it  will  not  be 
allowed  to  become  a  part  of  the  instrument  and  cannot 
therefore  chano;e  or  alter  its  character.^  Nor  can  the 
memorandum  be  treated  as  a  part  of  the  instrument,  where 
it  is  so  ambiguous  and  repugnant  to  the  other  contents  of 
the  instrument  that  parol  evidence  is  necessary  to  explain 
its  import,  for  parol  evidence  is  never  admissible  to  alter 
oi'  vary  the  terms  of  a  written  contract. ^  But  with  these 
limitations,  any  memorandum,  written  in  any  part  of  the 
bill  or  note,  on  its  face,  will  constitute  a  part  of  the  instru- 
ment, and  control  its  operation.^ 

In  all,  or  almost  all,  of  these  cases,  the  memoranda  were 
written  on  the  margins  of  the  face  of  the  paper.     But  such 


1  Stone  V.  Metcalf,  i  Camp.  217;  Brill  v.  Crick,  1  M.  &  \V.  232;  Fitch 
V.  Jones,  5  EI.  &  B.  (85  E.  C.  L.  R.)  238;  Odiorne  v.  Sargent,  6  N.  H. 
401 ;  Benedict  v.  Cowden,  49  N.  Y.  402. 

2  Heywood  v.  Perrin,  10  Pick.  228;  Way  v.  Batchelder,  129  Mass.  361; 
Krouskop  V.  Shoutz,  51  Wis.  204. 

»  Warrington  v.  Early,  2  El.  &  Bl.  (75  E.  C.  L.  R.)  763,  memorandum 
incomer  "  with  lawful  interest;"  "  one-half  payable  in  twelve  months, 
the  balance  in  twenty-four  mourths."  Heywood  v.  Perrin,  10  Pick.  228; 
payable  in  "foreign bills,"  Jones  v.  Fales,  4  Mass.  254;  payment  not  to 
be  fwrce^l  before  a  certain  time,  Eranklyn  Sav.  Inat.  v.  Reed,  125  Mass. 
365;  Springfield  Bank  v.  Merrick,  14  Mass.  322;  Costello  v.  Crowell,  127 
Mass.  293  (  "  given  as  collateral  security  with  agreement  ") ;  Johnson  v. 
Heagau, 23Me.  329;  Henry  w.  Colman,  5  Vt.  403;  "payable  in  fulled  cloth 
one  year  from  the  month  of  October  next,"  Fletcher  v.  Blodgett,  16  Vt. 
26;  Benedict  w.  Cowden,  49  N.  Y.  402;  Dewey  v.  Reed,  40  Barb.  21 ;  "  if 
the  machine  should  not  be  delivered  this  note  not  to  be  paid,"  Wait  v. 
Pomeroy,  20  Mich.  425;  State  v.  Stratton,  27  Iowa,  424.  "  Ints.  at  12J  per 
cent,"  Hatfield  v.  Griflith,  1  Lea  (Teuu.),300-  ''Brandon  money,"  Giftu. 
Hall,  1  Humph.  480;  payable  only  on  the  happening  of  a  certain  event, 
Effinger  v.  Richards,  35  Miss.  540. 

97 


§   41     AGREEMEXTS  COXTROLLIX(J  HILLS  AXD  XOTES.     [CH.  Ill, 

mcinor;uuIiuii,  nevertheless,  *'  forms  part  of  the  contract. 
It  would  clearly  have  been  so  if  it  had  been  written  in  the 
bod}' of  the  note,  and  we  think  a  memorandum  of  this  kind 
written  in  the  corner  of  the  note  is  equally  part  of  the  con- 
tract, because  the  contract  must  be  collected  from  the  four 
corners  of  the  document,  and  no  part  of  what  appears 
there  is  to  be  excluded."  ^  But  the  memoranda,  wliich  are 
intended  to  control  the  character  and  operation  of  the 
instrument, need  not  be  on  its  face.  Although  there  are 
some  early  cases  in  New  York  to  the  contrary, ^  the  weight 
of  authority  in  this  country,  as  well  as  in  England,  is  in 
favor  of  recognizing,  as  part  of  the  instrument  and  as 
controlling  its  operation,  every  memorandum  which  can  af- 
fect its  character,  whether  it  is  written  on  the  face  or  on 
the  back  of  the  paper.  No  difference  is  recognized  in  their 
legal  effect.  It  has  been  very  generally  held,  that  memo- 
randa on  the  back  of  the  instrument  constitute  a  part  of 
it,  that  "  the  purport  of  the  instrument  is  not  only  to  be 
collected  from  '  the  four  corners,'  but  from  '  the  eight  cor- 


ners. 


■'    3 


1  Lord  Campbell,  C.  J.,  in  Warrington  v.  Early,  2  El.  &  Bl.  (75  E.  C. 
L.  R.)  703. 

2  Sanders  v.  Bacon,  8  Johns.  485;  Tappan  v.  Ely,  15  Wend.  363.  The 
later  cases  place  New  York  in  a  line  with  the  other  courts.  See  next 
note. 

^  1  Daniel's  Negot.  Inst.,  §  151;  note  made  payable,  by  memorandum 
on  back,  whenever  maker  is  able,  Barnard  v.  Gushing,  4  Mete.  231 ;  "  the 
within  note  is  given  for  securing  certain  floating  advances,"  Cholraelcy 
V.  Darley,  14  M.  &  W.  344;  condition  providing  for  certain  deductions  on 
a  certain  contingency,  Henry  v.  Colman,  5  Vt.  402;  payment  not  to  be 
demanded  until  a  certain  mill  was  sold,  Blake  v.  Coleman,  22  Wis.  416; 
"  payable  in  wheat  at  ninety-five  cents  a  bushel,"  Polo.  Maufg.  Co.  v. 
Parr,  8  Neb.  379;  "payable  at  the  Bank  of  America,"  Woodworth  v. 
Bank  of  America,  19  Johns.  391;  "the  above  note  to  be  paid  f  I'om  the 
profits  of  machines  when  sold,"  Benedict  v.  Cowdeu,  49  N.  Y.  396;  "in- 
terest to  be  paid  semi-annually,"  Dewey  v.  Reed,  40  Barb.  17;  Farmers' 
Bk.  V.  Ewing,  78  Ky.  26G;  Leeds  v.  Lancashire,  2  Camp,  205;  Hartley  v, 
Wilkinson,  4  Camp.  127. 
08 


CH.  III.]   AGREEMENTS  CONTROLLING  BILLS  AND  NOTES.    §  41a 

§  41a.  Effect  of  memoranda.  —  If  the  memorandum  is 
made  contemporaneously  with  the  execution  of  the  instru- 
ment, it  clearly  becomes  a  constituent  of  it;  and  in  constru- 
ing the  legal  effect  of  the  instrument,  and  determining  its 
character,  the  memorandum  must  be  considered  in  connec- 
\tion  with  the  rest  of  the  writing.  It  is  always  presumed, 
in  the  absence  of  evidence  to  the  contrary,  that  the  memo- 
randa were  made  at  the  time  that  the  paper  was  executed, 
or  before  delivery.^  There  may  be  some  doubt,  whether 
memoranda  on  the  back  may  be  presumed  to  have  been 
made  before  delivery,  and  Prof.  Parsons  says  "  it  has  been 
held  that  words  written  on  the  back  of  a  note  are  no  part  of 
the  body  thereof,  prima  facie,  but  are  presumed  to  be 
done  after  the  note,  is  completed.^"  In  Mississippi,  it  has 
been  held  that  all  memoranda,  whether  on  the  face  or  on 
the  back,  should  be  presumed  to  have  bean  made  after  the 
note  had  been  executed.  "  If  such  memoranda  are  at  the 
foot  or  on  the  back  of  the  note  or  other  instrument  when 
executed,  they  constitute  a  part  of  the  contract.  But  being 
disconnected  from  the  body  of  the  instrument  to  which  the 
maker's  name  is  signed,  it  forms  no  original  part  of  it,  un- 
til shown   to  have  been  upon  it  when  executed."  ^ 

It  is  clear  that  such  a  memorandum  was  added  after  the 
instrument  had  been  written  out,  but  there  is  nothing  on 
the  face  of  the  paper  to  indicate  whether  it  was  added  before 
or  after  delivery ;  and  since  its  legality  would  be  more  cer- 
tain, if  it  were  added  before  delivery,  it  is  but  reasonable  for 
the  courts  to  presume  that  it  was  added  at  that  time.  When, 
and  under  what  circumstances  the  memoranda  were  made, 
are  questions  of  fact  for  the  jury.*     But  if  the  memoran- 

'  Tuckerman  v.  Martwell,  3  Greenl.  147;  Jones  v.  Tales,  4  Mass.  253; 
Hemy  v.  C©lraan,  5  Vt.  402;  Fletcher  v.  Blodgett,  16  Vt.  26;  Leeds  w. 
Lancashire,  5  Maul.  &  Sel.  25;  Harvey  v.  EfEnger,  35  Miss.  552. 

2  2  Parsons'  N.  &  B.  544. 

3  Sirarall,  J.,  iu  Buy  v.  Sprader,  50  Miss.  330. 
*  Makepeace  v.  Harvard  College,  10  Pick.  303. 

99 


§   42     AGKEEMEXTS  CON'TUOr.MNC  lUI.LS  AND  NOTES.     [CII.  III. 

duni  is  added  to  the  paper,  alter  it  has  been  negotiated,  the 
effect  of  it  will  depend  upon  the  circumstances.  If  it  is 
made  with  the  consent  of  all  parties,  it  controls  the  opera- 
tion of  the  instrument  in  the  same  manner  as  if  it  had  been 
added  before  delivery;  if  it  was  added  by  a  stranger,  it 
will  be  treated  as  surplusage,  and  have  no  effect  upon  the 
character  of  the  instrument.  But  if  the  memorandum  is 
made  by  the  holder,  and  without  the  consent  of  the  other 
parties,  it  is  an  alteration,  which  if  material  will  avoid  the 
instrument.^ 

§  42.  Collateral  agreements,  —  may  be  either  contem- 
poraneous or  subsequent.  If  it  is  contemporaneous,  the 
agreement  must  be  in  writing ;  for  otherwise  the  rule  of 
evidence  would  be  violated,  which  prohibits  the  admission 
of  parol  evidence  to  vary  or  control  the  terms  of  a  written 
instrument  ,2  unless  the  parol  evidence  is  intended  to  show 
that  by  accident,  fraud  or  mistake,  the  agreement  was  un- 
intentionally omitted  from  the  body  of  the  instrument.^ 
The  contemporaneous  agreement  must  be  construed  as  a 
part  of  the  instrument,  at  least  as  between  the  original 
parties  and  all  others  who  take  the  negotiable  instrument 
with  notice  of  the  agreement.*  Subsequent  agreements, 
whose  terms  change  those  of  the  commercial  paper,  already 

1  See  post,  chapter  on  Forgeries  and  Alterations,  for  a  full  discussion 
of  the  subject  of  alterations. 

-  2  Hoare  v.  Graham,  3  Camp.  57;  Gibbon  v.  Scott,  2  Stark.  286;  Ab- 
bott V.  Hendricks,  1  M.  &  G.  (39  E.  C.  L.  R.)  795;  Grafton  Bank  u. 
Woodward,  5  N.  H.  99;  Hill  v.  Gaw,  4  Barr,  493;  Fleming  v.  Gilbert,  3 
Johns.  520. 

8  Miller  v.  Henderson,  10  Serg.  &,  R.  290 ;  Renshaw  v.  Gaus,  7  Barr, 
117. 

*  In  Muzzy  v.  Knight,  8  Kan.  456,  an  agreement  in  a  mortgage,  that 
interest  should  be  paid  annually,  was  held  to  control  the  effects  of  the 
note,  to  secure  which  the  mortgage  was  given.  See  also  Meyer  v. 
Graeber,  19  Kan.  165;  Dobbins  v.  Parker,  46  Iowa,  358;  Cuthbert  u. 
Bowie,  10  Ala.  1C3. 

100 


CH.  III.]  '  AGREEMENTS  COXTROLLING  BILLS  AND  NOTES.     §   43 

delivered,  partake  of  the  nature  of  novations;  and  if  they 
are  based  upon  a  sufficient  consideration,  they  will  control 
the  operation  of  the  paper,  although  they  may  be  oral  agree- 
ments.^ ^Vhere  the  subsequent  agreement  operates  as  a 
substitute  contract  for  the  note  or  other  instrument,  its 
performance  will  operate  as  a  complete  discharge  of  the 
note. 2  But  as  long  as  the  agreement  remains  executory, 
it  can  have  no  effect  upon  the  note ;  and  it  has  been  held 
that  a  failure  to  carry  out  the  agreement  furnishes  only  an 
independent  action  for  damages,  and  cannot  serve  as  a  de- 
fense to  the  action  on  the  note.^  But  this  rule  is  no  doubt 
dependent  now  upon  the  provisions  of  the  local  laws  of 
pleading,  and  the  breach  of  such  an  agreement  will  now  be 
a  good  defense  to  the  action  on  the  note,  at  least,  in  the 
code  States,  as  a  counter-claim. 

§  43.  Agreements  to  renew.  —  The  most  frequent  col- 
lateral agreement  in  practice  is  the  agreement  to  renew  the 
note  or  bill.  It  may  be  either  contemporaneous  or  subse- 
quent. If  contemporaneous,  it  must  be  in  writing,  and  if 
subsequent,  it  must  be  supported  by  an  independent  con- 
sideration. In  such  cases  the  ao-reement  would  be  bindinof 
upon  the  payee  and  any  holder,  who  took  the  paper  with 
notice  of  the  agreement.*  But,  unless  it  expressed  the 
number  of  times  that  the  paper  may  be  renewed,  it  w^ill  be 
presumed  that  only  one  renewal  was  intended.^ 

1  Low  V.  Treadwell,  12  Me.  441 ;  Dow  v.  Tuttle,  i  Mass.  414;  Allen  v. 
Furbish,  4  Gray,  504;  Solomons  v.  Jones,  3  Brev.  54;  Heaton  v.  Myers, 
4  Col.  Co;  Newton  v.  Jackson,  23  Ala.  335. 

-  Grossman  v.  Fuller,  17  Pick.  171. 

3  Dow  V.  Tuttle,  4  Mass.  414;  Kelso  v.  Frye,  4  Bibb,  493.  Contra, 
Grafton  Bank  v.  Woodward,  5  N.  H.  99;  Erwin  v.  Saunders,  1  Cow.  249. 

^  Innes  v.  Munro,  1  Exch.  473;  Bowerbank  v.  Monteiro,  4  Taunt.  844; 
McManus  v.  Bark,  5  L.  R.  Ex.  65. 

=  Innes  v.  Munro,  1  Exch.  473. 

101 


CHAPTER    ly. 

PERSONS  INCAPACITATED  TO  BECOME   PARTIES  TO  COMMER- 
CIAL PAPER. 

Section  46.  Disability  of  infants  —  Liability  for  necessaries. 

47.  Infant's  contracts,  voidable,  iiot  void. 

48.  An  infant's  notes  and  bills. 

49.  Infant  as  payee  and  iudorser. 

50.  Ratification  of  infant's  bills  and  notes. 

51.  Joint  note  or  bill  of  infant  and  adult. 

52.  Lunatics  and  imbeciles. 

53.  Effect  of  insanity,  when  unknovrn  to  other  party. 

54.  Lunatic's  contracts  for  necessaries. 

55.  Ratification  of  lunatic's  contracts. 

56.  Lunatic  as  payee  and  indorser. 

57.  The  contracts  of  drunken  persons. 

58.  The  disability  of  all  persons  under  guardianship  —  Spend- 

thrifts. 

59.  Disability  of    coverture  —  Commercial  paper   of    married 

women. 

60.  Effect  of  marriage  on  ante-nuptial  notes  and  bills. 

61.  Exceptions  to  married  woman's  contractual  disability. 

62.  Commercial  paper  of  married  women  with  separate  estate. 

63.  Married  woman  as  payee  and  indorser. 

64.  Reduction  of  wife's  choses  in  action  to  possession. 

65.  The  bankrupt  or  insolvent  payee. 

66.  Alien  enemies  as  parties  to  commercial  paper. 

§  46.  Disability  of  Infants  —  Liability  for  neces- 
saries. —  PersoiLS  under  a  certain  age  are  called  minors  or 
infants,  and  because  of  their  immaturity  of  mind  the  law 
takes  away  from  them  the  power  to  make  contracts, 
except  for  necessaries.  The  age  of  majority  in  all  of  the 
United  States  for  males,  and  in  most  of  the  States  for 
females,  is  twenty-one  years,  and  this  was  the  common-law 
rule  in  England.  But  in  some  of  the  States,  the  majority 
102 


CH.  IV.]  PERSONS    INCAPACITATED.  §    4(> 

of  females  is  placed  by  statute  at  eighteen.^  An  infant's 
contract  for  necessaries  is  binding  upon  him,  so  far  that  he 
may  be  compelled  to  pay  for  their  value;  but  he  is  not 
bound  for  the  contract  price.  His  liability  for  necessaries 
is  rather  imposed  by  the  law,  than  by  his  contract.^ 
To  the  question,  what  are  necessaries,  it  may  be  replied, 
that  whatever  in  reason  the  infant  needs  for  his  main- 
tenance, shelter,  education  and  comfort,  regard  being  had 
to  his  means  and  social  standing,  would  be  held  by  the  law 
to  be  necessaries.^  And  where  the  infant's  means  are  con- 
siderable, articles  which  are  useful,  but  which  are  ordinarily 
considered  to  be  luxuries,  unnecessary  to  the  comfort  of  a 
child,  such  as  a  watch,  ahorse,  or  a  valet,  etc.,  may,  never- 
theless, in  special  cases  be  treated  as  necessaries,  for  which 
the  infant  Avill  be  liable  on  a  quantum  meruit,^ 

But  money,  whether  or  pleasure  for  business  enterprises, 
is  never  a  necessary,  and  therefore  one  who  lends  money  to 
an  infant  cannot  recover  it  as  a  necessary,  even  though  the 

1  1  Parsons' Contracts,  294 ;  Bishop  on  Contracts,  §893;  Cogelu.  Raph, 
24  Minn.  194.     See  Dent  v.  Cock,  65  Ga.  400. 

2  Hyer  v.  Hyatt,  3  Crancli  C.  C.  276;  Robinson  v.  Weeks,  56  Me.  102; 
Stone  V.  Dennison,  13  Pick.  1 ;  Earle  v.  Reed,  10  Met.  387;  Gay  v.  Ballou, 
4  Wend.  493;  Commonwealth  v.  Hantz,  2  Pa.  333;  Hyman  v.  Cain,  3 
Jones  (N.  C),  111 ;  Bonchell  v.  Clary,  3  Brev.  194;  Morton  v.  Steward,  5 
Bradw.  533. 

2  Burghart  v.  Angerstein,  6  C.  &  P.  690;  Peters  v.  Fleming,  6  M.  &  W. 
42;  Ryder  v.  Wombwell,  L.  R.  4  Ex.  32;  Angel  v.  McLellan,  16  Mass.  28; 
Hoyt  V.  Casey,  114  Mass.  397;  Strong  v.  Foote,  42  Conn.  203;  Wailing  u. 
Toll,  9  Johns.  141;  Gay  v.  Ballou,  4  Wend.  403;  Werner's  Appeal,  10 
Norris  (Pa.),  222;  Anderson  v.  Smith,  33  Md.  465. 

*  "  From  the  earliest  time  down  to  the  present,  the  word  '  necessaries ' 
was  not  confined  in  its  strict  sense  to  such  articles  as  were  necessary  to 
the  support  of  life,«but  extended  to  articles  fit  to  maintain  the  particular 
person  in  the  state,  station  and  degree  in  life  in  which  he  is."  Parke, 
B.,  in  Pertes  v.  Fleming,  6  M.  &  W.  46;  Berolles  v.  Ramsay,  Holt  N.  P. 
77 ;  Hart  v.  Prater,  1  Jur.  623 ;  Hands  v,  Slaney,  8  T.  R.  578 ;  Brooker  v. 
Scott,  11  M.  &  W.  67;  Merriam  v.  Cunningham,  11  Cush.  40;  Davis  v. 
Caldwell,  12  Cush.  512. 

103 


§  47  PERSONS  IXCAPAC  ITATED.  [cH.  IV 

money  be  afterwards  spent  for  necessaries.^  So,  also,  will 
goods,  furnished  to  an  infant  to  carry  on  some  mercantile  or 
other  business,  not  be  considered  necessaries,  Avhose  vahie  can 
be  recovered  of  the  infant.^  But  where  the  infant  is  in  charge 
of  his  property,  under  the  hiw,  it  is  generallj^  held  that  he 
is  so  far  relieved  of  his  disability  as  to  be  able  to  contract 
for  whatever  is  needed  in  the  care  and  management  of  his 
property.  Ordinarily  his  guardian  would  be  authorized  to 
make  such  contracts  in  his  behalf.^  But  in  no  case  can  a 
tradesman  recover  of  an  infant  for  necessaries,  when  the 
infant  is  already  supplied  with  them  from  some  other 
source;  the  tradesman  always  acts  at  his  peril  in  such  cases, 
if  he  fjiils  to  make  inquiries  after  the  condition  of  the  infant.* 

§  47.  Infant's  contracts  voidable,  not  void.  —  Since 
the  disability  is  imposed  upon  the  infant  for  his  own  benefit 
and  protection,  and  not  in  pursuance  of  any  public  policy, 
his  contracts,  of  any  kind,  whether  they  be  under  seal  or 

1  Darbet;.  Boucher,  1  Salk.  279;  Earle  v.  Peale,  1  Salk.  386;  s.  c.  10 
Mod.  67;  Randall  v.  Sweet,  1  Denio,  460;  Price  v.  Sanders,  60  Ind.  310. 
But  if  the  infant  requests  a  third  person  to  pay  for  the  necessaries  he 
has  already  bought,  or  is  about  to  buy,  he  is  obliged  to  repay  the  money 
so  expended.  Clarke  w.  Leslie,  5  Esp'.  28;  Swift  v.  Bennett,  10  Cush. 
436;  Conn  v.  Coburn,  7  N.  H.  368;  Smith  v.  Oliphaut,  2  Saudf.  306;  Haine 
V.  Torrant,  2  Hill  (S.  C),  400. 

2  Warwick  V.  Bruce,  2  M.  &  S.  205;  Why  wall  v.  Champion,  2  Stra. 
1083;  Dilk  v.  Keighley,  2  Esp.  480;  Mason  v.  Wright,  13 -Met.  306;  Smith 
V.  Kelley,  13  Met.  309;  Lowe  v.  Griffith,  1  Scott,  458;  Decell  v.  Lewen- 
thal,  57  Miss.  331. 

3  Hallr.  Butterfield,  59  N".  H.  354;  Bartlett  v.  Bailey,  59  X.  H.  408; 
Rundell  v.  Keeler,  7  Watts,  237;  Watson  v.  Ilensel,  7  Watts,  344;  Tupper 
V.  Caldwell,  12  Met.  559;  Price  v.  Sanders,  60  Ind.  310;  Mathes  v. 
Doijschuetz,  72  111.  438;  Dillon  v.  Bowles,  77  Mo.  603;  Epperson  v. 
Nugent,  57  Miss.  45;  Chapman  v.  Hughes,  61  Miss.  339;  HuSv.  Bournell, 
48  Ga.  338. 

*  Barnes  v.  Toye,  13  Q.  B.  D.  410;   Story  v.  Pery,  4  C.  &  P.  526:   Cook 
V.  Deaton,  3  C.  &,  P.  114  ;   Hoyt  v.  Casey,  1 14  Mass.  397  :  Joluisou  v.  Lines, 
6  Watts  &  S.  80;   Kraker  v.  Byrura,  13  Rich.  163;  Nicholson  v.  Wilborn, 
13  Ga.  467;  Nichol  v.  Steger,  6  I.ea  393. 
104 


CH,  IV.]  PEKS0^3    INCAPACITATED.  §    47 

parol,  with  the  exception  of  those  for  necessaries,  just  ex- 
plained, are  not  absolutely  void,  but  only  voidable  at  his  elec- 
tion, and  may  be  enforced  against  the  adult  party .^  It  has 
been  held  that  when  a  contract  is  clearly  prejudicial  to  the 
interests  of  the  infant,  it  is  absolutely  void.^  But  the 
authorities  are  not  unanimous,  many  holding  that  all  the 
infant's  contracts  are  voidable  only,^  and  perhaps  the  only 
foundation  for  the  doctrine  that  the  infant's  contracts  may 
be  held  to  be  void,  when  clearly  prejudicial  to  him,  is  that 
the  courts  will  during  infancy  avoid  the  contract,  and 
secure  a  restitution  of  the  property  parted  with  under  the 
contract,  whenever  such  intervention  is  absolutely  neces- 
sary for  the  infant's  protection. 

It  is  generally  held  that  an  infant's  power  of  attorney 


1  Bruce  v.  Warwick,  6  Taunt.  118;  Warwick  v.  Bruce,  2  M.  &  S.  205; 
Holt  V.  Clarencieux,  2  Stra.  937;  Nightingale  v.  Withiugton,  15  Mass. 
272;  Thompson  i'.  Hamilton,  12  Pick.  425;  Irvine  v,  Irvine,  9  Wall.  617; 
Baker  «.  Lovett,  6  Mass.  78;  Edgerton  v.  Wolf,  6  Gray,  453;  Judkins  v. 
Walker,  17  Me.  38;  Tliomas  v.  Dike,  11  Vt.  273;  Hoxie  v.  Lincoln,  25  Vt. 
206;  Kendall  v.  Lawrence,  22  Pick.  540;  Hunt  v.  Peake,  5  Cow.  475; 
Willard  v.  Stone,  7  Cow.  22;  Bool  v.  Mix,  17  Wend.  119;  Wallaces. 
Lewis,  4  Harr.  (Del.)  75;  Allen  v.  Poole,  54  Miss.  323;  Haynes  v.  Slack, 
32  Miss.  193;  Bingham  v.  Barley,  55  Tex.  281;  Chapman  v.  Cliapman, 
13  Ind.  396;  Harrod  v.  Myers,  21  Ark.  502;  Ferguson  v.  Bell,  17 
Mo.  347;Lowe  v.  Sinklear,  27  Mo.  308;  West  v.  Penny,  16  Ala.  186; 
Eureka  Co.  v.  Edwards,  71  Ala.  248;  Francis  v.  Felmit,  4  Dev.  &  Bat. 
498;  Mustard  v.  Wohlford,  15  Gratt.  329;  Jenkins  v.  Jenkins,  12  Iowa, 
195. 

2  Lumsden's  Case,  4  Ch.  Ap.  31;  Robinson  v.  Weeks,  56  Me.  102"; 
Oliver  v.  Houdlet,  13  Mass.  237;  Owen  v.  Long,  112  Mass.  403;  Swafeord 
T.  Ferguson,  3  Lea,  292;  French  v.  McAndrew,  61  Miss.  187;  Reg.  i). 
Lord,  12  Q.  B.  757;  Fisher  v.  Mowbray,  8  East,  330. 

3  Hyer  v.  Hyatt,  3  Cranch  C.  C.  276;  Fetrow  v.  Wideman,  40  Ind.  148; 
Flexner  v.  Dickerson,  72  Ala.  318.  It  has  been  held  that  an  infant's  con- 
tract of  suretyship  is  absolutely  void,  because  it  cannot  possibly  be 
beueiicial  to  him.  Maples  v.  Wrightman,  4  Conn,  376.  But  it  has  been 
•decided  differently  in  the  other  courts.  Owen  v.  Long,  112  Mass.  403; 
Williams  v.  Harrison,  US.  C.  112;  Harner  v.  Dipple,  31  Ohio  St.  72; 
t'etrow  V.  Wiseman,  40  Ind.  148. 

105 


§    48  PER^^O^•S    INCArACITATED.  [CH.  IV. 

under  seal  is  absolutely  void.^  And  there  are  Bome  author- 
ities which  deny  that  the  infant  can  appoint  an  agent  for 
any  purpose,  all  his  acts  by  his  agent  being  not  merely 
voidable,  but  absolutely  void.^  But,  perhaps,  the  weight 
of  authority  is  in  favor  of  conceding  to  the  infant  the  same 
measure  of  power  to  act  by  an  agent,  as  by  himself,  his 
powers  of  attorney  being  held  to  be  voidable  only  and  not 
void.  And  this  doctrine  has  been  frequently  applied  to  the 
signing  of  ])romissory  notes  and  other  commercial  paper.^ 

§  48.  An  infant's  notes  and  bills.  —  It  is  plain  that  an 
infant  cann(jt  bind  himself  absolutely  as  the  maker,  in- 
dorser  or  acceptor  of  a  negotiable  instrument ;  and  that,  if 
such  an  instrument  has  any  validity  at  all,  it  is  voidable  at 
the  election  of  the  infant:*  yet,  since  the  recognition  of 
his  power  to  make  a  voidable  contract  would  enable  him 
to  raise  the  question  of  consideration  against  a  bona  fide 
holder,  and  thus  destroy  the  negotiable  character  of  the 
paper,  or  be  held  bound  by  his  contract,  it  has  been  very 
generally  held  that  an  infant  cannot  make  a  note  or  bill,, 
which  will  be  valid  for  any  purpose.  It  is  held  to  be 
^^bsolutely  void.'* 

1  Poof  V.  Stafford,  7  Cow.  179;  Waples  v.  Hastings,  3  Harr.  403; 
Wambole  v.  Foote,  2  Dak.  1. 

2  'Thomas  v.  Roberts,  16  M.  &  W.  778;  Bobbins  v.  Mount,  4  Rob.  (N. 
Y.)  553;  Armitage  v.  Wildoe,  36  Mich.  124;  Tapley  v.  McGee,  6  lud.  56; 
Trueblood  v.  Trueblood,  8  Ind.  195;  Flexuer  v,  Dickersou,  72  Ala.  318. 

3  Whitney  v.  Dutch,  14  Mass.  457;  Towle  v.  Dresser,  73  Me.  2.52  ;  Pot- 
tenger  v.  Steuart,  3  Harr.  &  J.  347;  Hall  v.  Jones,  21  Md.  439;  Belton  v. 
Briggs,  4  Des.  465;  Alsworth  v.  Cordtz,  31  Miss.  32;  Ward  v.  The  Little 
Red,  8  Mo.  358;  Hastings  v.  Dollarhide,  24  Cal.  195. 

<  Young  V.  Bell,  1  Cranch  C.  C.  342;  Reed  v.  Batchelder,  1  Met,  559; 
Williams  v.  Brown,  34  Me.  594;  Earl  ».  Reed,  10  Met.  387;  Wright  u. 
Steele,  2  N.  H.  61;  Goodsell  v.  Myers,  3  Wend.  479;  Everson  u.  Car- 
penter, 17  Wend.  419;  Grace  v.  Hale,  2  Humph.  27;  Baldwin  v.  Rosier, 
1  McCrary,  384. 

^  Swasey  v.  Vanderheyden,  10  .Johns.  33;  McCrillis  v.  How,  2  N.  H. 
348;  <^onn  v.  Coburn,  7  N.  H.  308;  Alsop  y.  Todd,  2  Root,  105;  Maples 
lOG 


\ 


CH.  IV.]  PERSONS  incapacitatp:d.  §  48 

Since  the  payment  of  a  negotiable  bill  or  note  must 
be  absolute  and  at  all  events, an  infant's  note  or  bill  can- 
not be  considered  negotiable,  and  when  all  other  contracts, 
except  negotiable  bills  and  notes,  were  non-assignable, 
it  may  be  technically  correct  to  hold  that  an  indorsee 
cannot  maintain  an  action  in  his  own  name  against  an 
infant  on  his  note  or  bill.^  But,  in  equity,  he  could  be 
treated  as  an  assignee,  and  sue  in  the  name  of  the  payee; 
and  now  in  most  of  the  States  almost  all  cJioses  in  action  are 
assignable,  and  this  objection  to  the  semi-validity  of  an  in- 
fant's note  or  bill  is  now  removed.  It  is  difficult  to  see 
why  an  indorsee  cannot  recover  of  an  infant,  maker  or 
drawer,  if  he  fails  to  plead  the  defense  of  infancy.  As 
Judge  Sharswood  said:  "  A  note  may  be  valid  as  such, 
though  not  negotiable  ;  in  other  words,  though  it  may  be 
so  circumstanced  as  to  let  in  all  inquiries  as  to  its  consider- 
ation in  the  hands  even  of  a  bona  fide  holder.  So  here,  on 
proof  that  the  maker  is  an  infant,  the  negotiability  of  the 
note  is  at  an  end;  but  it  does  not  cease  to  be  a  note.  It 
may  be  sued  on  by  the  holder  in  his  own  name.  He  stands 
in  the  shoes  of  the  original  payee,  and  can  recover  what- 
ever he  would  have  been  entitled  to  recover.  If  the  note 
is  voidable,  then  without  ratification  it  cannot  be  sued  on 
at  all.  The  holder,  at  most,  must  be  subrogated  to  the 
rights  of  the  original  payee,  in  an  action  against  the  infant 
in  the  name  of  the  payee,  or  a  declaration  founded  on  the 
original  consideration."  ^  This  seems  to  be  recognized  by  a 
number  of  American  cases  to    be  the  correct  rule.^    It  is 

V.  Wrightman,  4  Conn.  376 ;  Wamsley  v.  Lindenberger,  2  Kami.  478 ; 
Bouchell  V.  Clary,  3  Brev.  194;  McMinn  v.  Riclimonds,  6  Yerg.  9;  Hen- 
derson V.  Fox,  5  Ind.  489;  Tandy  v.  Masterson,  1  Bibb,  830;  Beeler  n. 
Young,  1  Bibb,  519 ;  Morton  v.  Steward,  5  111.  App.  533. 

1  Earle  v.  Reed,  10  Met.  387. 

2  Note  to  Byles  on  Bills,  p.  99  (*G0). 

3  "  I  see  no  reason  why  he  (the  infant)  may  not  be  bound  by  a  bond  or 
bill   of  exchange.     It  is  not  true  that  no  inquiry  can  be  made  into  the 

107 


§    40  TEUSONS    IXCAPACITATKD.  [ciI.    IV. 

certain! V  true  that  Avhen  the  note  or  ))ill  is  jrivcn  for  noces- 
saries,  the  holder  of  the  paper  may  in  an  appropriate  action 
recover  the  vahie  of  the  things  furnished  ;^  and  if  the  paper 
be  ratified  wlicn  the  infant  becomes  of  aire,  it  becomes  so 
valid  a  contract,  that  the  indorsee  or  holder  may  sue  on 
it  and  recover  without  any  allegation  of  a  ratification.^ 
Surely,  these  conclusions  are  altogether  inconsistent  with 
the  doctrine  that  an  infant's  bill  or  note  is  absolutel}'  void. 

§  49.  Infantas  payee  and  indorser. — Since  the  con- 
tracts of  an  infant  are  only  voidable  at  his  instance,  and 
may  be  enforced  against  the  adult  contractor,  there  can  be 
no  objection  to  the  legality  of  a  note  or  bill  that  is  made 
payable  to  an  infant.  He  can  enforce  its  payment  by  the 
maker  or  acceptor.^  But  it  would  seem  impossible  for  the 
maker  or  acceptor  to  secure  an  absolute  acquittance  by 
paj'ment  to  the  infant  payee,  personally.  The  payment 
should  be  made  to  the  o;uardian.* 

The  infant  payee  can  also  make  an  effective  indorsement 

consideration.  The  statutes  against  usury  and  gaming  are  every  day  set 
off  as  defenses  to  actions  on  bills  of  exchange  and  negotiable  notes,  even 
in  the  hands  of  innocent  indorsees."  Nott,  Ch.  in  Dubois  v.  Wheddon, 
4  McCord,  221;  Haines  Admr.  v.  Tarrant,  2  Hill  (S.  C),  400.  It  has 
thus  been  held  that  the  contract  of  an  infant  as  surety  is  only  voidable. 
Owen  V.  Long,  112  Mass.  403;  "Williams  v.  Harrison,  11  S.  C.  412;  Harner 
V.  Dipple,  31  Ohio  St.  72;  Fetrow  v.  Wiseman,  40  Ind.  148. 

1  Bradley  v.  Pratt,  23  Vt.  378;  Earle  v.  Eeed,  10  Met.  387;  Dubose  v. 
Wheddon,  14  McCord,  221;  Ray  v.  Tubbs,  50  Vt.  688;  Russell  v.  Lee,  1 
Lev.  80;  Beeler  v.  Young,  1  Bibb,  519;  Bateman  v.  Kingstou,  G  L.  R. 
(Ireland)  328. 

2  Hunt  V.  Massey,  5  Barn.  &  Aid.  902;  Williams  v.  Moore,  11  M.  &  W. 
266;  Lawson  v.  Lovcjoy,  8  Greenl.  405;  Reed  v.  Batchelder,  1  Met.  559; 
Edgerly  v.  Shaw,  5  Foster,  514;  Goodsellr.  Myers,  3  Wend,  479;  Cole  v. 
Pennell,  2  Rand.  174;  Wamsley  v.  Lindenberger,  2  Rand.  479;  Cheshire  v. 
Barrett,  4  McCord,  241;  Little  v.  Duncan,  9  Rich.  55;  King  v.  Jamison,  6fi 
Mo.  498;  West  v.  Penny,  16  Ala.  186. 

3  Teed  v.  Elworth,  14  East,  210;  Warwick  v.  Bruce,  2  M.  &  S.205; 
HoUaday  v.  Atkinson,  5  Barr.  &  C.  501. 

<  Phillips  V.  Paget,  2  Ark.  80. 
108 


CH.  IV.]  PERSONS    INCAPACITATED.  §    49 

of  the  note  or  bill,  and  the  maker  or  acceptor  cannot  refuse 
to  pay  the  money  to  the  indorsee,  on  the  ground  that  the 
payee  is  incapacitated  from  making  a  lawful  indorsement. 
By  drawing  the  note  or  bill  payable  to  the  order  of 
an  infant,  the  maker  is  estopped  from  denying  the  ca- 
pacity of  the  payee  to  indorse  it.^  But  the  infant's  in- 
dorsement, so  far  as  it  binds  him,  is  certainly  voidable. 
He  may  not  only  avoid  it,  in  order  to  relieve  himself 
of  the  secondary  liability  for  the  payment  as  an  in- 
dorser;  but  he  may,  also,  by  disaffirming  the  indorsement, 
recover  of  the  maker  or  acceptor  the  money  that  was, 
by  the  terms  of  the  instrument,  payable  to  him,  although 
it  may  have  been  already  paid  to  the  indorsee.  The 
maker  or  acceptor  of  such  commercial  paper  may  in  such 
a. case  be  compelled  to  pay  it  twice;  since,  by  making  the 
bill  or  note  payable  to  the  order  of  an  infant,  he  warrants 
the  capacity  of  the  payee  to  make  a  legal  indot'sement.^ 
But  if  he  disaffirms  the  indorsement,  before  the  payment 
is  made  to  his  indorsee,  and  gives  the  proper  notice  to  all 
parties,  to  his  indorsee,  as  well  as  to  the  antecedent  parties^ 
indorsee  cannot  demand  payment  of  the  maker  or  acceptor, 
for  he  loses  his  title  to  the  paper  by  the  avoidance  of  the 
indorsement.^ 

1  "It  would  be  absurd  to  allow  one  who  has  made  a  promise  to  pay 
to  one  who  is  an  infant,  or  his  order,  to  refuse  to  pay  the  money  to  one 
to  whom  the  infant  had  ordered  it  to  be  paid,  in  direct  violation  of  his 
promise."  Parker,  Ch.  J.,  in  Nightingale  v.  Withington,  15  Mass.  272; 
see  also  Grey  v.  Coopers,  3  Doug.  65;  Taylor  v.  Croker,  4  Esp.  187; 
Drayton  v.  Dale,  2  B.  &  C.  293;  Jones  v.  Darch,  i  Price,  300;  Frasier  v. 
Massey,  14  Ind.  352.  The  indorsement  of  an  infant  by  his  authorized 
agent  has  been  held  to  be  valid.    Hardy  v.  Waters,  38  Me.  450. 

2  Smith  V.  Marsack,  6  C.  B.  488;  s.  c.  18  L.  J.  C.  P.  65;  Taylor  v. 
Croker,  4  Esp.  187;  Goodsell  v.  Myers,  3  Wend.  479.  But  it  has  been 
claimed  that  there  is  no  such  double  liability  of  the  maker  or  acceptor, 
where  the  infant  indorser  is  himself  an  indorsee,  instead  of  being  the 
original  payee.  The  reason  is  obvious.  Story  ou  Bills,  §  85,  p.  98  (Ben- 
nett's ed.),  note  2. 

3  Story  on  Notes,  §  80. 

109 


§    50  PERSONS    INCAPACITATED.  [CH.  IV. 

f     In  any  such  case,  the  infant  cannot  avoid  the  indorse- 
*^meut,  without  returning  the  consideration.^ 

It  has  been  held  that  he  cannot  disaffirm  until  he  becomes 
of  age;^  but  it  is  probably  the  better  rule  that  he  may  dis- 
affirm at  any  time,  and  does  not  have  to  wait  until  he 
reaches  his  majority.^ 


§   50.     Ratification  of  infant's  bills  and  notes. — The 

bill  or  note,  executed  by  an  infant,  being  voidable,  may  be 
ratified  by  him  and  become  a  binding  contract  when  he  be- 
comes of  age.  After  ratification,  the  bill  or  note  will  be 
as  valid  a  contract,  and  of  the  same  legal  character,  as  if 
it  had  been  originally  executed  by  an  adult,  and  inures  to 
the  benefit  of  every  subsequent  holder.'*  It  has  been  held 
that  a  ratification  will  not  validate  a  contract  and  rebut  the 
defense  of  infancy  in  an  action  on  the  contract,  unless  it  is 
made  before  the  action  was  brought;^  but  this  view  has 
been  severely  criticised,  and  it  is  believed  that  in  this  coun- 
try a  ratification  will  remove  the  defect  whenever  it  is  made.® 
It  may  be  generally  stated  that  no  mere  acknowledgment  of 
the  contract  will  amount  to  a  ratification  of  an  executory  con- 
tract, such  as  the  infant' s  bill  of  exchange  or  promissory  note ;  ^ 

1  Melburgr.  Watrous,  7  Hill,  110. 

2  Roof  V.  Stafford,  7  Cow.  179. 

3  Bool  V.  Mix,.  17  Wend.  119;  2  Kent  Com.  *237. 

^  Hunt  w.  Massey,  5  Barn.  &  Ad.  902;  Lawson  v.  Lovejoy,  8  Greeul. 
405-,  Reed  v.  Batchelder,  1  Met.  559;  Goodsell  v.  Myers,  3  Wend.  479; 
Edgerly  v.  Shaw,  5  Foster  (N.  H.),  514;  Cheshire  v.  Barrett,  4  McCord, 
241;  Little  v.  Duncan,  9  Rich.  55;  AVest  v.  Penny,  16  Ala.  18G;  King  v. 
Jamison,  CG  Mo.  498. 

5  Thornton  v.  Illingworth,  2  Barn.  &  C.  824. 

6  1  Parsons'  N.  B.  72.  But  see  Ford  -v.  Phillips,  1  Pick.  202;  Thing 
V.  Libbey,  10  Me.  55;   Merriam  v.  Wilkins,  6  N.  H.  432. 

"  Smith  V.  Mayo,  9  Mass.  62;  Ford  v.  Phillips,  1  Pick.  202;  Thompson 

V.  Lay,  4  Pick.  48;  Proctor  v.  Sears,  4  Allen,  95;  Hale  v.  Gerrish,  8  N. 

H.  374;  Wilcox  v.  Roath,  12  Conn.  550;  Dunlap  v.  Hale,  2  Jones  (N.  C), 

381:  Armlield  V.  Tate,  7  Ire.  258;  Conklin  «.  Ogborn,  7  Ind.  563;  Alex- 

110 


CH.  IV.]  PERSONS    INCAPACITATED.  §    51 

nor  would  part  payment,^  nor  a  submission  to  arbitration, 
unless  the  award  has  been  rendered.^  Nothing  short  of 
a  new  promise  to  pay  amounts  to  a  ratification.  But  there 
need  not  be  any  formal  promise.  Any  words  expressing 
or  implying  a  promise  will  suffice.^ 

No  new  consideration  is  needed,*  but  where  the  promise  to 
pay  is  coupled  with  a  condition,  the  condition  must  be  per- 
formed, before  the  ratification  is  complete.^  In  England 
and  some  of  the  States  a  written  ratification  is  required  by 
statute,^  but  in  the  absence  of  a  statute,  the  ratification 
need  not  be  in  writing;  it  may  be,  and  usually  is,  by  parol, 
and  of  the  most  informal  character.^ 

§  51.  Joint  note  or  bill  of  infant  and  adult. — Where 
a  note  or  bill  is  executed  jointly  by  an  infant  and  an  adult, 
it  will,  as  a  matter  of  course,  be  binding  upon  the  adult  in 
any  event.  But  whether  at  common  law  suit  may  be 
brouo-ht  against   the   adult   alone,  or  should  be  instituted 


andei"  v.  Hutcheson,  2  Hawks,  535;  Keed  v.  Boshears,  4  Sneed,  118; 
Thrupp  V.  Fielder,  2  Esp.  628;  Benham  v.  Bishop,  9  Coun.  330;  Whitney 
V.  Dutch,  14  Mass.  460. 

i  Smith  V.  Mayo,  9  Mass.  62;  Bobbins  v.  Eaton,  10  N.  H.  561;  Catlin 
V.  Haddox,  49  Couu.  492;  Hiuely  v.  Margaritz,  3  Barr,  428. 

2  Beuham  v.  Bishop,  9  Conn.  330;  Barnaby  v.  Barnaby,  1  Pick.  221. 

3  Hartley  v.  Wharton,  11  Ad.  &  El.  93;  Bobs  v.  Hansel,  2  Bailey,  114; 
Whitney  v.  Dutch,  14  Mass.  460;  Wright  v.  Steele,  2  N.  H.  51;  Owis  v. 
Kimball,  3  N.  H.  314;  Martin  v.  Mayo,  10  Mass.  137. 

*  Smith  V.  Kelly,  13  Met.  309;  Owls  v.  Kimball,  3  N.  H.  314;  Hoit  v. 
Underhill,  10  N.  H.  220;  Goodsell  v.  Myers,  3  Wend.  479;  Gay  v.  Ballou, 
4  Wend.  419;  Millard  v.  Hewlett,  19  Wend  301;  Turner  v.  Gaither,  83 
N.  C.  357. 

5  Cole  V.  Saxby,  3  Esp.  159;  Davies  v.  Smith,  4  Esp.  36;  Thompson  v. 
Lay,  4  Pick.  48;  Proctor  v.  Sears,  4  Allen,  95;  Everson  v.  Carpenter,  17 
Wend.  419:  Chandlers.  Glover,  32  Pa.  St.  509. 

6  1  Daniel's  Negot.  Inst.,  §236;  Thurlow  w.  Gilmore,  40  Me.  378;  Stern 
V.  Freeman,  4  Met.  (Ky.)  309. 

^  Martin  v.  Mayo,  10  Mass.  13";  West  v.  Penny,  16  Ala.  186;  Reed  v. 
Broshears,  4  Sneed,  118. 

Ill 


§     ')2  PEKSOXS    INCAPACITATED.  [Cll.   IV. 

against  both,  will  depend  upon  the  character  of  the  infant's 
liability.  If  the  instrument,  as  to  the  infant  maker,  is  ab- 
solutely void,  then  his  signature  may  be  treated  as  sur- 
plusage, and  he  need  not  be  joined  in  the  suit.^  But  where 
the  infant's  commercial  paper  is  voidable,  and  not  void,  the 
suit  must  be  brought  against  both.^  Where  the  infant  is  a 
partner  in  a  firm,  his  continuance  in  the  firm  after  reaching 
majority,  will  not  constitute  a  ratification  of  the  contracts 
made  by  the  firm  during  his  minority.^ 

§  ')2.  tiiinatics  and  imbeciles.  — According  to  the  early 
English  law,  a  man  was  not  allowed  to  stultify  himself  by 
alleging  his  own  lunacy  or  idiocy  in  defense  of  an  action  on 
his  contract.*  But  this  rule  of  the  common  law  has  been 
everywhere  repudiated,®  and  the  contract  of  a  person,  suf- 
fering from  anv  form  of  dementia,  is  ordinarily  held  to  be 
\^ voidable.®  If  the  lunatic  has,  by  an  inquisition  of  lunacy, 
been  placed  in  charge  of  a  committee  or  guardian,  the  judg- 
ment of  lunacy  is  by  many  of  the  authorities  held  to  be 
conclusive  upon   all  parties,  and  that  the  contracts  of  such 

1  Burgess  v.  Merrill,  4  Taunt.  468;  Chandler  v.  Parkes,  3  Esp.  76; 
Jaffray  v.  Frebain,  5  Esp.  47.     See  Taylor  v.  Dausby,  42  Mich.  84. 

2  Slocura  V.  Hooker,  12  Barb.  563;  Cole  v.  Penuell,  2  Rand.  174; 
Wamsley  tj.  Lindeuberger,  2  Raud.  478. 

3  Crabtree  v.  May,  1  B.  Mou.  289. 
■1  Beverley's  Case,;  4   Rep.  126;  Stroud  v.    Marshall,  Cro.   Eliz.  398;  1 

Parsons  on  Contracts,  383. 

5  Thornton  u.  Appletou,  29  Me.  298;  Mitchell  v.  Kingman,  5  Pick.  431; 
Scavcr  v.  Phelps,  11  Pick.  304;  Grant  v.  Thompson,  4  Conn.  203;  Lang  v. 
Wliidden,  2  N.  H.  435;  Rice  v.  Pelt,  15  Johns.  503;  Bensell  v.  Chancellor, 
5  AVhart.  371 ;  Turner  v.  Rusk,  53  Md.  65;  Ballew  v.  Clark,  2  Ire.  23;  Poi- 
son V.  Garner,  15  Mo.  494;  Webster  v.  Woodford,  3  Day,  90. 

«  Arnold  v.  Richmond  Iron  Works,  1  Gray,  434;  Gibson  v.  Soper,  6 
Gray,  279;  Allis  v.  Billings,  6  Met.  415;  Jackson  v.  Guraaer,  2  Cow.  552; 
Moore  tj.  Hershey,  9  Norris  (Pa.).  196;  Turners.  Rusk,  53  Md.  65;  Mc- 
Clain  V.  Davis,  77  Ind.  419;  N.  W.  Mut.  Ins.  Co.  v.  Blankenship,  94  Ind. 
535;  Elston  v.  Jasper,  45  Tex.  409;  Campbell  v.  Kuhn,  45  Mich.  531; 
Allen   V.  Berryhill,   27   loivu,  5;54;IIalley  w.  Troester,  72  Mo.  73. 

112 


CH.   IV,]  PERSONS    INCAPACITATED  §    52 

a  lunatic  are  void,  and  not  voidable.^  But  other  au- 
thorities declare  the  judgment  of  lunacy  to  be  only 
prima  facie  evidence  of  lunacy,  except  as  to  those  who 
were  parties  to  the  inquisition,  and  hold  the  contracts  of 
one,  who  has  been  thus  declared  a  lunatic,  to  be  only  void- 
able.2 

Mere  weakness  of  mind,  or  want  of  business  capacity,  will 
not  constitute  such  a  dementia,  as  will  in  the  absence  of 
fraud  affect  the  validity  of  a  contract.^  Nor  will  every 
monomania,*  nor  even  every  general  insanity,^  necessarily 
affect  the  capacity  of  a  person  to  enter  into  a  lawful  con- 
tract.^ In  order  that  insanity  may  constitute  a  good  defense 
to  an  action  on  a  contract,  the  derangement  of  the  mind 
must  be  of  such  a  character,  and  so  great,  as  Hiat  the  per- 
son so  afflicted  is  unable  to  comprehend  the  subject  of  the 
contract  or  appreciate  its  nature  and  probable  consequences  J 


1  Nichol  V,  Thomas,  53  Ind.  42;  Freed  v.  Brown,  55  lud.  310;  Pearl  v. 
McDowell,  3  J.  J.  Marsh.  658;  Mohr  v.  Tulip,  40  Wis.  66;  Griswold  v. 
Butler,  3  Conn.  227;  Fitzhugh  v.  Wilcox,  12  Barb.  235;  Wadsworth 
V.  Sharpsteen,  4  Seld.  388;  ImhofE  u.Whitmer,  7  Casey  (Pa.),  243;Elston 
V.  Jasper,  45  Tex.  409.  See  VanDeusen  v.  Sweet,  51  N.  Y.  378;  Allen  v. 
Allen,  9  Fost.  (N.  H.)  106;  Edwards  v.  Davenport,  20  Fed.  Eep.  756; 
.s  c.  4  McCrary,  34. 

2  Littlev.  Little,  18  Gray,  264;  Hart  v.  Deamer,  6  Wend.  497;  Jacobs  v. 
Richards,  18  Beav.  300;  Yanger  v.  Skinner,  1  McCart.  389;  Parker  v, 
Davis,  8  Jones  (N.  C),  460;  Hopson  v.  Boyd,  6  B.  Mon.  296. 

^  Farnum  v.  Brooks,  9  Pick.  212;  Osmond  v.  Fitzroy,  3  P.  Wms.  129; 
Stewart  v.  Lispenard,  26  Wend.  299;  Lawrence  v.  Willis,  75  N.  C.  471; 
Lewis  V.  Pead,  1  Ves.  jr.  19. 

^  Bui'ges  V.  Pollock,  53  Iowa,  273 ;  West  v.  Russell,  48  Mich.  74 ;  Boyce 
V.  Smith,  9  Gratt.  704;  Lozear  v.  Shields,  8  C.  E.  Green,  509. 

5  Searle  v.  Galbraith,  73  111.  269. 

6  It  follows  that  those  who  are  merely  deaf  and  dumb,  deaf-mutes,  are 
not  incapacitated  on  account  of  these  physical  disabilities,  if  they  are 
provided  with  some  other  means  of  manifesting  their  assent.  Brown  v. 
Brown,  3  Conn.  299;  Brower  v.  Fisher,  4  Johns.  Ch.  441;  Barnett  u. 
Barnett,  1  Jones  Eq.  221;  Christmas  v.  Mitchell,  5  Ire.  Eq.  535. 

'  Hovey  v.  Hobsou,  55  Me.  256;  Hovey  v.  Chase,  52  Me.  304;  Somes  u. 
Skinner,  16  Mass.  348;  Farnam  u.  Brooks,  9  Pick.  212:  Bond  t?.  Bond,  7 

8  113 


§    53  PERSONS    INCAPACITATKD.  [CH.  IV. 

But  where  the  monomania  affects  his  understanding  of  the 
business  transaction,  the  fact  that  he  is  otherwise  of  sound 
mind  will  not  prevent  the  avoidance  of  the  contract  on  the 
ground  of  insanity.^ 

§  53.  Effect  of  insanity,  when  unknown  to  other 
partj'.  —  It  has  been  very  curiously  and  anomalously  held, 
in  many  cases,  both  in  England  and  in  this  country,  that 
where  the  party,  dealing  with  the  lunatic,  is  ignorant  of  his 
insanit}-,  does  not  take  advantage  of  him,  acts  in  good  faith 
in  every  respect,  and  there  was  nothing  in  the  actions  of 
the  insane  person  to  arouse  the  suspicions  of  any  reason- 
ably observant  person,  the  contract  cannot  be  avoided  by 
the  lunatic.^ 

But  it  is  certainly  anomalous  doctrine  that  the  lunatic  is 
bound  by  his  contract,  if  the  other  contracting  party  was 
ignorant  of  his  lunacy.  Since  his  capacity  depends  upon 
his  own  mental  condition,  and  the  law,  declaring  the  lun- 
atic to  be  incapable  of  making  a  binding  contract,  is 
enacted  for  his  protection  against  his  own  acts,  it  is  diiOScult 


Allen,  1;  Brown  v.  Brovrn,  108  Mass.  386;  Dennett  v.  Dennett,  44  N.  H. 
531;  Odell  v.  Buck,  21  Wend.  142;  Lozear  v.  Shields,  8  C.  E.  Green,  509; 
Smith  V.  Beatty,  2  Ired.  Eq.  456;  Hill  v.  Day,  7  Stew.  Ch.  150;  Siemont), 
Wilson,  3  Edw.  Ch.  36;  Edwards  v.  Davenport,  20  Fed.  Rep.  756;  s.c. 
4  McCrary,  34;  Smith  v.  Elliott,  1  Pat.  &  II.  307;  Musselmanu.  Cravens, 
47  Ind.  1;  Miller  v.  Craig,  36  111.  109;  Henderson  v.  McGregor,  30  Wis. 
78;  Speers  v.  Sewell,  4  Bush,  239. 

^  Riggs  V.  Am.  Tract  Soc,  95  N.  Y.  503. 

2  Paxon,  J.,  in  Moore  v.    Hershey,   90    Pa.   St.  196.     See,  also,  to 
same  general  effect,  that  lunacy  is  no  defense,  where   it  is  unknown, 
Molton  V.  Cameron,  4  Exch.  17;  Elliott  v.  Ince,  7  DeG.  M.  &  G.   478 
Dane  v.  Kirkall,  8  C.  &  P.  679;  Brown  v.  Todrell,  3  C.  &P.  30;  Loomisu 
Spencer,  2  Paige,   153;  Mutual  Life   Ins.   Co.   v.  Hunt,  79  N.   Y.  5tl 
Matthieson  v.   McMahau,  38   N.   J.  536;  Beals  v.  Shee,  10  Pa.  St.  66 
Lancaster  Co.  Bk.  v.  Moore,  78  Pa.  St.  407;  Wilder  v.  Weakley,  34  Ind 
181 ;  Behreus  v.  McKeuzie,  23  Iowa,  333;  N.  W.  Mut.  Ins.  Co.  v.  Blanken 
ship,  94  Ind.  535;  Copeiirath  v.  Kieuby,  83  lud.  18;  Riggan  v.  Green,  80 
N.  C.  236. 

114 


CH.   IV.]  I'EIISONS    INCAPACITATED.  §    55 

to  see  on  what  principle  his  liability  can  be  made  to  de- 
pend upon  the  ignorance  or  knowledge  of  the  other  party. 
It  would  seem  to  be  a  better  rule  that  a  lunatic's  contract 
is  voidable,  whether  the  other  party  is  ignorant  of,  or  ac- 
quainted with  his  mental  condition,  and  such  has  been  held 
to  be  the  proper  rule  in  the  cases  cited  below. ^ 

§  54.  Liunatic's  contracts  for  necessaries.  —  Like  the 
infant,  the  lunatic  has  the  power  to  contract  for  necessaries, 
not  onl}'  for  himself,  but  also  for  his  dependent  family; 
or,  rather,  the  law  permits  whoever  furnishes  the  lunatic 
and  his  family  with  necessaries  to  recover  their  value ;  and 
the  lunatic's  note  or  bill  given  for  necessaries  will  be  en- 
forcible  to  the  extent  of  their  actual  value.*  As  in  the  case 
of  infants,  what  are  to  be  included  in  necessaries  can  only 
be  determined  by  a  consideration  of  what  is  fitting  for  one 
having  the  means  and  social  standing  of  the  lunatic.^ 

§55.  Ratification  of  lunatic's  contracts.  —  Since  the 
contracts  of  the  insane  person  are  only  voidable,  not  void, 
they  may  be  ratified  or  disaflirmed  by  the  lunatic,  either 
during  a  lucid  interval,  or  whenever  he  is  permanently  re- 

1  Sentance  v.  Poole,  3  C.  &  P.  1 ;  Seaver  v.  Phelps,  11  Pick,  304;  Hovey 
r.  Hobsou,  53  Me.  451;  Rogers  v.  Blackwell,  49  Mich.  192;  Van  Patton  v. 
Beals,  46  Iowa,  63;  Edwards  v.  Davenport,  20  Fed.  Rep.  756;  s.  c.  4 
McCrary,  34. 

2  Stedman  v.  Hart,  1  Kay  607;  Baxter  v.  Portsmonth,  5  B.  &  C.  170  (2 
C.  &  P.  178) ;  In  re  Weaver,  21  Ch.  D.  615;  Read  v.  Legard,  6  Exch.  636; 
Davidson  w.  Wood,  1  De  G.  J.  &'S.  465;  McCullis  ?;.  Bartlett,  8  N.  H. 
569:  La  Rue  v.  Gilkyson,  4  Pa.  St.  375;  Richardson  v.  Strong,  13  Ired. 
106:  Pearl  v.  McDowell,  3  J.  J.  Marsh.  658;  Fitzgerald  v.  Reed,  9  Smed. 
&M.  94;  McCormick  r.  Littler,  85  111.  62;  Darby  v.  Cabanne,  1  Mo. 
App.  126;  Van  Patton  r.  Marks,  46  Iowa,  63. 

3  Baxter  v.  Portsmouth,  7  Dow.  &  Ey.  614  (2  C.  &P.  178).  In  Williams 
V.  Weutworth,  5  Beav.  325,  a  lunatic's  contracts  for  the  repair  orpreser- 
vation  of  his  estate  were  held  to  be  binding  upon  him.  See  Surles  v. 
Pipkin,  69  N.  C.  513. 

115 


§     "'7  PEKSONS    INCAI'ACITATKD.  [cil.   iV, 

\  stored  to  sanity.^  Or  they  may  be  ratified  or  disaffirmed 
)  by  the  committee  or  guardian,  during  his  insanity, ^  or  in 
\  the  event  of  his  death  by  his  personal  representatives.^ 

§  56.  Ijunatic,  as  payee  and  inclorser. — Of  course,  a 
lunatic  may  be  a  payee  in  a  bill  or  note,  and  unless  he 
chooses  to  demand  a  return  of  the  consideration,  he  or  his 
guardian  may  compel  payment  to  him.  He  may  also  in- 
dorse the  paper  to  another,  and  even  though  he  may  after- 
wards disaffirm  the  contract,  and  demand  the  return  of  the 
consideration,  the  bona  fide  indorsee  may  recover  of  the 
maker,  for  when  one  makes  a  note  or  bill  payable  to  the 
order  of  any  one,  he  warrants  the  capacity  of  that  person 
to  make  a  lawful  indorsement.*  But  this  estoppel  against 
the  maker  only  applies  to  the  cases  in  which  the  payee  was 
insane  at  the  execution  of  the  paper.  If  the  payee  becomes 
insane  subsequently,  his  indorsement  is  voidable,  if  not 
void.* 


§  57.  The  contracts  of  drunken  "  persons. — Drunken- 
ness is,  in  legal  contemplation,  an  aberration  of  mind,  sim- 
ilar in  its  effect  upon  the  reasoning  faculties  as  temporary 
insanity.  Hence  Ave  find  that  the  legal  effect  of  contracts, 
made  by  one  in  a  state  of  intoxication,  is  affected  in  the  same 

^  Arnold  V.  Richmond  Iron  Works,  1  Gray,  434;  Gibson  v.  Soper,  6 
Gray,  279:  Allis  v.  Billings,  6  Met.  415;  Turner  v.  Rusk,  53  Md.  Co;  N. 
W.  Mut.  Fire  Ins.  Co.  v.  Blankenship,  94  Ind.  535;  Elstou  v.  Jasper,  45 
Tex.  409. 

2  Moore  u.  Hershey,  90  Pa.  St.  196;  McClain  u.  Davis,  77  Ind.  419; 
Halley  v.  Froester,  72  Mo.  73. 

3  Campbell  v.  Kuhn,  45  Mich.  513;  Schuff  v.  Rjinsom,  79  Ind.  458. 

*  Smith  V.  Marsack,  6  C.  B.  486.  In  Peaslee  v.  Robbins,  3  Met.  164,  it 
was  held  that  the  insanity  of  the  payee  may  be  shown,  in  an  action  by  an 
innocent  indorser  against  the  maker;  but  this  case  has  been  very 
severely  criticised,  and  is  not  believed  to  be  a  reliable  authority.  Bige- 
low  on  estoppel,  450,  451. 

«  Alcock  V.  Alcock,  3  Man.  A.  G.  2G8. 
116 


CH.  VI.]  PERSOKS    INCAPACITATED.  §    57 

way  by  the  intoxication  of  the  contractor,  as  they  are  by 
his  insanity.  His  contracts  and  commercial  paper  will  not 
be  invalidated  by  the  fact  that  he  was  under  the  influence 
of  intoxicating  liquor  when  he  made  them,  if  he  was  not 
bereft  of  his  reason.^  The  intoxication  must  be  so  great 
that  the  person  cannot  comprehend  the  nature  of  the  bus- 
iness, or  the  character  of  the  instrument  he  is  signing.^ 
Even  an  habitual  drunkard's  contracts  are  valid,  if  they  are 
made  when  he  is  not  so  intoxicated  that  he  cannot  under- 
stand the  business.^  But  where  a  disadvantageous  contract 
is  made  with  one  whose  mind  has  become  enfeebled  by 
habitual  drunkenness,  and  the  other  party  knew  of  his  men- 
tal weakness,  the  courts  will  presume  fraud,  and  avoid  the 
contract,  in  the  absence  of  counter  proof  of  fair  dealimj.* 
It  is  not  necessary  that  the  drunkenness  of  the  person  be 
procured  by  the  other  contracting  party,  in  order  that  the 
contract  may  for  this  reason  be  avoided.^  But  if  it  was 
so  procured,  with  the  intention  to  take  advantage  of  him, 
it  Avould  be    a  case   of   fraud,    and  the  contract  could    be 

1  Caulkins  v.  Fry,  35  Coau.  170;  Reinicker  v.  Smith,  2  Harr.  &  J.  421 
Woods  V.  Pinclal,  Wright  (Ohio),  507;  Henry  v.  Ritenour,  31  Ind.  136; 
Belcher  y.  Belcher,  10  Yerg.  121;  Morris  u.  Nixou,  7  Humph.  579;  Cav- 
euder  v.  Waddingham,  5  Mo.  App.  457;  Reynolds  v.  Dechaums,  24  Tex. 
174;  Pickett  v.  Sutter,  5  Cal.412. 

2  Pitt  V.  Smith,  3  Camp.  33;  Molton  v.  Camroux,  2  Exch.  487;  4  Exch. 
17;  Gore  v.  Gibson,  13  M.  &  W.  623;  Wigglesworth  v.  Steers,  1  Heuing 
&  M.  154;  Clark  v.  Caldwell,  6  Watts,  139;  Jenness  v,  Howard,  6  Blackf. 
240;  Dulaney  V.  Green,  4  Harr.  285;  Drumraond  v.  Hopper,  4  Harr.  327; 
Johns  V.  Fritcliey,  39  Md.  258;  Wilson  p.  Briggs,  7  Watts  &  S.  Ill; 
Berkleys.  Cannon,  4  Rich.  130;  Williams  u.  luabuet,  1  Bailey,  343;  Cum- 
mingsv.  Henry,  10  Ind.  109;  Wyck  t;.  Braslier,  81  N.  Y.  260;  Bates  i\ 
Ball,  72  111.  108;  Schramm  v.  O'Connor,  98  111.  539. 

3  Ritter's  Appeal,  9  Smith  (Pa.),  9;  Miller  v.  Finley,  26  Mich.  249. 

*  Holland  v.  Barnes,  53  Ala.  83.  In  tliis  case  a  note  based  on  insuffi- 
cient consideration  was  thus  obtained  from  one  who  was  partially  intox- 
icated and  enfeebled  by  habitual  drinking. 

5  Wigglesworth  v.  Steers,  1  Hen.  &  M.  70;  Freeman  v.  Staats,  4  Halst. 
Ch.  814;  French  v.  French,  8  Ohio,  214;  Douelsou  v.  Posey,  13  Ala.  752. 

117 


§    58  TEKSONS    IXCAI'ACITATEU.  [CH.   IV. 

avoided,  althoii<;h  the  intoxioution  did  not  deprive  him  of 
his  meutal  faculties  <iompletely.^  Indeed,  any  undue  advan- 
tajre,  taken  of  a  man's  intoxication  will  avoid  a  contract 
which  he  would  not  have  made  if  he  was  sober .^ 

It  has  been  held  that  complete  intoxication  will  not  inval- 
idate a  note  or  bill,  made  while  in  that  condition,  if  it  has 
passed  into  the  hands  of  a  bona  fide  holder.^  But  it  would 
seem  that  if  drunkenness  deprived  an  individual  of  his  con- 
tractual capacity,  there  is  no  valid  contract,  and  hence  a  bona 
fide  holder  cannot  acquire  any  absolute  right  against  the 
maker  of  such  an  instrument.*  The  contracts  of  a  drunken 
person,  like  those  of  a  lunatic,  are  voidable,  and  may  be 
ratified  or  disaffirmed  by  the  person,  when  he  becomes 
sober .^  And  if  he  retains  and  enjoys  the  consideration, 
after  his  recovery  from  intoxication,  his  actions  will  consti- 
tute a  ratification  of  the  contract.^ 

§  58.  The  disability  of  all  persons  vinder  giiardiau- 
ship  —  Spendthrifts.  — As  in  the  case  of  infancy  or  lunacy, 
so  may  one  be  placed  under  guardianship  for  other  causes 
which  render  him  more  or  less  unable  to  take  care  of  him- 
self; for  example,  the  habitual  drunkard  and  spendthrift. 
Any  one  who  is  for  any  cause  placed  under  a  guardian  and 
deprived  of  the  control  of  his  property,  is  consequentially 

1  Say  V.  Bar-wick,  1   Ves.   &  B.  195;  Wilcox  v.  JacKSon,  51  Iowa,  208. 

2  Burroughs  V.  Richmau,  1  Green  (N.  J.),  233;  Butlers,  Mulvihill,  1 
Bligh,  137;  Birdsong  v.  Birclsong,  2  Head,  289;  Murray  v.  Carlin,  67  111. 
286;  White  v.  Cox,  2  Hayw.  79;  Mansfield  u. Watson,  2  Iowa,  111;  Henry 
V.  Ritenour,  31  lud.  136. 

3  Johnson  r.  Medlicott,  3  P.  Wms.  130;  State  Bank  v.  McCoy,  69  Pa. 
St.  204;  McSparran  v.  Neely,  91  Pa.  St.  17. 

<  In  Hawkins  v.  Bone,  4  Post.  &  F.  311,  it  was  held  that  it  was  not 
necessary  for  the  other  party  to  know  of  the  intoxication,  in  order  to  in- 
validate the  contract. 

*  Matthews  v.  Baxter,  L.  R.  8  Ex.  132;  Calkins  v.  Fry,  35  Conn.  170. 

6  Gore  V.  Gibson,  13  M.  &W.  623;  Williams  v.  Inabnet,  1  Bailey,  343; 
Joest  V.  Williams,  42  Ind.  565.  But  see  Reinskopf  v.  Ragge,  37  Ind.  207. 
118 


CH.  IV.]  PERSOXS    IXCAPACITATED.  §    50 

deprived  of  the  power  to  make  a  negotiable  instrument.^ 
It  has  thus  been  held  that  the  indorsement  by  a  spendthrift 
of  a  note  payable  to  him  is  void.^ 

§  59.  Disability  of  Coverture  —  Commercial  paper  of 
married  women.  —  At  common  law,  the  legal  personality 
of  the  "woman  was  completely  merged  in  that  of  the  hus- 
band, and  with  the  loss  of  her  legal  personality  she  was 
also  deprived  of  the  control  of  her  property  and  of  her  con- 
tractual powers.^  Of  late  years,  in  this  country,  atendency 
has  been  manifested  generally  to  break  away  from  these 
common-law  rules  of  disability  of  coverture,  and  since  the 
legislative  powers  of  the  different  States  are  acting  inde- 
pendently of  each  other  and  without  concert,  we  naturally 
find  the  existing  law  of  married  women  to  vary  in  detail 
with  each  State,  in  almost  all  of  which  there  is  found  a  va- 
riable divergence  from  the  common-law  rules.  In  conse- 
quence of  the  general  character  of  a  treatise  like  the 
present,  it  will  be  impossible  to  state  the  statutory  law  of 
each  State,  and  any  attempt  to  make  a  general  statement 
of  the  statutory  modifications  would  be  more  or  less  mis- 
leading. It  has  consequently  been  deemed  advisable  not  to 
make  such  an  attempt,  and  confine  the  present  statements 
to  a  consideration  of  the  common-law  rules,  warning  the 
reader  to  look  for  modifications  in  the  statutes  of  the  State, 
in  which  the  commercial  paper  of  a  married  woman  is  made 
or   is  payable.     According  to  the  common  law,  a  married 

1  Mansfield  v.  Felton,  13  Pick.  206;  Chew  v.  Bank  of  Baltimore,  U 
Mel.  299. 

^  Lynch  v.  Dodge,  130  Mass.  458.  For  the  constitutional  limitations 
iipon  the  power  of  the  State  to  deprive  a  spendthrift  of  the  control  of 
his  property,  and  to  place  him  under  guardianship,  see  Tiedemau's  Lim- 
itations of  Police  Power,  §  138. 

^  For  a  consideration  of  the  reasons  that  induced  the  subjection  of 
the  wife  and  her  property  to  the  control  of  the  husband,  see  Tiedeman's 
Limitations  of  Police  Power,  §§  1C1-1G3. 

119 


§    60  PERSONS    INCAPACITATED.  [CH.   IV. 

woman  cannot  make  or  accept  or  indorse  a  commercial  in- 
strument, and  her  attempted  execution,  acceptance  or 
indorsement  of  such  an  instrument  is  absohitely  void,^ 
So  completely  void  is  the  married  woman's  note  or  bill, 
that  her  promise  after  the  death  of  her  husband  to  pay 
such  a  note  or  bill  is  not  binding  upon  her,  unless  it  is 
based  upon  a  new  consideration.''^ 

§  GO.  Effect  of  marriage  on  aute-nuptial  notes  and 
bills.  —If  a  woman,  while  single,  executes  a  note  or  bill, 
and  marries  before  it  is  paid,  the  liability  for  its  payment 
is  imposed  by  the  law  upon  the  husband  during  the  mar- 
riao-e.  Although,  in  theory,  this  obligation  of  the  husband 
for  the  ante-nuptial  debts  of  his  wife  rests  upon  the  sup- 
position that  he  has  come  into  possession  of  all  her  prop- 
erty, and  hence  the  creditors  cannot  secure  payment  from 
her,  yet  his  liability  for  these  debts  is  not  limited  to  the 
amount  of  property  he  has  acquired  from  his  wife  ;  nor 
does  it  depend  upon  his  knowledge  of  their  existence  at  the 
time  of  the  marriage.  He  is 'liable,  even  if  she  comes  to 
him  without  any  dowry,  and  laden  with  debts,  whose  exis- 
tence has  been  concealed  from  him.^  In  all  such  cases  the 
husband  and  wife  must  be  sued  jointly.*  But  the  liability 
of  the  husband,  and  of  his  property,  for  the  ante-nuptial 
notes  and  bills  of  his  wife  expires  with  the  termination  of 
the  coverture,  whether  it  closes  with  the  death  of  either  of 
them  or  by  divorce.     If  the  husband  dies  before  action  is 

1  Mason  v.  Morgan,  2  Ad.  &  El.  30;  Haly  v.  Lane,  2  Atk.  181;  Howe  v. 
Willies,  34  Me.  566;  Kemoorphy  v.  Sawyer,  125  Mass.  29;  Van  Steen- 
burgli  V,  Hoferaan,  15  Barb.  28;  Chouteau  v.  Merry,  3  Mo.  254. 

2  Loyd  V.  Lee,  1  Strange,  94;  Littlefield  v.  Spec,  2  B.  &  Ad.  811 ;  Meyer 
r.  Haworth,  8  Ad,  &  El.  4G7;  Eastwood  v.  Kenyou,  11  Ad.  &  El.  438; 
Watkins  r.  Ilalstead,  2  Sandf.  311;  Vance  v.  Wells.  6  Ala.  737;  s.  c.  8 
Ala.  399;  Hetheriugtou  v.  Hixon,  46  Ala.  297. 

3  1  Blackst.  Coin.  413;  2  Kent  Com.  143-146:  Schouler's  Domestic 
Relations,  69;   1  Daniel's  Negot.  Inst.,  §  258. 

*  Mitchinsou  v.  Ilewsou,  7  T.  R.  348. 
120 


CH.   IV.]  PERSONS    IXCAr'ACITATED.  §    61 

instituted,  his  surviving  wife  will  alone  be  liable  and  not 
his  estate  ;  and  in  the  event  of  her  death,  during  the  life- 
time of  the  husband,  action  must  be  brought  against  her 
personal  representatives.^  And  all  her  property,  remain- 
ing at  her  death,  including  her  choses  in  action,  not  reduced 
to  possession  by  the  husband,  will  be  liable  in  the  hands  of 
her  administrator  for  these  debts.^ 

§  61.  Exceptions  to  married  woman's  contractual  dis- 
ability.—  There  are  several  exceptional  cases,  in  which 
the  married  woman  is  given  by  the  law  the  power  to  con- 
tract and  execute  legal  bills  and  notes.  The  first  case  is 
where  the  husband  is  an  alien  or  civilly  dead.  If  the  hus- 
band is  an  alien  enemy,  he  is  prevented  by  law  from  coming 
to  her  aid ;  it  is  therefore  necessary  for  her  own  mainte- 
nance and  support  to  have  the  power  to  contract,  and  the 
law  concedes  this  power  to  her.  So  also  where  the  husband 
is  simply  an  alien,  and  has  never  resided  in  this  country, 
particularly  when  he  is  prohibited  by  the  laws  of  his  own 
country  from  leaving  the  realm  without  the  permission  of 
the  State  authority.^  In  Massachusetts  it  has  been  held 
that  the  States  of  the  American  Union  are  foreio-n  States 
so  far  that  a  husband  is  treated  as  an  alien,  who  lives  in  a 
different  State  from  that  in  which  his  wife  resides.  She 
has  in  such  a  case  the  same  powers  of  a  feme  sole,  which 
are  conceded  to  her,  when  her  husband  lives  and  has 
always  lived  in  a  foreign  land.*  But  if  the  alien  has  once 
lived  in  the  same  State  or  country  with  his  wife,  and  has 

1  Woodman  v.  Chapmau,  1  Camp.  189;  Curtton  u.  Moore,  2  Jones' 
Eq.  204;  2  Kent  Com.  144;  Byles  on  Bills,  (*66),  110. 

2  Heard  v.  Stamford,  3  P.  Wms.  409;  Morrow  v.  Whitsides,  10  B. 
Mou.  411;   1  Parsons' N.  &  B.  86. 

3  Derry  v.  Duchess  of  Mazarine,  1  Ld.  Raym.  147;  Kay  v.  Duchesse 
de  Pciune,  3  Camp.  123;  Gregory  v.  Paul,  15  Mass.  31;  McArthur  v. 
Bloom,  2  Duer,  151. 

■•  Abbott  V.  Bailey,  6  Pick.  89. 

121 


§    (31  PERSONS    INCAPACITATKD.  [CH.   IV. 

gone  abroad,  she  does  not  acquire  the  rights  of  a  feme  sol*', 
until,  by  a  seven  3'ears'  absence,  and  -without  communica- 
tion or  intelligence  of  him  during  that  time,  he  is  presumed 
by  the  law  to  be  dead.^  In  Massachusetts,  permanent  de- 
sertion and  departure  of  the  husband  to  a  foreign  State, 
restore  the  powers  of  a  single  woman  to  the  ■wife,  and  she 
can  then  make  binding  contracts.^  But  a  contrary  decision 
was  reached  in  a  similar  case  by  the  Supreme  Court  of  Mis- 
souri. The  court  say:  "Coverture  operates  a  legal  dis- 
ability to  contract,  and  all  contracts  of  a  feme  covert  are 
absolutely  void.  The  facts  in  this  case  do  not  bring  it 
within  any  of  the  exceptions.  The  cases  cited  from  the 
English  books  are  where  the  husbands  abjured  the  realm, 
or  were  foreigners  residing  abroad.  The  principles  settled 
in  these  cases  do  not  apply.  If  by  a  removal  from  one 
State  to  another,  or  a  separate  residence  in  different  States, 
the  indissoluble  connection  by  which  the  wife  is  placed 
under  the  power  and  protection  of  her  husband  could  be 
cancelled,  and  the  parties  thereby  relieved  of  their  respec- 
tive liabilities  and  disabilities,  there  would  be  little  need  of 
troubling  the  legislature  or  the  courts  on  the  subject  of 
divorces.^  The  married  woman  is,  for  like  reasons,  not 
restored  to  the  legal  freedom  of  a  single  woman,  when  she 
is  merely  living  apart  from  her  husband ;  *  or  when  she  has 
been  divorced  from  her  husband  a  tnensa  et  tJioro.^  But 
all  absolute  divorces,  whether  common-law  or  statutory, 
will  remove  from  the  married  woman  her  marital  disabil- 


^  Kay  V.  Diichesse  de  Peinue,  3  Camp.  123;  Loring  v.  Sleinemau,  1 
Met.  204. 

2  Gregory  v.  Paul,  15  Mass.  31. 

3  Chouteau  v.  Merry,  3  Mo.  254. 

4  Marshall  v.  Ruttou,  8  T.  R.  545;  Hatchett  v.  Badcleley,  2  W.  Black, 
1079;  Lean  v.  Schultz,  2  W.  Black.  1195;  Hyde  v.  Price,  3  Ves.  jr.  443. 

5  Fairthorne  v.  Blaquire,  6  Maule  &  S.  73;  Lewis  v.  Lee,  3  Barn.  &  C. 
291.  The  rule  is  different  in  Massachusetts.  Dean  u.  Eichmoud,  5  Pick. 
4C1. 

122 


CH.  IV.]  TERSONS    INCAPACITATED.  §    62 

ities,  since  these  divorces  operate  as  a  complete  dissolution 
of  the  marriage  tie.'^  Imprisonment,  banishment  or  trans- 
portation, or  the  renunciation  of  civil  life  by  the  entr}' 
into  a  monastery  or  convent,  have  been  held  to  dissolve  the 
marriage  tie  so  far  as  to  restore  the  married  woman  to  the 
contractual  and  property  rights  of  a  single  woman. ^  By 
the  custom  of  London,  a  married  woman  was  allowed  to 
become  a  merchant  on  her  own  account,  to  be  a.  sole  trader, 
as  she  was  called.  As  a  sole  trader,  she  had  the  incidental 
power  to  make  all  contracts  necessary  for  the  prosecution 
of  her  separate  business.^  In  the  United  States,  a  similar 
power  is  some  times  granted  by  statute  to  make  all  con- 
tracts, including  all  kinds  of  commercial  j^aper,  in  the 
capacity  of  a  sole  trader.*  But  in  the  absence  of  statutory 
authority,  the  married  woman  cannot  become  a  trader,  ex- 
cept by  the  consent  of  her  husband;  and,  of  course,  his 
consent   makes  him  a  responsible  party  to  the  business.^ 

§  62.  Commercial  paper  of  married  woman  with  a 
separate  estate.  —  In  order  to  relieve  married  women  of 
the  hardships  that  ordinarily  result  from  her  common-law 
disabilities,  as  soon  as  the  conception  of  an  equitable  estate 
in  property  apart  from  the  legal  title  was  fully  developed, 
the  English  Court  of  Chancery  so   construed  the  equitable 

1  Chamberlaine  i'.  He-wson,  5  Mod.  71;  1  Daniel's  Negot.  Inst.,  §  243; 
Story  on  Bills,  §  90;  1  Parsons'  N.  &  B.  78. 

-  Hatctiett  V.  Baddeley,  2  W.  Blackst.  1079;  Ex  parte  Franfes,  7  Bing. 
762;  2  Kent  Com.  136. 

3  Beard  v.  Webb,  2  B.  &  P.  93;  Byles  ou  Bills  (*63),  105. 

*  Camden  v.  Mulen,  29  Cal.  566. 

fi  Richardson  v.  Merrill,  32  Vt.  27;  Partridge  v.  Stocker,  36  Vt.  108; 
James  v.  Taylor,  43  Barb.  530;  Todd  v.  Lee,  16  Wis.  480;  Moses  t?. 
Fogartie,  2  Hill  (S.  C),  335;  Abbott  u.  Mackinley,  2  Miles,  220.  But  it 
has  been  held  in  New  York  that  if  a  husband  authorizes  his  wife  to  ex- 
ecute notes,  in  order  that-  the  notes  may  be  binding  upon  the  husband, 
tliey  must  purport  on  their  face  to  have  been  given  by  the  wife,  as  agent 
or  on  behalf  of  the  husband.     Minurd  v.  Mead,  7  Wend.  68. 

123 


§    Cr2  PKRSON'S    INCArAClTATED.  [cil.  IV. 

estate  tliut  it  was  held  by  its  owner  free  from  all  the  com- 
mou-law  restrictions  and  qualities,  which  hampered  the  en- 
joyment of  the  property,  or  which  for  some  other  reason 
were  found  to  be  burdensome.  It  thus  became  the  rule  of 
equity,  that  a  married  woman  could  hold  and  enjoy,  sep- 
arate from  and  bej'ond  tlic  control  of  the  husband,  any 
property  that  was  settled  on  her  as  an  equitable  estate  to 
lie?'  sole  and  separate  use.^  In  making  a  conveyance  to  the 
separate  use  of  a  married  woman,  her  power  of  alienatioH 
and  disposition  may,  by  a  special  clause,  be  restricted  or 
taken  away  entirely  during  the  marriage.^  In  the  absence 
of  such  a  restraining  clause  in  England  and  in  most  of  the 
United  States,  a  married  woman  is  to  be  treated,  in  respect 
to  her  separate  property,  as  a  fejiie  sole,  and  she  may  dis- 
pose of  the  equitable  estate  as  she  pleases.^  In  a  number  of 
the  States,  however,  the  English  rule  has  been  discarded  and 
the  contrary  doctrine  raain-tained,  that  the  married  woman 
has  no  power  over  her  separate  estate,  except  what  is  ex- 
pressly granted  or  reserved  to  her  in  the  deed  of  settlement.* 

^  See  Tiedeman  ou  Ileal  Property,  §  409. 

-  Ilawkes  v.  Hubback,  L.  R.  11  Eq.  5;  lu  re  GafEee's  Trusts,  1  Macu. 
&  G.  541;  Tullett  v.  Armstrong,  4  My.  &  Cr.  377;  Waters  v.  Tazewell,  9 
Md.  291;  Fellows  v.  Taun,  9  Ala.  999;  Shirley  ^).  Shirley,  9  Paige,  303; 
Fears  v.  Brooks,  12  Ga.  195;  Baggett,  v  Meux,  1  Phil.  027.  But  see 
Dubs-r.  Dubs,  31  Pa.  St.  149;   Miller  v.  Bingham,  1  Ired.  423. 

3  Fettiplace  v.  Gorges,  1  Ves .  40;  Rich  v.  Cockerill,  9  Ves.  09;  "Wag- 
staff  V.  Smith,  9  Ves.  520;  Sturgis  v.  Corp.,  13  Ves.  190;  Major  v. 
Lausley,  2  Russ.  &  My.  357;  Essex  v.  Atkins,  14  Ves.  542;  Dyett  v. 
North  Am.  Coal  Co.,  20  Wend.  570;  s.  c.  7  Paige  Ch.  1;  Powell  v.  Mur- 
ray, 2  Edw.  Ch.  630;  Gardner  v.  Gardner,  32  Wend.  520;  Yale  v.  Dederer, 
18  N.  Y.  209;  Imlay  v.  Huntington,  20  Conn.  175;  Leaycraft  v.  Iledden,  3 
Green  Ch.  551;  Wyly  v.  Collins,  9  Ga.  223;  Cooke  v.  Husbands,  11  Md. 
492;  Chew's  Admr.  v.  Beall,  13  Md.  348;  McCroan  v.  Pope,  17  Ala.  012; 
Collins  V.  Lareuburg,  19  Ala.  085;  Coleman  v.  Woollcy,  10  B.  Mou.  320; 
Hardy  v.  Van  Ilarliugcr,  7  Ohio  St.  208;  Whitcsides  v.  Cannon,  23  Mo 
457;  Segoud  v.  Garland,  23  Mo.  547;  Frazier  v.  Browulow,  3  Ired.  Eq. 
237;  Newlin  v.  Freeman,  4  Ired.  312. 

*  Ewiug  V.  Smith,  3  Dcsa.  417:  Reed  v.  Lamar,  1  Strobli.  Eq.  27;  Cal- 

124 


CII.   IV.]       .  PEIiSOXS    INCArACITATED.  §    62 

Accortliu^ly,  we  lin,d  that  in  England,  as  in  those 
States  in  which  the  married  woman  has  in  respect  to  her 
separate  estate  the  powers  of  a  single  woman,  and  in 
all  other  States  when  these  powers  are  expressly  reserved 
to  her,  all  her  contracts,  including  her  commercial  paper, 
which  are  made  on  the  faith  of  the  separate  estate,  can  be 
enforced  against  it.  In  England,  her  separate  estate  is 
liable  for  all  of  her  debts,  for  it  is  presumed  that  credit 
was  given  to  her  in  any  case  on  the  faith  of  the  liability  of 
the  separate  estate.^  And  this  is  also  the  rule  in  many  of 
the  States,  denying  the  necessity  of  any  express  charge  of 
the  debt  on  the  estate,  or  even  the  appropriation  of  the 
.consideration  to  the  benefit  of  her  estate.^  But  in  New 
York,  it  has  been  held  that  in  order  that  a  married  woman's 
separate  estate  may  be  charged  with  her  debts,  the  inten- 
tion to  so  charge  it  must  be  declared  in  the  contract  of 

houu  V.  Calhoun,  2   Strobh.  231 ;  Magwood  v.  Johnson,  1  Hill  Ch.  228 
Lancaster  v.  Dolan,    1  Rawle,  231;  Wallace  v.   Costan,    9   Watts,  137 
Thomas  v.  FolT^'ell,  2  Whart.    11;  Patterson  r.  Robinson,  I  Casey,  81 
Metcalf  V.  Cook,  2  R.  I.  355;  Williamson  v.  Beckham,  8  Leigh,  20;  Mor- 
gan V.  Elam,  9  Yerg.  375;  Marshall  v.  Stephens,  8  Humph.  159;  Doty  v. 
Mitchell,  9  Smed.  &  M.  4i7;  Montgomery  u.  Agricultural  Bank,  10  Smed. 
&  M.  5G7. 

1  Bulfln  V.  Clarke,  17  Ves.  366;  Hulme  v.  Tenant,  1  Bro.  C.  C.  16; 
Bingham  v.  Noyes,  Chitty  on  Bills,  (21)  28;  Stewart  v.  Lord  Kirkwall, 
3  Mad.  Ch.  387. 

2  Wicks  V.  Mitchell,  9  Kan.  80;  Bell  v.  Kellar,  13  B.  Mon.  381;  Me- 
tropolitan Bk.  ■;;.  Taylor,  62  Mo.  338;  Morrison  v.  Thistle,  67  Mo.  596; 
Grapergether  v.  Fejervary,  9  Iowa,  163;  Todd  v.  Lee,  15  Wis.  365; 
Major  V.  Symmes,  19  Ind.  117;  Williams  v.  Urmston,  35  Ohio  St.  296, 
(overruling  Levi  v.  Earle,  30  Ohio  St.  147) ;  Pentz  v.  Simeon,  2  Beasley, 
232;  Rogers  v.  Ward,  8  Allen,  387;  Garland  v.  Pamplin,  32  Gratt.  303. 
In  Frank  v.  Lilienfeld,  33  Gratt.  849,  Burks,  J.,  said:  "  It  is  necessary 
that  it  (the  contract  of  the  married  woman)  be  entered  into  with  refer- 
ence to,  and  in  the  credit  of,  the  separate  estate.  There  must  be  an 
intention  to  make  the  separate  estate  liable.  It  need  not,  however,  be 
express ;  it  may  be  implied.  It  is  implied  when  the  wife  executes  a 
bond,  note,  or  other  instrument  for  the  payment  of  money,  either  as 
principal  or  as  surety  for  another,  even  for  her  husband,  no  undue  in- 
fluence being  used." 

125 


§     t>2  I'KKSONS    IXCA1'A(  ITATEI).  [cil.    IV. 

indebtedness  itself;  or  it  must  be  shown  that  the  considera- 
tion of  the  debt  was  obtained  for  the  benefit  of  the  estate.^ 
The  charge  upon  the  separate  estate  is  a  rule  in  equity, 
designed  to  offset  the  favor  shown  to  married  women,  in 
violation  of  the  common-law  rule  of  disability.  As  it  has 
been  explained  by  an  English  chancellor,^  '*  the  separate 
property  of  a  married  woman,  being  a  creature  of  equity, 
it  follows  fhat  if  she  had  a  power  to  deal  with  it,  she  has 
the  otlior  powers  incident  to  property  in  general,  namely: 
the  ])Ower  of  contracting  debts  to  be  paid  out  of  it;  and 
inasmuch  as  her  creditors  have  not  the  means  at  law  of 
compelling  payment  of  those  debts,  a  court. of  equity  takes 
upon  itself  to  give  effect  to  them,  not  as  personal  liabilities, 
but  by  laying  hold  of  the  separate  property,  as  the  only 
means  by  which  they  can  be  satisfied."  There  is,  there- 
fore, in  such  a  case  no  personal  liability  for  the  debt.^ 
But  any  separate  property  she  might  own  at  the  time  of 
trial  and  judgment  will  be  liable,*  unless  the  debt  has  been 
made  a  special  charge  upon  a  particular  piece  of  property ; 
when  the  right  of  recover^'  Avill  be  confined  to  that  prop- 
erty, and  the  remainder  of  her  separate  estate  will  not  be 
liable.^ 

^  Yale  V.  Dederer,  22  N.  Y.  450;  s.  c.  18  N,  Y.  265  (overruliug  same 
case  in  21  Barb.  286);  White  v.  McNett,  33  N.  Y.  371;  Ledlie  v.  Vrooman, 
41  Barb.  109;  Coru  Exchange  Ins.  Co.  v.  Babcock,  42  N.  Y.  613;  Second 
Nat.  Bk.  V.  Miller,  60  N.  Y.  639;  Conliu  v.  Cantrell,  64  N.  Y.  219.  See, 
also  Kenton  Ins.  Co.  v.  McClellan,  43  Mich.  5G4;  Heugh  u.  Jones,  32 
Pa.  St.  432.  But  the  note  of  the  married  woman,  given  for  money 
expressed  to  be  applied  to  the  separate  estate,  will  be  binding  upon  the 
estate,  although  she  afterwards  makes  some  other  use  of  it.  McVey  v. 
Cantrell,  70  N.  Y.  295,    Contfa,  Heugh  v.  Jones,  32  Pa.  St.  432. 

2  Lord  Chancellor  Cotteuhara  in  Owens  r.  Dickenson,  1  Craig  &  Ph. 
48. 

3  Lloyd  V.  Lee,  1  Strange,  94;  Littlefield  r.  Shee,  2  B.  &  Ad.  84;  Leer 
V.  Muggridge,  5  Taunt.  3G. 

4  Todd  V.  Ames,  60  Barb.  462. 

5  See  Kimm  v.  Weippert,  46  Mo.  532 ;  Wolf  r.  Van  Metre,  23  Iowa, 
397. 

126 


CH.  IV.]  PERSONS    INCAPACITATED.  §    63 

§  63.    Married  woman  as  payee  and  indorser.  —  Ac- 

€ordino;  to  the  earlv  common  law,  the  married  woman  was 
held  to  be  incapable  of  being  a  legal  obligee  or  grantee, 
without  the  consent  of  her  husband;  but  if  he  assents  to  it 
durins:  the  marriagre,  neither  she  nor  her  heirs  can  disaffirm 
the  contract  or  grant  after  his  death. ^  Whether  this  rule 
will  be  now  recognized  as  governing  the  capacity  of  a  mar- 
ried woman  to  be  the  payee  in  commercial  paper,  is  doubt- 
ful. But  it  is  certainly  true  that  if  she  is  the  payee,  whether 
the  paper  was  executed  before  or  after  the  marriage,  she 
cannot  recover  or  exact  payment  of  the  maker,  drawer  or 
acceptor;  nor  will  payment  to  her  discharge  the  persons 
liable  on  the  paper.  Only  the  husband  can  receive  pay- 
ment, and  maintain  actions  on  the  wife's- closes  m  action? 
Although  it  has  been  held  differently,^  it  is  now  well  settled 
that  all  negotiable  instruments  are  choses  in  action.^  The 
married  woman,  therefore,  who  is  payee  in  a  negotiable  in- 
strument, cannot  pass  a  legal  title,  to  the  instrument  nor 
bind  herself  in  any  way  by  an  indorsement,  without  the 
consent  of  the  husband.^     The  husband  may  indorse  and 

1  Butter  V.  Baker,  3  Eep.  26;  Whelpdale's  Case,  5  Rep.  119;  Melviu  v. 
Proper's,  etc.,  IG  Pick.  167;  Foley  v.  Howard,  8  Clarke,  36.  But  Lord 
Coke  maiutaiued  that  the  husband's  assent  did  not  prevent  a  disclaimer 
by  the  wife  after  his  death.     Co.  Lit.  8a. 

2  Garforth  v.  Bradley,  2  Ves.  675;  Richards  v.  Richards,  2  B.  &  Ad. 
447:  Howard  v.  Okes,  3  Wels.,  H.  &  G.  136;  Legg  v.  Legg,  9  Mass.  99; 
Dean  v.  Richmond,  5  Pick.  461 ;  Phillis  Kirk  v.  Plackwell,  2  Maule  &  S. 
399. 

3  McNeilage  v.  Holloway,  1  Barn.  &  Aid.  218. 

^  Richards  v.  Richards,  2  Barn  &  Ad.  447;  Hart  v.  Stephens,  6  Q.  B. 
937;  Scarpellini  17.  Atcheson,  7  Ad.  &E1.N.  S.  Q.B.  847;  Gatersu.  Madeley, 
6  Mees.  &  W.  423;  Tritt  v.  Colwell,  31  Pa.  St.  228;  Needles  v.  Needles,  7 
Ohio  St.  432. 

5  Connor  v.  Martin,  1  Strange,  516;  Barlow  v.  Bishop,  3  Esp.  2G6;  s.  c. 
1  East,  432;  Cotes  v.  Davis,  1  Camp.  485;  Rawliusou  v.  Stone,  5  Wilson, 
5;  Savage  v.  King,  17  Me.  301;  Shuttleworth  v.  Noyes,  8  Mass.  229; 
Evans  •'.  Secrest,  3  Ind.  545. 

127 


§    63  PERSONS    INCAPACITATED.  [cil.   IV. 

negotiate  the  paper  himself,  or  hold  it  and  demand  [tay- 
ment  when  it  falls  due,^  or  he  may  sue  upon  it  in  the  joint 
,  names  of  himself  and  wifc.^  He  may  also  authorize  her  to 
)  indorse  it,  and  her  indorsement  with  his  consent  is  as  bind- 
\  ing  upon  him,  as  if  he  had  indorsed  it  himself.^  But  al- 
'  though  the  wife's  indorsement  of  her  bills  and  notes  without 
the  husband's  consent  is  invalid  for  every  purpose,  so  far 
as  to  affect  the  riijhts  of  herself  or  husband,  and  the  hus- 
band  may  recover  such  a  bill  or  note  of  the  holder,  yet  if 
an  innocent  indorsee  acquire  possession  of  it,  he  may  main- 
tain an  action  on  the  bill  or  note,  against  the  drawer,  ac- 
ceptor or  maker,  if  the  paper  was  executed  after  the  mar- 
riage, on  the  ground  that  the  maker  or  drawer  is  estopped 
from  denying  the  capacity  of  the  payee.*  So,  also,  if  the 
indorsee  of  the  married  woman  himself  indorses  the  instru- 
ment to  another,  his  indorsement  warrants  the  legality  of 
the  married  woman's  indorsement,  and  he  is  estopped  from 
denying  it.^  If  a  promissory  note  or  bill  of  exchange  is 
made  payable  to  a  husband  and  wife  jointly,  they  acquire  a 
joint  interest,  something  like  the  estate  in  entirety  in  the 
law  of  real  property.^  During  marriage  payment  is  made 
to  the  husband,  but  if  it  should  remain  unpaid  at  his  death, 
it  passes  to  the  wife  as  survivor,  and  the  husband's  personal 

1  Burrough  v.  Moss,  16  B.  &  C.  558;  Masou  v.  Morgan,  2  Ad.  &E1.  30; 
Gaters  v.  Madeley,  6  Mees.  &  W.  423;  McNeilage  ».  Holloway,  1  Barn  & 
Ad.  218;  Sutton  w.  Warrea,  10  Met.  451. 

2  Richards  v.  Richards,  2  Barn.  &  Ad.  447. 

3  Stevens  v.  Beal,  10  Cush.  291;  Roland  v.  Logan,  18  Ala.  307;  Men- 
kins  V.  Heringhi,  17  Mo.  297. 

*  Smith  V.  Marsack,  G  C.  B.  486;  Drayton  v.  Dale,  2  Barn.  &  C.  293; 
Rawlinson  v.  Stone,  3  Wils.  1,  5.  But  if  the  paper  was  executed  before 
the  marriage,  even  the  innocent  indorsee  acquires  nothing  by  the  unau- 
thorized indorsement  of  a  married  woman.  Connor  t?.  Martin,  1  Strange, 
516;  Ravrlinson  v.  Stone,  3  Wils.  1,  5. 

5  Prescott  Bank  v.  Caverly,  7  Gray,  217. 

6  See  Tiedeman  on  Real  Property,  §  242. 

128 


CH.   IV.]  PERSONS    INCAPACITATED.  §    64 

representatives  can  make  no  claim  to  any  part  of  it.^  The 
wife's  legal  personality  is  so  completely  absorbed  in  that 
of  the  hasband,  that  they  cannot  at  common  law  contract 
with  each  other.  It  is  therefore  held  that  a  note  or  bill 
drawn  by  the  husband  in  favor  of  his  wife  is  absolutely 
-  void,  and  she  cannot  maintain  any  action  upon  it,  even 
against  his  executors  after  his  death  ;2  except  where  the 
note  or  bill  represents  money  paid  to  him  out  of  her  sepa- 
rate estate, when  it  will  be  enforcible  in  equity  against  his 
estate  as  a  trust. ^ 

I  §  64.  Reduction  of  wife's  choses  in  action  to  posses- 
sion. —  The  husband  does  not  acquire  the  title  to  the  wife's 
choses  in  action  merely  by  his  marriage  to  her  He  must 
first  reduce  them  to  his  possession.  If  he  dies  without 
having  done  so,  the  choses  in  action  at  his  death  again  be- 
come the  absolute  property  of  the  widow,  and  do  not  pass 
to  his  personal  representatives.*  So,  also,  at  common  law, 
since  the  husband  was  entitled  to  be  her  administrator,  and 
the  English  statute  of  distribution  did  not  provide  for  the 
distribution  of  the  wife's  personal  property,  the  husband 
could  claim  in  his  representative  capacity  all  the  choses  in 
action  which  he  had  failed  to  reduce  to  possession  during 
her  life.^  It  has  also  been  held  that  if  the  husband  after 
his  wife's  death  gets  possession  of  her  choses  in  action,  he 

1  Draper  v.  Jackson,  16  Mass.  480;  Richardson  v.  Daggett,  4  Vt.  336; 
Borst  V.  Spellman,  4  N.  Y.  284;  Sanford  v.  Sauford,  45  N.  Y.  723;  Allen 
V.  Tate,  58  Miss.  588. 

*  Gay  V.  Kingsley,  11  Allen,  345;  Jackson  v.  Larks,  lO  Cush.  550; 
Sweat  V.  Hall,  8  Vt.  187. 

*  Murray  v.  Glasse,  23  L.  J.  Ch.  126;  McCampbell  v.  McCampbell,  2 
Lea,  661. 

*  Draper  v.  Jackson,  16  Mass.  480;  Hayward  v.  Hayward,  20  Pick. 
517;  Vance  v.  McLaugnliu,  8  Gratt.  289;  May  v.  Boisseau,  12  Leigh,  521; 
Gaters  v.  Madeley,  6  Mees.  &  W.  423;  Richards  v.  Richards,  2  B.  &  Ad. 
447;  Philliskirk  v.  Pluckwell,  2  Maule  &  S.  393. 

*  Betts  V.  Kimptou,  2  Barn.  &  Ad.  273;  I  Parsons'  N.  &  B.  85. 

9  129 


§    G.')  PERSONS    INCAPACITATED.  [CH.  IV. 

is  entitled  to  them,  although  he  has  not  taken  out  letters  of 
administration.^ 

But  the  distribution  of  a  married  woman's  estate  is 
now  regulated  by  statute  in  all  of  the  American  States; 
and  if  a  husband  has  failed  to  reduce  the  wife's  choses 
in  action  to  possession  during  her  life,  he  can  after  her 
death  only  claim  the  share  in  them  which  the  statute  of 
distribution  gives  him.  It  is  also  important  to  know  what 
nets  on  the  part  of  the  husband  will  amount  to  a  reduction 
to  possession.  Of  course,  negotiation  of  her  bills  and  notes 
or  collection  of  them,  would  be  a  reduction  to  possession 
if  he  applied  the  proceeds  to  his  own  use.^  Ordinarily  any 
act,  indicating  the  purpose  to  apply  to  his  own  use  his 
wife's  choses  in  action  will  be  a  sufficient  reduction  to  pos- 
session.'' But  the  mere  custody  of  the  property,  or  the  in- 
tention to  appropriate  without  the  act,  will  not  be  sufficient.^ 

§  65.  The  bankrupt  or  insolvent  payee.  — When  an  in- 
solvent person  goes  into  bankruptcy,  all  his  property  passes 
to  his  assignee,  and,  of  course,  his  bills  and  notes  receiv- 
able are  thereafter  only  collectible  by  his  assignee.  Any 
attempted  indorsement  by  him  of  a  bill  or  note  after  bank- 

1  Whitakerv.  Whitaker,  G  Johus.  112;  Revel  v.  Revel,  2  Dev.  &  Bat. 
272;  Lee  v.  Wheeler,  4  Ga.  541. 

2  Oglander  v.  Baston,  1  Vera.  396;  s.  c.  2  Ves.  sr.  677;  Scarpellini  v. 
Atchesou,  7  Q.  B.  (53  E.C.  L.  R.)  864;  Tiittle  v.  Fowler,  22  Conu.  58;  1 
Parsous'  N.  &,  B.  86.  But  paymeut  of  interest  or  part  of  principal  to  the 
husband  -nould  be  only  a  reduction  pro  tanto,  Nash  v.  Nash,  2  Mad.  133; 
Hart  II.  IStepUens,  G  Q.  B.  937;  and  where  the  proceeds  of  the  payment  in 
full  are  held  for  the  benefit  of  the  wife,  it  will  not  be  considered  a  re- 
duction to  possession,  Stanwood  v.  Stanwood,  17  Mass.  57.  An  assign- 
ment of  them  under  the  insolvent  laws  has  also  been  held  to  be  effective 
reduction  to  possession.  Glasgow  v.  Sands,  3  Gill  &  J.  96;  Richwiue  v. 
Heiiu,  1  Penn.  373. 

3  1  Parsons'  N.  B.  86;  1  Daniel's  Negot.  Inst.,  §  257, 

*  Holmes  v.  Holmes,    28  Vt.  765;  Blount  v.  Bestland,  5  Ves.  jr.  616. 
See  Schouler's  Dom.  Rel.  119. 
130 


GH.  IV.]  PERSONS    INCAPACITATED.  §     ()6 

ruptc>'  will  be  void.^  But  if  he  sold  the  paper  before  his 
bankruptcy,  the  title  of  the  purchaser  will  be  good  against 
the  assignee,  although  the  indorsement  was  made  after 
bankruptcy. 2  If,  however,  one  should  make  a  bill  or  note 
payable  to  a  bankrupt,  he  cannot  deny  his  capacity  to 
make  a  legal  indorsement,  and  the  indorsee  can  sue  up- 
on the  instrument.^ 

^  ()6.  Alien  enemies  as  parties  to  commercial  paper.  — 

The  fact  that  one  of  the  parties  to  a  commercial  paper  is  an 
alien  does  not  affect  its  validity.  But  if  he  is  an  alien  ene- 
my by  the  common  international  law  of  the  civilized  world, 
the  paper  is  declared  to  be  absolutely  void.  All  bills  of 
exchange,  and  promissory  notes,  negotiated  between  per- 
sons, whose  countries  are  then  at  war  with  each  other,  are 
void,  and  cannot  be  enforced  after  termination  of  hostili- 
ties.* The  reason  for  this  rule  as  stated  by  Mr.  Daniel, ^  is, 
that  "  the  hostile  countries  become  sealed  as  against  each 
other  ;  and  both  for  the  purpose  of  identifying  the  citizen 
thoroughly  and  emphatically  with  the  policy  and  interests 

1  1  Daniel's  Negot.  Inst.,  §  260;  1  Parsons'  N.  &  B.  153. 

-  Smith  V.   Pickering,  Peake,  50;  Watkins  v.  Maule,  2  Jac.  &  W.  237; 
Hersey  v.  Elliott,  67  Me.  527;  Hughes  v.  Nelson,  28  N.  J.  Eq.  549. 

3  Dayton  v.  Dale,  2  B.  &  C  293. 

*  Willisou  V.  Patterson,  7  Taunt.  439;  s.  c.  1  Moore,  133.  This  rule 
was  applied  in  numerous  cases  to  commercial  paper  negotiated  between 
citizens  of  the  United  States  and  of  the  Confederate  States,  during  the 
great  American  civil  war.  The  Venice,  2  Wall.  258;  The  Hampton,  5 
Wall  372;  The  William  Bagaley,  5  Wall.  377;  Hanger  v.  Abbott,  6  Wall. 
532;  Ward  v.  Smith,  7  Wall.  447;  The  Prize  Cases,  2  Black,  635;  Woods 
V.  Wilder,  43  N.  Y.  164;  Billgery  v.  Branch,  19  Gratt.  393;  Moon  v.  Fos- 
ter, cited  in  19  Gratt.  433;  s.  c.  Chase's  Decisions,  222;  McVeigh  v.  Bank 
of  Old  Dominion,  26  Gratt.  785:  Tarleton  v.  Southern  Bank,  49  Ala.  229. 
But  it  seems  that  if  a  citizen  of  one  country  draws  in  favor  of  his  own 
government  on  the  Atizeu  of  a  country  at  war  with  his  own,  it  is  a  valid 
bill  of  exchange.  United  States  v.  Barker,  1  Paiue  C.  C.  156;  Haggard 
V.  Conkwright,  7  Bush,  16. 
.  5  1  DHniel's  Negot,  lust.,  §  216. 

131 


§    ()G  PERSONS    INCArACITATEU.  [cil,   IV. 

of  his  country,  and  of  preventing  communications  to  the 
enemy,  which  might  be  damaging  in  their  character,  the 
law  of  nations  absolutely  prohibits  all  intercourse  between 
the  citizens  of  belligerent  countries,  and  pronouces  all  con- 
tracts between  them  utterly  void.  "^  The  rule  not  only  ap- 
plies to  citizens  of  belligerent  countries,  but  also  to  alien 
residents. 2  The  rule  does  not  apply  to  neutrals,  so  that  the 
citizen  of  one  belligerent  country  may  draw  on  the  citizen 
of  another  in  favor  of  a  neutral,  and  the  bill  will  be  valid. ^ 
So,  also,  is  it  permissible  for  a  prisoner  of  war  to  draw  a 
bill  of  exchange  on  a  citizen  of  his  own  country,  to  pay  for 
necessaries,  or  for  the  ransom  of  a  captured  ship,  or  the 
repair  of  one  protected  by  cartel  between  the  combatants.* 
But,  with  these  exceptions,  the  rule  is  strictly  enforced  in 
all  civilized  countries. 

1  Griswokl   v.  Waddington,  16  Johns.  4^8;  The  Julia,  8  Cranch,  131; 
Wheaton's  International  Law;   1  Parsons'  N.  &  B.  152;  1  Kent  Com.  67. 

2  McConnell  v.  Hector,  3  Bos.  &P.  707;  Roberts  v.  Hardy,  3   Maule  & 
S.  533. 

3  1  Daniel's  Negot.  Inst.,  §  220;  Story  on  Bills,  §§  103,  104. 

*  Danbuz  v.  Morhead,  6  Taunt.  332;  Coruu  v.  Blackburn,  2  Doug.  641; 
Ricord  v.   Bettenheny,   3  Burr.   1734;  Yates  v.  Hall,  1  T.  R.  73;  Lacltley 
V.  Farse,  15  Johns.  338;  Patts  v.  Bell,  8  T.  R.  548. 
132 


CHAPTEE     Y. 

THE  LAW  OF   AGENCY   IN  ITS  APPLICATION  TO  COMMERCIAL 

PAPER. 

Section  72,  The  geueral  principle  of  agency. 

73.  Capacity  of  persons  to  become  agents. 

74.  Married  women  as  agents  of  liusbands. 

75.  Tlie  manner  of  creating  tlie  agency  —  Express  authority. 

76.  Implied  authority  of  agents. 

77.  Authority  implied  from  express  authorities, 

78.  Authority  implied  from  appointment  to  a  particular  clerk- 

ship or  office. 

79.  Authority  implied  from  previous  recognitions  or  ratifica- 

tions of  agency. 

80.  Revocation  of    authority  —  Presumed  continuance   of  au- 

thority. 

81.  Effect  of  special  instructions  upon  general  authority. 
81a.  Signature  by  procuration. 

82.  Implied  limitation  of  agent's  authority  to  act  for  the  benefit 

of  principal. 

83.  Ratification  of  unauthorized  acts. 

84.  Liability  of  agent  for  unauthorized  acts. 

85.  Form  of  signature  by  the  agent. 

86.  Exceptions  to  the  liability  of  agents. 

87.  Liability  of  principal  on  commercial  paper  executed  in  the 

agent's  name. 

88.  Action  by  principal  on  commercial  paper  made  payable  to 

his  agent. 

89.  Agent  cauuot  delegate  his  authority. 

§  72.  The  general  principle  of  agency. — The  affairs 
of  life  become  so  complicated,  tLiat  it  often  becomes  im- 
possible for  one  to  attend  to  all  of  his  business  personally, 
and  he  is  required  to  employ  agents  to  do  it  for  him.  In 
recognizing  this  practical  need  of  agents  in  the  prosecution 
of  almost  every  kind  of  business,  the  law  concedes  to  every 
man  the  power  to  act  through  his  agents  to  the  same  extent 

133 


§    73  THE    LAW    OF    AGEXCY.  [CH.   V. 

that  he  can  himself;  and  lays  down  the  broad  rule  of  Yia- 
hility,  qui  facit  pei'  aJium^  facit  per  se.  It  is  therefore 
not  necessary  for  one  to  execute  his  own  contracts ;  he 
may  employ  an  agent  to  execute  them  for  him,  and  they 
will  be  as  binding  upon  him  as  if  he  had  executed  them 
himself.  So  may  one  authorize  another  to  make,  draw, 
accept  and  indorse  commercial  paper  for  him.  There  are 
but  three  requirements  to  be  complied  with,  in  order  that 
the  acts  of  the  agent  may  be  lawfully  imputed  to  the  prin- 
cipal, viz.:  First,  that  the  principal  himself  was  compe- 
tent to  make  contracts,  and  hence  to  employ  an  agent ; 
secondly,  that  the  agent  was  competent  to  act  as  such ;  and 
Ihirdhj,  that  he  was  authorized  to  do  the  particular  thing 
which  he  did.  The  first  requirement  has  been  already  fully 
considered  in  the  preceding  chapter,  in  which  was  discussed 
the  capacity  of  parties  to  commercial  paper. 

§  73.  Capitcity  of    persons    to    become    agents. — The 

law  does  not  require  the  same  degree  of  mental  ability  or 
capacity  to  be  an  agent,  as  to  be  a  principal.  Indeed,  there 
is  very  little  legal  restriction  upon  the  power  to  be  agents. 
For  wdiile  insane  persons,  infants,  married  women,  aliens 
and  the  like  are  incapacitated  from  making  contracts  for 
themselves,  they  ma}'"  act  to  the  fullest  extent  as  agents  of 
others.^  It  is  doubtful  whether  an  infant  of  such  tender 
years,  or  a  lunatic  suffering  from  so  great  a  dementia 
that  he  Could  not  understand  the  nature  of  the  business 
he  was  to  transact,  could  be  a  lawful  agent. ^  But  I  imag- 
ine that  the  mental  incapacity  in  such  a  case  would 
simply  make  it  an  impossibility  for  the  agent  to  attend 
to     the    business.     But,    as    long    as    the    incapacity    was 

1  1  Daniel's  Negot.  lust.,  §  272.    During  the  existence  of  slavery,  slaves 
were  frequently  employed  as  agents,  although  held  incapable  of  making 
contracts  for  themselves.     The  Governor  v.  Dailey,  14  Ala.  469. 
1  Daniel's  Xegot.  Inst.,  §  272. 

134 


CH.  v.]  THE    LAW    OF    AGEXCT.  §     74 

not  SO  complete,  no  valid  objection  could  be  raised  to  hi& 
acting  as  the  agent  in  making  contracts,  or  in  doing  any- 
thing else,  the  doing  of  which  will  not  prove  injurious  to 
or  dangerous  to  any  one  but  the  principal. 

§  74.  Married  women  as  agents  of  husbands.  —  Al- 
though married  women  were  at  common  law  prohibited 
from  making  any  kind  of  contract  with  anybody,  and  most 
especially  with  her  husband,  she  can  be  the  agent  of  her 
husband  to  the  fullest  extent  of  his  power  to  contract.* 
She  may  with  his  consent  make  and  execute  all  kinds  of 
commercial  paper.  But,  of  course,  her  authority  to  act  for 
him  must  be  proved  to  have  been  given  her  expressly,  or 
implied  from  allowing  her  to  make  purchases  on  his  credit.^ 
Every  husband  is  obliged  by  law  to  furnish  his  wife  with 
the  necessaries  of  life;  and  if  he  fails  to  do  so,  she  is  au- 
thorized by  the  law  to  purchase  them  on  his  credit.^  There 
cannot  be  much  doubt  that  if  she  gives  a  note  for  these 
purchases,  in  her  husband's  name,  he  could  be  held  liable 
on  it.  When  the  husband  adopts,  as  he  may  do,  his  wife's 
name  in  his  business,  notes  and  bills,  executed  or  indorsed 
in  her  name,  whether  by  himself  or  by  her,  will  be  as  bind- 
ing upon  him  as  if  they  were  executed  or  indorsed  in  his 
own  name.*  And  a  note  or  bill  executed  in  her  name 
without  authority,  may  be  subsequently  ratified  by  him.^ 

1  1  Black.  Com,  442;  Coldstone  v.  Toney,  0  Bing.  N.  C.  98;  Hopkins 
V.  Mollinieux,  4  Wend.  465;  Singleton  v.  Mann,  3  Mo.  464;  Eugman  v 
Immel,  59  Wis.  249. 

2  Smith  V.  Pedley,  Chitty,  Jr.,  on  Bills,  1241;  Reakert  v.  Sanf  rd,  5 
Watts  &  S.  164. 

3  1  Bishop  Mar,  &  Div.,  §§  553,  555,  565,  568  et  seq.,  578;  Schouler's 
Dom,  Rel.  76-79,  85;  Mudge  v.  Bullock,  83  111.  22, 

*  Prestwick  v.  Marshall,  7  Bing.  565;  Cotes  v.  Davis,  1  Camp,  485? 
Hancock  Bk.  v.  Joy,  41  Me.  568;  Abbott  v.  McKinley,  2  Miles,  220; 
Menkins  v.  Heringhi,  17  Mo,  297,     See  Miller  v.  Delamater,  12  Wend.  433. 

*  Cotes  V.  Davis,  1  Camp.  485;  Linders  v.  Bradwell,  5  C.  B,  583;  Shaw 
V.  Emery,  38  Me.  484;  Mudge  v.  Bullock,  83  111.  23, 

135 


§     ".")  TIIK    LAW    or    AGENCY.  [CH.    V. 

But,  unless  he  has  authorized  or  ratitied  her  use  of  her  own 
name  in  executing  notes  and  bills  as  his  agent,  she  must 
sign  her  husband's  name.^ 

§  75,  The  manner  of  creating  the  agency  —  Express 
authority.  —  Agencies  are  created  either  by  express  or  im- 
plied authority,  or  by  subsequent  ratitieation.  When  the 
authority  is  express,  there  is  no  special  form  to  be  ob- 
served in  the  grant  of  it.  As  a  general  rule,  it  need  not 
be  in  writing,  even  though  the  statute  of  frauds  may  re- 
quire the  contract,  which  the  agent  is  to  execute,  to  be  in 
writing. 2  But  if  the  agent  is  to  execute  a  deed  of  convey- 
ance, or  any  other  instrument  under  seal,  the  authority 
must  be  under  seal,  the  rule  of  the  common  law  beins:  that 
the  power  of  attorney,  or  authorization,  must  be  by  a  writ- 
ing of  as  high  a  character  as  that  which  is  to  be  executed.^ 
Therefore,  a  verbal  authority  to  sign  a  commercial  paper 
for  another  is  sufficient.*  But  while  a  verbal  authority  is 
sufficient,  if  a  written  authority  is  given,  as  a  matter  of 
caution,  the  terms  of  the  agency,  and    the    scope   of  the 

J  Miuard  v.  Mead,  7  Weud.  68;  Abbott  v.  McKiuley,  2  Miles,  220. 

*  Emerson  v.  Providence  Hat  Man'f'g  Co.,  12  Mass.  237;  Shaw  v. 
Mudd,  8  Pick.  9;  Miles  v.  Cook,  1  Grant  (Pa.)  58;  Small  v.  Owings,  1  Md. 
Ch.  363;  Yerby  v.  Griggsby,  9  Leigh,  387;  Barker  v.  Garvey,  83  111.  184; 
Long  V.  Hartvvell,  5  Vroom,  ]  16;  Challoner  v.  Bouck,  56  Wis.  652;  Dev- 
erell  v.  Bolton,  18  Ves.  505;  Rucker  v.  Commeyer,  1  Esp.  105. 

3  "Wheeler  v.  Nevins,  34  Me.  54;  Gage  v.  Gage,  10  Post.  (N.  H.)  420; 
Blood  V.  Goodrich,  9  Wend.  68;  Elliott  v.  Stocks,  67  Ala.  336;  Harshavv 
V.  McKesson,  65  N.  C.  688;  McMurtry  v.  Brown,  6  Neb,  368;  Rowe  v. 
Ware,  30  Ga.  278;  Smith  v.  Dickinson,  6  Humph.  261;  Maus  v.  Worthing, 
3  Scam.  26;  Tappan  v.  Redfleld,  1  Halst.  Ch.  339;  Rhode  r.  Louthaiue,  8 
Blackf.  413;  Spurr  v.  Trimble,  1  A.  K.  Marsh.  278;  McMurtry  v.  Frank,  4 
T.  B.  Mon.  39;  Mitchell  v.  Sproul,  5  J.  J.  Marsh.  264;  Cooper  v.  Rankin, 
5Binn.  613;  Gordons.  Bulkley,  14  S.  &  R.  331;  Banorgee  v.  Hovey,  5 
Mass.  11;  Shuetze  v.  Bailey,  40  Mo.  69;  St.  Butterfield  r.  Beal,  3  Ind. 
203;  Kime  v.  Brooks,  9  Ired.  218;  Smith  v.  Perry,  5  Dutch.  74. 

*  Daniel's  Negot.  Inst.,  §  274;  1  Parsons'  N.  &  B.  91.  But  it  was  once 
held  that  a  formal  authority  was  required  for  this  purpose.  See  Mana 
0.  King,  6  Muuf .  428. 

13(5 


CH.  v.]  THE    LAW    OF    AGENCY.  §     "7 

agent's  authority,  are  governed  by  the  written  authority. 
Parol  evidence  is  inadmissible  to  control  them.^ 

§  76.  Implied  authority  of  agents.  —The  authority  of 
agents  may  also  rest  upon  implication,  and  there  may  be 
three  kinds  of  implied  authority:  First,  implied  from  ex- 
press authorities  ;  second,  from  appointment  to  a  particular 
office  or  clerkship  by  name ;  and  third,  implied  from  pre- 
vious ratifications  or  recognition  of  the  agency. 

§  77.  Authority  implied  from  express  authorities.  — 

We  have  this  general  rule  that  applies  to  all  cases  of  im- 
plied agencies,  that  no  authority  will  be  implied  from  an 
express  authority,  unless  it  is  positively  needful  for  the  per- 
formance of  the  main  duties  contemplated  by  the  express 
authority.  Whatever  powers  are  strictly  necessary  to  the 
effectual  exercise  of  the  express  powers,  will  be  conceded 
to  the  agent  by  implication.^  In  order,  therefore,  that  the 
authority  to  make  or  draw,  accept  and  indorse,  commercial 
paper  as  the  agent  of  another  may  be  implied  from  some 
other  express  authority,  it  must  be  shown  to  be  strictly 
necessary  to  the  complete  execution  of  the  express  power. 
And  the  execution  and  negotiation  of  commercial  paper  are 
considered  by  the  commercial  world  so  liable  to  the  inflic- 
tion of  injury  on  the  principals,  if  this  authority  is  given  to 

1  1  Daniel's  Negot.  Inst.,  §  274. 

2  Gerish  v.  Maher,  70  111.  470;  Taylor  ».  Chicago,  etc.,  R.  R.  Co.,  74 
111,  86;  Reynolds  v.  Ferree,  86  III.  570;  Smith  v.  Kidd,  68  N.  Y.  130; 
Covill  V.  Hill,  4  Denio,  323;  Case  v.  Jennings,  17  Texas,  661;  Rhine  v. 
Blake,  59  Texas,  240:  Doubleday  v.  Kress,  50  N.  Y.  410;  Smith  r.  Jolm- 
son,  71  Mo.  382;  Barns  v.  Hannibal,  71  Mo.  449;  Star  Line  v.  Van  Vliet, 
43  Mich.  364;  Bentley  v.  Daggett,  51  Wis.  224;  Shackman  v.  Little,  87 
Ind,  181;  Huntly  v.  Mathias,  90  N.  C,  101;  Levi  v.  Booth,  58  Md.  305; 
Holbrook  v.  Oberne,  56  Iowa,  324;  Valentines.  Piper,  22  Pick.  85;  Heath 
Nutter,  50  Me.  378;  Stauwood  v.  Laughlin,  73  Me.  112;  Taylor  v.  Starkey, 
59  N.  H.  142;  Borel  v.  Rollins,  30  Cal.  408:  Haydock  v.  Stow,  40  N.  Y. 
363. 

137 


§     77  Till-:    LAW    OF    AGKNCY,  [CH.  V. 

agents, —  the  general  custom  being  to  reserve  this  power 
for  personal  exercise,  —  that  the  presumption  of  the  law  is 
more  strongly  opposed  to  an  implied  authority  to  execute 
and  negotiate  commercial  paper  than  to  do  anything  else. 
Hence,  inthis  connection,  the  rule  is  strictly  enforced,  that 
the  authority  to  execute  and  indorse  bills  and  notes  as  agent 
will  not  be  implied  from  an  express  authority  to  transact 
some  other  business,  unless  it  is  absolutely  necessary  to  the 
exercise  of  the  express  authority.  In  the  note  will  be  found 
a  number  of  cases  in  which  it  has  been  held  that  there  w  as 
no  implied  authority  to  make,  accept  or  indorse  commercial 
paper. ^  And  even  where  there  is  a  general  authority  "to 
transact  all  business,"  or  "to  do  all  lawful  acts  concerning 
all  the  principal's  business  of  what  nature  or  kind  soever,' 
it  is  very  generally  held  that  the  power  to  execute  or  nego- 
tiate bills  and  notes  is  not  included.^  This  is  particularly 
true  where  this  general  grant  of  authority  follows  specific 
grants  of  authority.  In  these  cases,  the  ordinary  rule  of 
construction  would  apply,  and  only  those  powers  would  be 
implied  in  this  general  grant,  which  are  necessary  or  sup- 
plementary to  the  specific  powers  previously  granted.^  But 
where  the  authority  is  to   sign  the  name  of   the  principal 

1  The  authority  to  execute  or  negotiate  commercial  paper  cannot  be 
implied  from  an  authority  to  make  purchases  and  pay  for  them.  Taber 
V.  Cannou,  8  Met.  456;  Browu  v.  Parker,  7  Allen,  339;  Gould  v.  Norfolk 
Lead  Co.,  9  Cush.  338;  or  to  buy  and  sell  goods,  Emerson  v.  Providence 
Hat  Manuf .  Co.,  12  Mass.  237;  or  from  authority  to  advance  money, 
Webber  v.  Williams'  College,  23  Pick.  302. 

2  Sewanee  Mining  Co.  v.  McCall,  3  Head,  619;  Hogg  v.  Smith,  1  Taunt. 
347;  Hay  v.  Goldsmidt,  2  J.  P.  Smith.  79;  Tliompson  v.  Bk.  of  British 
N.  Am.,  82  N.  Y.  1;  Robinson  Chemical  Nat.  Bk.,  86  N.  Y.  407;  Kilgour 
r.Finlyson,  1  H.  Bl.  155;  EsdaiUe  w.  La  Nanze,  1  Younge&C.  394:  Rossiter 
V.  Rossiter,  8  Wend.  494.  But  see,  contra,  Bailey  v.  Rawley,  1  Swan,  205; 
Frost  V.  Wood,  2  Conn.  23. 

3  Rossiter  u.  Rossiter,  8  Wend.  494;  Hay  v.  Goldsmidt,  2  .J.  P.  Smith, 
79;  Hogg  V.  Smith,  1  Taunt.  347;  Esdaille  v.  La  Nanze,  1  Youuge  &  C 
347 

138 


CH.  V   ]  THE    LAW    OF    AGENCY-  §    77 

whenever  requisite  or  expedient,  the  power  to  draw  bills  of 
exchange  or  make  promissory  notes  will  be  included.^ 

Not  only  will  the  authority  to  execute  or  negotiate  bills  and 
notes,  as  agent,  not  be  implied  from  the  express  authority 
to  do  other  acts,  foreign  to  commercial  paper,  unless  this 
authority  is  necessary  to  the  complete  exercise  of  the  ex- 
press authority;  but  so,  also,  will  the  courts  refuse  to 
imply  the  power  to  make  a  note  from  the  authority  to 
draw  a  bill,  or  the  power  to  indorse  or  accept  a  bill  from 
the  power  to  draw  one.  Each  one  of  these  powers  may 
be  granted  separately,  and  each  may  be  exercised  independ- 
ently of  the  possession  of  the  others.^  So,  also,  will  the 
authority  to  execute  a  note,  not  include  the  power  to  renew ;  ^ 
and  where  the  power  to  execute  a  note  or  draw  a  bill  is 
coupled  with  certain  conditions,  the  conditions  must  be 
complied  with.  Thus,  the  authority  to  sign  and  negotiate 
pa))er  payable  at  a  particular  bank  does  not  include  an  au- 
thority to  negotiate  at  any  other  bank ;  *  nor  can  the  agent 
deviate  from  the  instructions  concerning  the  time  when  the 
paper  shall  become  due  and  payable.^  Nor  can  the  agent 
make  a  note  payable  to  a  different  payee  than  the  one 
specified,  although  the  proceeds  are  devoted  to  the  same 
purpose.^ 

1  Dollfus  V.  Frosch,  1  Denio,  368. 

2  Robinson  v.  Yarrow,  7  Taunt.  455;  Attwood  v.  Munniags,  7  B.  &  C. 
278;  Murray  v.  East  India  Co.,  5  B.  &  Aid.  204;  Bank  of  Deer  Lodge  v. 
Hope  Mining  Co.,  3  Montana,  146;  Cuyler  v.  Merrifleld,  12  N.  Y.  S.  C. 
(5  Hun)  559;  School  Districts.  Sipley,  54  111.  284;  Sewanee  Mining  Co. 
V.  McCall,  3  Head,  621;  Prescott  v.  Flinn,  9  Biug.  19. 

3  "Ward  V.  Bk.  of  Kentucky,  7  Mon.  93. 

*  Craighead  v.  Peterson,  72  N.  Y.  279;  Morrison  v.  Taylor,  6  Mon.  82. 

^  Batley  v.  Cars-well,  2  Johns.  48.  But  if  the  deviation  is  not  mate- 
rial, as  where  the  authority  is  to  renew  a  note  at  sixty  or  ninety  days,  it 
will  be  held  to  be  a  good  execution  to  renew  at  eighty  days.  Bk.  of  So. 
Car.  V.  McWillie,  4  MoCord,  438.  See  also  Adams  v.  Flanagan,  35  Vt. 
410. 

6  Hortou  V.  Townes,  6  Leigh,  59, 

139 


§    78«  THE    LAW    OF    AGENCY.  [CH.  V. 

The  authority  to  sell  u  uote  does  not  necessarily-  im- 
ply the  authority  to  guarantee  its  payment,  for  one  may 
be  an  agent  to  sell,  without  the  power  of  indorsement.^ 
So,  also,  the  power  to  collect  does  not  imply  the  power  to 
indorse  and  transfer  a  uote  or  bill.^ 

§  78.  Authority  implied  from  appointment  to  a  par- 
ticular clerkship  or  oflace.  — "Where  one  is  appointed  to  an 
office  or  clerkship,  one  of  whose  customary  duties  is  to 
execute  and  negotiate  bills  and  notes  in  the  name  of  the' 
principal,  the  authority  need  not  be  expressly  given.  It 
will  be  implied  from  the  appointment.  Thus,  an  appoint- 
ment as  cashier  of  a  banking  house  or  business  concern  im- 
plies the  grant  of  an  authority  to  execute  and  negotiate 
bills  and  notes. ^  But  this  power  does  not  fall  within  the 
scope  of  authority  of  the  ordinary  clerks  and  salesmen.* 

§  78«.  The  authority  of  joint  agents  and  of  the  agent 
of  joint  principals.  —  If  two  or  more  persons  are  author- 
ized to  act  as  the  agents  of  another,  they  are  required  to 
act  jointly  in  order  to  bind  their  principal,  unless  they  are 

1  Browu  V.  Donnell,  49  Me.  421;  Feun  v.  Harrison,  3  T.R.  757;  Graul 
V.  Strutzel,  53  Iowa,  712. 

2  Goodfellow  V.  Landis,  36  Mo.  168;  Smith  v.  .Jolinsou,  71  Mo.  382; 
Ryhiner  v.  Feiclihert,  92  111.  305;  Hogg  v.  Suaith,  1  Tauut.  347;  Graham 
V.  U.  S.  Sav.  Inst.,  46  Mo.  187;  Russell  v.  Drummoud,  6  lud.  216  (seut 
to  an  attorney  at  law  for  collection) . 

'  Edwards  V.  Thomas,  66  Mo.  482;  Morse  v.  Mass.  Nat.  BIj.,  1  Ilolmes 
C.  C.  209.  See  Sturges  v.  Bk.  of  Circleville,  11  Ohio  St.  153;  Wild  v. 
Bk.  of  Passaraaquoddy,  3  Mason,  505;  Minor  v.  Mechanics'  Bk.  of  Alexan- 
dria, 1  Pet.  46;  United  States  v.  City  Bank  of  Columbus,  21  How.  356; 
Baldwin  r.  Bank  of  Newbury,  1  Wall.  234;  Badger  v.  Bk.  of  Cumberland, 
26  Me.  428;  Bank  of  Pennsylvania  v.  Reed,  1  Watts  &  S.  101. 

*  Terry  v.  Fargo,  10  Johns.  114;  Paige  v.  Stone,  10  Met.  160;  Smith  v. 
Gibson,  6  Blackf  .  369;  Davidson  v.  Stanley,  2  Man.  &  G.  121;  masters 
of  vessels  and  supercargoes  do  not  possess  this  implied  authority,  Scott 
1'.  McLellau,  2  Greenl.  199;  Bowen  r.  Stoddard,  10  Met.  375;  May  v. 
Kelly,  27  Ala.  497. 
140 


CH.  v.]  THE   LAW   OF   AGENCY.  §    79 

expressly  authorized  to  act  severally.  In  the  absence  of 
express  authority,  the  act  of  one  agent  will  not  bind  the 
principal.  It  has  thus  been  held  that  where  one  author- 
izes two  persons  by  name  to  use  his  name  as  indorser  on 
negotiable  paper,  the  indorsement  of  his  name  by  one 
agent  without  the  co-operation  of  the  other  will  not  be 
binding  upon  the  principal,  for  he  only  authorized  an  in- 
dorsement by  the  two  acting  jointly.^  On  the  other  hand, 
if  two  or  more  persons  authorize  an  agent  to  act  for  them 
jointly,  as  where  they  authorize  the  agent  to  sign  their 
names  as  indorsers  to  certain  bills  and  notes,  the  agent  has 
power  to  bind  them  as  joint  indorsers.  And  it  was  held 
that  he  had  exceeded  his  authority  when  he  signed  their 
names  to  an  instrument  as  successive  indorsers,  the  liability 
being  in  that  case  relatively  different  from  the  liability  of 
joint  indorsers.^  But  it  is  also  a  rule  of  law,  that  where 
one  authorizes  another  to  sign  his  name  to  commercial 
paper,  it  is  an  authority  to  assume  a  several  liability  in  the 
name  of  the  principal ;  and  if  the  agent  undertakes  to  bind 
him  jointly  with  another,  the  act  is  not  binding  upon  the 
principal.^ 

§  79.  Authority  implied  from  previous  recognitions  or 
ratifications  of  agency.  — If  a  person  has,  in  the  capacity 
of  an  agent  for  another,  repeatedly  drawn  or  accepted 
bills,  or  executed  promissory  notes  for  him,  whether  with 
or  without  authority,  and  the  sup.posed  principal  has  rec- 
ognized or  ratified  the  act  of  the  agent,  by  payment  of  the 
bill  or  note,  or  in  any  other  way;  the  principal  will  be 
bound  by  any  subsequent  exercise  of  authority  of  a  like 
character,   on  the  ground  of  estoppel.     By   allowing  the 

1  Union  Bk.  v.  Beirne,  1  Gratt.  226;  Hartford  Fire  Ins.  Co.  v.  Wil- 
cox, 57  111.  180. 

2  Bank  of  U.  S.  v.  Beirne,  1  Gratt.  234. 

Stainback  v.  Reed,  11  Gratt.  281;  Bryan  «.  Berry,  6  Cal.  394. 

141 


§    bO  THE    LAW    OF   AGENCY.  [CH.  V. 

person  to  appear  as  a  duly  authorized  agent,  in  honoring 
the  bills  and  notes  previously  executed  by  him  as  agent,  he 
is  estopped  from  denying  the  authority  of  the  agent  as 
against  persons  who  deal  with  the  agent  in  reliance  upon 
this  evidence  of  authority.^  But  it  is  only  when  the  person 
dealing  with  the  agent  relies  upon  the  previous  ratified  as- 
sumptions of  authority  as  evidence  of  an  existing  authority, 
that  he  can  hold  the  principal  liable  on  an  unauthorized  act. 
If,  therefore,  the  bill  of  exchange  or  promissory  note  was 
not  taken  on  the  faith  of  these  similar  transactions,  as 
where  the  person  taking  them  either  knew  that  the  pre- 
vious transactions  were  unauthorized,  or  did  not  know  of 
them  at  all  when  he  took  the  paper,  and  only  discovered 
them  afterwards,  the  principal  is  not  estopped  from  show- 
ing that  he  had  not  authorized  the  transaction.^ 

§  80.  Revocation  of  authority  —  Presumed  continuance 
of  authority.  —  When  an  authorized  agency  is  limited  in 
point  of  time,  as,  for  example,  when  an  employer  in  his 
absence  authorized  an  agent  to  execute  and  negotiate  com- 
mercial paper  during  a  certain  time,  at  the  expiration  of 
that  time  his  authority  to  so  represent  his  employer  comes 
to  an  end  without  any  formal  or  informal  act  of  revoca- 
tion ;  and  any  subsequent  attempt  of  the  agent  to  execute 
such  paper  in  the  name  of  the  principal  will  not  bind  the 
latter.^  But  when  a  general  authority,  unlimited  in  point 
of  time,  is  given  to  an  agent  to  sign  the  principal's  name  to 


J  Prcscott  V.  Flinn,  2  Moore  &  S.  18  (9  Bing.  19)  ;  Barber  v.  Gingell,  3 
Esp.  GO;  Haughtou  V.  Ewbauk,  4  Camp.  188;  Neal  v.  Irving,  1  Esp.  CI; 
Abeel  v.  Seymour,  13  N.  Y.  S.  C.  (6  Huu)  650;  Stroh  v.  Hiuchman,  37 
Mich.  490. 

2  Cash  V.  Taylor,  8  Law  J.  262,  cited  in  Chitty  on  Bills  (13  Am.  ed.) 
41;  St.  John  v.  Redmond,  9  Port.  428;  1  Daniel's  Negot.  Inst.,  §  297;  1 
Parsons  N.  &  B.  92. 

3  Manufacturers  Nat.  Bk.  v.  Barnes,  65  III.  69.  See  Weiser  v.  Deni- 
son,  10  N   Y.  68. 

142 


t 

CH.  V.j  THE   LAW    OF    AGENCY.  §    80 

commercial  paper,  then  the  authority  continues  until  it  is 
revoked.  The  principal  ordinarily  has  the  power  to  dis- 
charge the  agent  or  revoke  his  authority  at  any  time.  This 
is  so,  even  though  the  agency  is  expressly  declared  to  be 
irrevocable. 1  The  only  exception  to  the  right  of  revoca- 
tion is  in  the  cases  where  the  agent's  authority  is  coupled 
with  an  interest  of  his  own  in  the  exercise  of  the  authority ; 
as,  for  example,  when  a  bill  of  exchange  or  promissory 
note,  or  any  other  commercial  paper,  is  pledged  by  the 
holder  as  collateral  security  for  his  debt.  In  such  a  case 
the  authority  of  the  pledgee  to  sell  the  thing  pledged  could 
not  be  revoked,  until  the  pledge  is  released  by  the  payment 
of  the  debt. 2 

The  death  of  either  party  operates  ipso  facto  as  a  revo- 
cation of  the  agency,^  and  the  exercise  of  the  authority 
by  the  agent  after  the  death  of  the  principal  will  be 
void,  even  though  neither  the  agent  nor  the  person  dealing 
with  him  knew  of  his  death.*     Where  the  authority  or  power 

^  MacGregor  v.  Gardner,  14  Iowa,  326;  Smart  v.  Sandars,  3  C.  B.  380; 
Blackstoue  u.  Butterraore,  3  Smith  (Pa.)  266;  Brookshire  u.  Voncanuou,  6 
Ired.  231;  Brookshire  v.  Brookshire,  8  Ired.  74;  Phillips  v.  Howell,  60 
Ga.  411;  Trumbull  v.  Nicliolsou,  27  111.  149. 

2  Hunt  V.  Rousmauier,  8  Wheat.  174;  "Walsh  u.  Whitcomb,  2  Esp.  565; 
Wheeler  v.  Knaggs,  8  Ohio,  169;  Varnura  v.  Meserve,  8  Allen,  158; 
Daugherty  v.  Moon,  59  Tex.  397;  Marzlon  v.  Pische,  8  Cal.  522;  Watson 
V.  King,  4  Camp.  272;  Whitehead  v.  Lord,  7  Exch.  691;  Hynson  v.  No- 
laud,  14  Ark.  710;  Hartley's  Appeal,  3  Smith  (Pa.)  212;  Blackstoneu.  But- 
terraore,  3  Smith  (Pa.)  266;  Smart  v.  Sandars,  3  C.  B.  380;  Hutchins  v. 
Hebbard,  34  N.  Y.  24;  Bouuey  v.  Smith,  17  111.  531;  Barr  v.  Schroeder, 
32  Cal.  609;  Postenu.  Rassette,  5  Cal.  467;  Chambers  v.  Seay,  73  Ala.  372. 

3  Boone  v.  Clark,  3  Crauch  C.  C.  389;  Gale  v.  Tappan,  12  N.  H.  145; 
Michigan  Ins.  Co.  v.  Leavenworth,  30  Vt.  11;  Scruggs  v.  Driver,  31  Ala. 
274;  Saltmarsh  v.  Smith,  32  Ala.  404;  Lehigh  Coal,  etc.,  Co.  v.  Mohr,  2 
Norris  (Pa.)  228 ;  Amore  v.  La  Motte,  5  Abb.  N.  C.146 ;  McDonald  v.  Black, 
20  Ohio,  185;  Turnan  v.  Temke,  84  111.  286:  Darr  v.  Darr,  59  Iowa,  81. 

*  Gait  V.  Galloway,  4  Pet.  332,  344;  Blades  v.  Free,  9  B,  &  C.  167; 
Smout  V.  Ilbery,  10  M.  &  W.  1 ;  Bank  of  Washington  v.  Peirson,  2  Crauch 
C.  C.  685;  Wilson  v.  Edmonds,  4  Fost.  (N.  II.)  517;  Davis  v.  Windsor 
Savmgs  Bk.,  46  Vt.  728;  Perries  v.   Aycineua,  3  Watts  &  S.  64;  Travers 

143 


§    80  THK    LAW    OF    AtiENCY.  [ciI,  V. 

is  coupled  with  an  interest,  it  seems,  nevertheless,  that  death 
will  work  a  revocation  of  it,  if  the  agent  can  only  exercise 
the  power  intheuamo  of  thededd  principal;  for,  to  employ 
the  language  of  Lord  Ellenborough,  *'  IIow  can  a  valid  act 
be  done  in  the  name  of  a  dead  man?"  ^  But  where  the 
authority  can  be  exercised  in  the  name  of  the  agent,  as  in 
the  case  of  a  pledge,  the  authority  will  not  be  revoked  by 
the  death  of  the  principal. ^ 

Insanity  of  agent  also  puts  an  end  to  the  agency,  where 
it  is  sufficient  to  affect  his  legal  capacity ;  and  where  the 
principal  is  insane,  the  authority  of  the  agent  is  revoked, 
certainly  where  the  person  dealing  with  him  knows  ©f  the 
insanity  of  the  principal.^  But  where  the  agency  is  coupled 
with  an  interest,*  or  where  the  insanity  was  very  slight  or 
unknown  to  persons  dealing  with  the  agent,®  the  agency  is 
held  very  generally  to  continue. 

As  has  already  been  explained,®  a  war  between  two 
countries  suspends  the  contracting  power  of  the  citizens  of 
those  countries  with  each  other.  But  if  a  foreigner  should 
have  an  agent  in  this  country,  with  the  authority  to  exe- 
cute, negotiate  and  honor  commercial  paper  in  his  name, 
the  breaking  out  of  war  between  the  two  countries  would 
not  revoke  this  agency,  except  so  far  as  the  exercise  of  the 
authority  Avould  require  communications  with,  or  remit- 
tances to  or  from,  the  alien  principal.  The  agent  can  still 
represent  his  alien  principal  in  all  transactions  taking  place 

V.  Crane,  15  Cal.  12;  Cleveland  v.  Williams,  29  Tex.  204;  Lewis  v.  Kerr, 
17  Iowa,  73. 

'  Watson  V.  King,  4  Camp.  272,  274;  Clayton  v.  Merrett,  52  Miss. 
85:3. 

2  Moore  v.  Hall,  48  Mich.  143;   Bennett  v.  Stoddard,  58  Iowa,  654. 

3  Drew  V.  Muun,  4  Q.  B.  1).  001;  Davis  v.  Laue,  10  N.  II.  156;  Hill  ». 
Day,  7  Stew.  Ch,  150. 

*  Ilagjs'art  v.  Ranger,  15  Fed.    Hep.  860;   Hill  v.   Day,  7  Stew.  Ch.  150. 

*  Hill  V.  Day,^7  Stew.  Ch.  150;  Drew  v.  Nuun,  4  Q.  B.  D.  661. 
6  See  ante,  §  c'o. 

144 


CH.  v.]  THE    LAW    OF    AGENCY.  §    81 

and  being  completed  within  the  limits  of  this  country.* 
But  it  seems  that  the  agency  must  have  been  created  be- 
fore the  commencement  of  hostilities.^  Except  where  the 
revocation  is  effected  by  the  death  of  the  principal,  it 
IS  not  sufficient,  in  order  to  revoke  the  authority  and  free 
himself  from  responsibility  for  the  subsequent  acts  of  the 
agent,  that  the  principal  notify  the  agent  of  the  revocation. 
One  having  dealings  with  the  agent  has  a  right  to  presume 
that  the  general  authority  of  the  agent  continues,  until  a 
notice  of  revocation  is  sent  to  him  or  published  to  the  Avorld 
at  larsfe.  Therefore,  an  agent  who  has  been  authorized  to 
execute  and  negotiate  or  indorse  commercial  paper  in  the 
name  of  his  principal,  can  still  bind  his  principal  after  a 
revocation  of  his  authority,  as  long  as  due  notice  of  the 
revocation  has  not  been  given  to  the  public.^ 

§  81.  !Effect  of  special  instructions  upon  general  au- 
thority.—  AVhere  an  agent,  such  as  the  cashier  of  a  banking 
house,  is  authorized  by  commercial  custom  to  make  or  draw, 
accept  and  indorse,  commercial  paper,  he  will  be  able  to 
bind  his  principal  by  such  acts,  even  though  they  are  in 
violation  of  the  express  instructions  given  him.  The  in- 
structions will  not  limit  the  authority  of  the  agent,  as  against 

1  Wardu.  Smith,  7  Wall.  447;  Clarke  v.  Morey,  10  Johns.  70;  Hub- 
bard V.  Matthews,  54  N.  Y.  48;  Manhattan  Ins.  Co.  v.  Warwick,  20  Gratt. 
614;  Hale  v.  Wall.  22  Gratt.  424;  Dennistown  v.  Imbrie,  Wash.  C.  C. 
399;  Fisher  v.  Krutz,  9  Kan.  510;  Moloney  v.  Stephens,  11  Heisk.  738; 
Monseaux  v.  Urquhart,  19  La.  485. 

2  United  States  v.  Grossraayer,  9  Wall.  72;  United  States  v.  Lapine,  17 
WalL  602;  Hubbard  v.  IVatthews,  54  N.  Y.  44;  Small's  Admr.  v.  Lump- 
kin, 28  Gratt.  835. 

3  1  Daniel's  Negot.  Inst.,  §  288;  Chitty  on  Bills  (13  Am  ed.),  42; 
Story  on  Agency,  §§  470,  473.  See  Munn  v.  Commission  Co.,  15  Johns. 
44;  Beard  v.  Kirk,  11  N.  H.  397;  Hancock  v.  Byrne,  5  Dana,  513;  Long- 
worth  ».  Conwell,  2  Blatchf.  469;  Planters'  Bk.  v.  Cameron,  3  Smed.  & 
M.  609;  Lamothet?.  St.  Louis  Marine,  etc., Co.,  17Mo.204;  Diversyv.  Kel- 
logg, 44  111.  114;  Baltimore  v.  Eschbach,  18  Md.  27G. 

10  145 


§   8l^  the  law  of  agency.  [Cll.  V. 

the  third  person  dealing  with  him,  unless  this  person  has 
notice  of  these  restrictive  instructions.^ 


§  81a.  Signature  "by  procuration."  —  But  where  the 
agent  signs  his  principal's  name  to  commercial  paper,  and 
affixes  the  words  *'  by  procuration  "  notice  is  thus  given  to 
all  subsequent  holders  of  the  paper  that  the  agent  is  acting 
under  special  or  written  instructions;  and  the  holder,  who 
fails  to  make  the  proper  inquiries  in  order  to  ascertain  the 
limitations  upon  the  general  authority  of  the  agent,  acts  at  his 
peril,  and  cannot  plead  want  of  notice  in  his  behalf,  if  it 
should  appear  that  the  agent  had  exceeded  his  authority.^ 

§  82.   Implied  limitation  of  agent's    authority  to  act  for 

the  benefit  of  principal. —  It  is  implied  in  every  agency, 
in  the  absence  of  express  evidence  to  the  contrary,  that  the 
power  of  the  agent  is  to  be  exercised  for  the  benefit  of  the 
principal,  and  not  for  his  own  private  advantage.  If  an 
agent  is  authorized  to  make  notes,  or  draw  and  accept  bills 
of  exchange,  or  indorse  commercial  paper  generally,  in  the 
name  of  his  principal,  it  is  presumed  that  he  can  only  do 
these  things  in  behalf  of  his  princd.pal's  interests;  and  if 
he  should  apply  these  notes  and  bills  to  his  own  use, 
with  the  knowledge  of  the  payees  and  indorsees, 
the  notes  and  bills  will  be  void,  and  can  not  be  enforced 
against  the    principal.^     Nor  can  an  agent,  having  the  au- 


1  Fenn  v.  Harrison,  3  T.  R.  757;  Miuor  v.  Mechanics'  Bk.  1  Pet.  46, 
70;  Mt.  Oliver  Cemetery  v.  Stiubert,  2  Head.  UG;  York  Co.  Bk.  v.  Stein 
24Md,  447;  Pickering  v.  Busk,  15  East,  38;  Wliitehead  v.  Tucket,  15 
East,  400;  Williams  v.  Gety,  7  Casey  (Pa.)    4G1. 

-'  Alexander  v.  Mackenzie,  6  C.  B.  766;  Attwood  v.  Munniugs,  7  B.  & 
C.  278;  North  River  Bank  v.  Aymar,  3  Hill,  262;  Staiuback  v.  Bk.  of  Va., 
11  Gratt.  259;   Staiuback  v.  Read,  11  Gratt.  281. 

3  Truttell  V.  Brandon,  8  Taunt.    100;  Haynes  v.  Foster,  2  C.  &  M.  237; 
First  Nat.  Bk.  v.  Gray,  63  Mo.  33;  Staiuback  v.  Bk.  of  Va.,  11  Gratt.  269; 
Mechanics'  Bk.  v.  Schaumberg,  38  Mo.  228. 
146 


CH.  v.]  THE    LAW    OF    AGENCY.  §    83 

tliority  to  sign  his  principal's  name  to  commercial  paper, 
exercise  his  power  for  the  accommodation  of  a  third  per- 
son,^ unless  he  is  expressly  authorized  to  do  so,  or  unless  by 
previous  acquiescence  in  such  transactions  the  principal  is 
estopped  from  denying  the  want  of  authority  of  his  agent. ^ 
The  fact,  that  the  paper  was  issued  by  the  agent  without 
authority  for  the  accommodation  of  himself  or  of  a  third 
person,  will  not  avoid  the  paper  in  the  hands  of  a  hona  fide 
holder.^  But  if  an  agent  should  in  his  own  name  draw 
a  bill  on  his  principal,  and  indorse  it  in  his  principal's  name 
"  per  agent,"  it  would  be  notice  to  all  parties,  into  whose 
hands  the  bill  may  come,  that  it  is  accommodation  paper,  and 
therefore  not  binding  upon  the  principal,  unless  expressly 
authorized.^  Agents  are  generally  disabled  from  making 
binding  contracts  with  their  principals,  and  hence  it  has 
been  held  that  a  note  made  by  a  corporation  to  its  trustees 
or  directors  is  against  public  policy  and  void.^  It  is  also 
an  implied  limitation  upon  the  power  to  draw  bills  in  the 
principal's  name,  that  he  can  only  draw  them  against  per- 
sons who  are   in    debt  to,  or  have  funds  of  the  principal.^ 

§  83.  Ratification  of  unauthorized  acts. — Where  one 
assumes  without  authority  to  act  as  the  agent  of  another, 
the  latter  may  ratify  the  act,  and  thus  assume  the  liability 
for  the  transaction.     But  in  order  that  one  may  by  ratifica- 

1  North  River  Bk.  v.  Ayraar,  3  Hill,  262;  Wallace  v.  Branch  Bk.,  1  Ala. 
565:  Nichols  v.  State,  3Yerg.  107. 

'^  Commercial  Bk.  v.  Norton,  1  Hill,  501;  Valentine  v.  Packer,  5  Penu. 
338. 

3  Edwards  v.  Thomas,  66  Mo.  469. 

*  See  Stainback  v.  Bk.  of  Va.,llGratt.  281;  Mechanics' Bk.  v.  Schaum- 
burg,  38  Mo.  228;  First  Nat.  Bk.  v.  Gay  63  Mo.  33;  TreuttelLi?.  Baru- 
adou,   8  Taunt.  100. 

s  Wibur  r.  Lyude,  49  Cal.  290.    See  Chouteau    v.   Allen,    70   Mo.  338. 

«  Stainback  V.  Bk.  of  Va.,  11  Gratt.  281,  Chouteau  v.  Leech,  6  Harris 
(Pa.),  224;  Pope  v  Albion  Bk.,  57  N.  Y.  126;  Wright  i'.  Solomon,  19  Cal. 
64. 

147 


§    {^3  TIIK    LAW    OF    AGENCY.  [CH.   V. 

tion  be  held  liable  for  the  tiausaction  of  an  agent  which  he 
had  not  authorized,  he  must  be  capable  of  ffivins  the 
authority.^  Corporations,  like  natural  persons,  can  ratify 
the  unauthorized  acts  of  its  agents ;  but  the  rules  and  by- 
laws of  the  corporation  nuist  not  in  doing  so  be  violated. ^ 
It  is  further  necessary  that  when  the  alleged  principal 
ratifies  the  act  of  the  alleged  agent,  he  should  know  all  the 
facts  of  the  case  which  are  necessary  to  a  full  comprehension 
of  his  liability.  A  ratification,  made  when  the  principal  was 
ignorant  of  any  material  fact,  will  not  bind  him.^  But  the 
ratification  must  be  complete.  A  principal  cannot  ratify 
the  unauthorized  act  of  his  agent  in  part,  and  reject  the 
rest.  He  must  either  ratify  or  repudiate  the  whole  trans- 
action.* It  is  not  necessary  for  the  ratification  to  be 
formal  or  written.  One  may  ratify  by  his  acts  and  con- 
duct, when  they  are  only  consistent  with  the  presumption 
that  he  approves  what  the  agent  has  done  in  his  name."  Mere 
silence,  unless  accompanied  by  peculiar  circumstances,  will 

1  Bird  V.  Browu,  4  Exch.  786;  Ainsworthw.  Creke,  L.  R.  4  C.  P.  483; 
Paul  V.  Berry,  78  111.  158;  Darst  v.  Gale,  83  111.  137;  Eadie  v.  Ashbaugh, 
44  Iowa,  521. 

2  Supervisors  v.  Schenck,  5  Wall.  782;  Kuox  Co.  v.  Aspimvall,  21  How, 
544;  Trundy  v.  Farrar,  32  Me.  225;  Brady  v.  The  Mayor,  IG  How.  Pr. 
432;  Peterson  v.  Mayor  of  N.  Y.  17  N.  Y.  453;  Hoyt  v.  Thompson,  19  N. 
Y.  218;  Johnson  v.  Stark  Co.,  24  111,  90;  Keithsbury  v.  Prick,  34  111.  421; 
McCracken  v.  San  Francisco,  16  Cal.  591;  Zollmau  v.  San  Francisco,  20 
Cal.  102. 

'  Supervisors  TJ.  Schenck,  5  Wall.  782;  Creswell  v.  Lanahan,  101  U.  S. 
347;  Nixon  v.  Palmer,  4  Seld.  398;  School  District  v.  Thompson,  5  Minn. 
280;  First  National  Bank  v.  Parsons,  19  Minn.  183;  Benedict  i;.  Minor, 
58  111.  19;  Eadie  v.  Ashbaugh,  44  Iowa,  521;  Claflin  v.  Wilson,  51  Iowa, 
15;  Fletcher  u.  Dysart,  9  B.  Mon.  413;  Miller  t?.  Board  of  Education,  44 
Cal.  166. 

■*  Benedict  w.  Smith,  10  Paige  127;  Davenport  Sav.  Fund  Assn.  u.  N. 
A.  Fire  Ins.  Co.,  16  Iowa,  74;  Eadie  v.  Ashbaugh,  44  Iowa,  521;  Hender- 
son V.  Cummings,  44  Cal.  325. 

*  Supervisors  v.   Schenck,   5   Wall.    782;  Knox  Co.  v.  Aspinwall,  21 
How.  544;  Bissel  v.  Jeffersonville,  24  How.  299;   Moran  v.  Miami  Co.,  2 
Blackf.  725. 
148 


CH.  v.]  THE    LAW    OF    AGENCY.  §    84 

not  constitute  a  ratification ;  ^  but  in  any  case  the  appropri- 
ation of  the  proceeds  of  the  transaction  by  the  principal, 
with  a  full  knowledge  of  their  source,  as,  for  example, 
where  the  principal  retains  the  things  purchased  by  an 
agent,  for  which  he  gave  a  promissory  note  in  the  name  of 
the  principal,  will  operate  as  a  binding  ratification. ^ 

§   84.  Liability  of    agent  for  unauthorized  acts.  —  If 

an  agent  always  guarantees  that  he  has  the  authority  to  do 
what  he  undertakes  in  the  name  of  another  i  and  if,  for 
example,  he  should  sign  another's  name  to  a  commercial 
paper  without  authority,  he  is  responsible  to  the  third  per- 
sons .  who  may  be  damaged  by  relying  upon  his  implied 
representations  ;  at  least,  if  the  facts,  by  which  his  author- 
ty  is  to  be  determined,  are  not  equally  within  the  knowl- 
edge of  the  persons  dealing  with  him :  in  such  cases, 
his  guaranty  of  authority  is  absolute,  and  his  own  good 
faith  and  ignorance  will  not  shield  him  from  responsibility.^ 

1  "There  was  no  evidence  of  any  assent  given,  or  any  actual  ratifica- 
tion of  the  attorney  by  the  principals,  but  the  ratification  is  inferred  from 
their  silence.  That  io  too  equivocal  a  circumstance  from  which  to  form 
such  a  conclusion ;  and  the  subsequent  conduct  of  the  defendants  in 
standing  a  suit  sliows  that  they  did  not  understand  their  failure  to  ob- 
ject as  an  actual  ratification."  Hortons  v.  Townes,  6  Leigli,  47.  But  a 
long  silence  may,  under  peculiar  circumstances,  be  held  to  operate  as  a 
ratification.     See  Wardrop  v.  Dunlop,8  N.  Y.  S.  C.  (I  Hun)  325. 

2  Nat.  Bli.  V.  Fassett,  42  Vt.  432;  Ogden  w.  Marchand,  29  La.  61; 
Trustees  of  Schools  v.  McCormack,  41  111.323;  Farrar «.  Peterson,  52 
Iowa,  420. 

^  By  some  of  the  cases,  he  is  held  to  be  liable  in  tort,  Smout  v.  Ilberry, 
10  M.  &  W.  1,  9;  Bartlett  v.  Tucker,  104  Mass.  334;  Draper  v.  Mass., 
etc.,  Co.,  5  Allen,  338;  Abbey  u.  Chase,  6  Cush.  54;  Eastwood  v.  Bain, 
3  H.  &  N.  738;  Lewis  v.  Nicholson,  18  Q.  B.  503;  Shefl3eld  v.  Larue,  16 
Minn.  388;  McHeury  v.  Duffield,  17  Blackf.  41;  Kandali  v.  Trimeu,  18 
C.  B.  78C;  Ballon  v.  Talbot,  16  Mass.  4(il ;  Duncan  r.  Nells,  32  111.  542; 
Johnson  v.  Smith,  21  Conn.  627;  Jefts  v.  York,  4  Cush.  S71;  Teele  v. 
Otis,  66  Me.  329;  Taylor  u.  Shelton,  30  Conn.  122;  Hall  n.  Crandall,  29 
Cal.  572;  Hopkins  v.  Mehaffy,  11  S.  &  R.  129;  Delins  v.  Caw'horu,  2  Dev. 
90;  Brysonw.  Lucas,  84  N.  C.  680;  Kroegcr  ».  Pitcairn,  i:  Out,  (Pa.)  311 

149 


§    85  THE   LAW   OK  a<;i:n(Y.  [cii.  v. 

But  if  the  facts  are  equally  withiu  the  knowledge  of  all 
parties,  and  the  agent  acts  ignorantly  and  in  good  faith,  it 
has  been  held  that  the  agent  is  not  liable  to  third  persons 
for  exceeding  his  authority.^ 

§  85.  Form  of  signature  by  the  agent. —  When  the  agent 
signs  a  note  or  bill  for  his  principal,  he  should  write  the 
name  of  his  principal  and  then  add  his  own  as  agent,  viz.: 
A,  (principal)  by  B.  (agent).  This  is  universally  consid- 
ered as  the  only  truly  correct  form  of  signature.'^  But  it 
is  not  absolutely  necessary  to  the  validity  of  the  instrument, 
as  the  paper  of  the  principal,  that  the  signature  should  he 
in  this  exact  form.  Although  it  was  once  held  to  be  am- 
biguous and  doubtful,^  it  is  now  very  generally  held  that  the 
liability  of  the  principal  will  attach  to  a  paper  which  is 
signed  by  the  agent  "for"  the  principal,  i.e.  B.  (agent) 
for  A.  (principal).  Both  names  are  upon  the  paper,  and  the 
intention  of  the  agent  to  act  only  for  and  in  the  name  of 
his  principal  would  seem  to  be  made  clear  enough  by  such 
a  signature.* 

According  to  many  other  cases,  he  may  be  held  in  an  action  on  the  com- 
mercial paper  or  other  contract,  the  name  of  the  principal  being  treated 
as  surplusage.  Weare  v.  Gove,  44  N.  H.  19G;  Dusenbury  v.  Ellis,  3 
Johns.  Cas.  71;  White  v.  Skinner,  13  Johns.  307;  Rossiter  ».  Rossiter,  8 
Wend.  494;  Palmer  v.  Stephens,  1  Denlo,  480;  Sinclair  i?.  Field,  8  Cow. 
643  (but  see  White  v.  Madison,  2G  N.  Y.  116;  Keener  v.  Harrod,  2  Md. 
63;  Byaisu.  Doore,  20Mo.  284;  Orrasby  d.  Kendall,  2  Ark.  338;  Richie 
V.  Bass,  15  La.  Ann.  668;  Dodd  u.  Bishop,  30 La.  Ann.  1178. 

1  Polhillt;.  Walter,  3  B.  &  Ad.  114,  124;  Jefts  v.  York,  10  Cush.  392; 
Whitney  v.  Wyman,  101  U.  S.  392;  Rathbon  v.  Budlong,  15  Johns.  1; 
Ogden  V.  Raymond,  22  Conn.  379;  Seery  v.  Locks,  29  111.  313;  Ware  v. 
Morgan,  67  Ala.  401. 

2  Bradlee  v.  Boston  Glass  Co.,  16  Pick.  348;  Weaver  v.  CoruTvall,  35 
Ark.  198. 

3  Parsons'  N.  &B.  91. 

*  Longw.  Colburn,  11  Mass.  97;  Dubois  v.  Delaware,  etc..  Canal  Co., 

4  Wend.  285;  Bank  of    Genessee  v.  Patchin  Bk.,  9  N.  Y.  315;  Tillers. 

Spradley,  39   Ga.  35;  Rauey  v.  Winter,  37   Ala.  277;  Elwell  v.  Shaw,  16 

Mass.  42;  Brinley  v.  Mann,  2  Cush.  337;  Mussey  v.  Scott,  7  Cush.  215: 

150 


CH.  v.]  THE    LAW    OF    AGENCY.  §    8> 

Althouo-h  it  is  advisable  for  the  ajjeut  to  affix  his 
name  to  the  signature,  it  is  not  at  all  necessary  to 
the  validity  of  the  instrument.  If  the  agent  has  the  author- 
ity to  sign  his  principal's  name  to  a  note  or  bill,  he 
may  sign  it  without  affixing  his  own  name;  and  if  ques- 
tioned afterward,  it  may  be  shown  by  parol  evidence  who 
signed  the  principal's  uame.^  If  the  agent  should  affix  only 
his  own  name  to  the  commercial  paper  without  his  princi- 
pal's name,  it  will  be  his  own  paper,  and  he  cannot  show 
by  parol  evidence  that  he  intended  to  act  for  his  prin- 
cipal, and  not  for  himself. ^  The  agent  has  been  held  in 
such  cases,  even  though  it  may  be  proved  that  the 
payee  knew  of  the  agency,  for  he  may  have  preferred  to 
rely  upon  the  credit  of  the  agent.  "Parol  evidence  can 
never  be  admitted  to  exonerate  an  agent  who  has  entered 
into  a  written  contract  in  which  he  appears  as  j^rincipal, 
even  though  he  should  propose  to  show,  if  allowed,  that  he 
disclosed  his  agency,  and  mentioned  the  name  of  his  prin- 
cipal at  the  time  the  contract  was  executed."  ^     Certainly 

Jones  V.  Carter,  4  Hen.  &  Munf.  184;  Eckhart  v.  Eeidel,  16  Tex.  62;  Wil- 
buruu.  Larkiu,  3  Blackf.  55;  Hunter  v.  Miller,  6  B.  Mon.  612.  In  Early  v. 
Wilkinson,  9  Gratt.  68,  the  pi'omis.sory  was  signed  "  Robert  H.  Early 
(per  Sam'l  H.  Early),  and  an  attempt  was  made  to  charge  Sam'I  H 
Eti^'ly  as  the  principal.  It  was  held  that  this  was  the  note  of  Robert  ^^. 
Early,  and  that  Samuel  Early  could  not  be  held  liable  on  it. 

1  Neal  V.  Irving,  1  Esp.  61;  Barber  v.  Gingell,  3Esp.  60;  Dav'dson  v^ 
Stanley,  2  Man.  &  G.  721;  Llewellyn  u.  Winchworth.  13  M.  &  W.  598; 
Brigham  v.  Peters,  1  Gray,  139;  Morse  v.  Green,  13  N.  H.  ?2;  Woodbury 
'<).  Moulton,  47  N.  H.  11;  Haven  v.  Hobbs,  1  Vt.  238;  Odd  Fellows  «. 
First  Nat.  Bk.,  42  Mich.  463;  Cravens  v.  Gilliland,  63  Mo.  28;  First  Nat. 
Bk.v.  Gay,  63  Mo.  33;  Mechanic's  Bk.  v.  Bank  of  Columbia,  5  Wheat.  326. 

-  Arnold  v.  Stackpole,  11  Mass.  27;  Bedford,  etc.,  Ins.  Co.  v.  Covell, 
8  Met.  442;  Lyons  v.  Mitler,  6  Gratt.  440;  Poole  u.  Rice,  9  W.  Va., 
73. 

3  Nashu.  Towne,  5  Wall.  689.     See  to  the  samee'ffect,  Magee  v.  Atkin 
son,  2  M.  &  W.  440;  Hyde  v.  Paige,  9  Barb.  151;  Pentz   v.  Stanton,    10 
Wend.  271;  Paige  v.  Stone,  10   Met.  169;   Hypes*  v.    Griffln,  89  111.    134. 
See  contra,  Moore  v.    McClure,  15  N.  Y.  S.   C.  (S  Hun)    558,  Talcott  J.: 

151 


§    ^'>  THK    LAW    Ol"    ACENCY.  [CH.  V. 

the  afjcnt  is  liublo  on  all  such  iioti-s  and  })ills,  after  they 
have  been  indorsed  to  persons,  ignorant  of  the  agency. 

It  has  also  been  held  that  the  agent  is  bound  on  a  note  or 
bill,  to  which  he  fails  to  affix  the  name  of  the  principal,  even 
though  he  adds  the  word  "  agent  "  to  his  signature.  Such 
a  suffix  is  deemed  to  be  a  mere  descriptio persom.e,  and  does 
not  constitute  any  notice  of  the  agency  to  the  holder  or 
indorsee.^ 

This  rule,  that  the  agent  is  himself  liable  on  com- 
mercial paper,  unless  he  signs  his  principal's  name, 
not  only  applies  to  the  original  execution  of  the  paper,  but 
also  to  the  indorsement.  If  a  note  or  bill  is  payable  to  a 
person,  by  name,  without  disclosing  on  the  face  of  the 
paper  that  he  is  made  payee  in  the  capacity  of  an  agent  for 
another,  whose  name  is  given;  any  indorsement  by  the 
payee  named  will  be  his  individual  indorsement,  and  he  will 
be  personally  liable  thereon,  although  he  affixed  the  word 
"  asrent"  to  his  sio^nature.''* 

But  it  is  not  always  necessary  that  the  principal's 
peculiar  name   be  used   by  the  agent  in  the    execution  of 

"  The  fact  that  the  name  of  the  principal  does  uot  appeal*  on  the  face  of 
note  is  uot,  under  the  modern  decisions  in  this  State,  at  all  conclusive. 
^  H  was  intended  to  be  given  in  the  business  of  the  principal,  was  in 
the  ct  so  given,  and  with  due  authority,  it  is  binding  on  the  principal, 
and  all  Ihis  is  matter  of  evidence,  all  covered  by  the  averment  that  it  is 
the  note  of  the  principal." 

1  Wi'liams  v.  Robbius,  16  Gray,  77;  Hall  v.  Bradbury,  40  Conn.  32; 
Arnold  v.  Sprague,  34  ¥1.409;  Collins  v.  Buckeye  State  Ins.  Co.,  17 
Ohio  St.  215;  Anderson  v.  Shoup,  1  Ohio  St.  125;  Graham  v.  Campbell, 
50  Ga.  258;  Toledo  Iron  Works  v.  Heisser,  51  Mo.  i28;  Bryson  v.  L'jcas, 
84  N.  C.  280;  Kenyon  v.  Williams,  19  Ind.  45;  Anderson  v.  Pearce,  36 
Ark.  393. 

-  Bishop  V.  Rowe,  71  Me.  263;  Toledo  Iron  Works  v.  Heisser,  51  Mo. 
128;  Haight  v.  Naylor,  5  Daly,  219.  But  it  has  been  held  in  New  York, 
that  an  indorsement  by  the  payee  named  with  the  word  "  agent  "  added 
indicated  his  intention  to  transfer  tlie  paper  Avithoiit  recourse.  Mott  v. 
Hicks,  1  Cow.  533;  Ilicks  r.  Ilindc,  9  Barb.  531;  Babcock  v.  Bemau,  1 
Kern.  200.     See  Hager  v.  Rice,  4  Col.  90. 

152 


CH.   v.]  THE    LA^\'    OF    AGENCY.  §    8G 

commercial  paper,  in  order  to  bind  the  principal. 
The  principal  may  authorize  the  agent  to  employ  some 
other  name  in  the  place  of  his  regular  name,  even  the 
name  of  the  agent.  In  all  such  cases  the  adopted  name  is 
in  law  held  to  be  the  equivalent  of  the  real  name  of  the 
person,  and  the  adoption  of  a  different  name  may  always  be 
established  by  parol  evidence.^ 

§  86.  Exceptions  to  the  liability  of  agent. — But  there 
are  some  exceptions  to  the  liability  of  the  agent,  in  cases 
where  he  signs  his  own  name  to  a  commercial  paper,  and  fails 
to  disclose  his  agency  by  adding  the  name  of  his  principal ; 
Thus,  where  an  agent  draws  on  a  debtor  in  favor  of  his 
principal :  following  the  express  or  implied  authority  of  the 
principal,  he  will  not  be  liable  as  drawer  to  the  principal; 
for  as  against  the  drawer,  this  draft  is  equivalent  to  a  draft 
drawn  by  the  principal  in  favor  of  himself .^  The  con- 
trary has  been  held  by  the  English  courts,^  but  it  is  impos- 
sible to  discover  any  satisfactory  reason  for  holding  the  agent 

1  Brown  V.  Parker,  7  Alien,  337.  See  Minor  v.  Mechanics'  Bk.,  1 
Pet.  4(J;  Bartlett  v.  Tucker,  lOi  Mass.  338;  Bank  of  Rochester  v.  Min- 
tent,  1  Den.  405.  See,  also,  post,  chapter  on  Private  Corporations,  on 
the  use  of  different  names  by  a  corporation. 

-  Roberts  v.  Austin,  5  Whart.  313;  Mechanics'  Bk.  v.  Earp,  4  Rawle, 
390;  Jones  v.  Lathrop,  44  Ga.  398. 

3  Le  Pevre  v.  Lloyd,  5  Taunt.  749.  See  Ex  parte  Robinson,  1  Buck.  113; 
Kedson  v.  Dilworth,  5  Price,  564.  "These  decisions,  subjecting  au 
agent  to  personal  liability  as  regards  third  persons  ignorant  of  the  cir- 
cumstances under  which  the  agent  became  a  party,  are  consistent  with 
the  other  principles  of  law  applicable  to  these  instruments.  But  it  seems 
questionable  whether  even  at  law  it  is  correct  to  allow  an  employer  to 
recover  from  his  agent  under  such  circumstances,  because  in  general, 
between  original  parties,  it  may  be  shown  as  a  good  defense  at  law  that 
the  bill  was  drawn,  accepted  or  indorsed  for  the  plaintifE  's  accommoda- 
tion, or  for  a  purpose  or  consideration  which  has  failed  or  been  satisfied ; 
and  to  allow  such  a  principal  to  recover  at  law  against  his  agent,  is  only 
to  compel  the  latter  to  resort  to  a  court  of  equity  for  relief,  which  might 
just  as  well  be  afforded  at  law,  and  a  court  of  equity  will  cei'tainly  afford 
relief."     Chitty  on  Bills  (9th  ed.) ,  34. 

153 


§    8<»  THK    LAW    OF    AfiKXCY.  [(  H.   V. 

liahle  ill  any  ordiiiaiy  iigeiicy.  lUit  if  tiio  agent  is  a  factor 
Avith  a  del  credere  cominis.sion,  and  the  agent  draws  on  the 
purchaser  in  favor  of  the  principal,  he  may  well  be  hold 
liable  as  drawer,  for  under  his  commission  he  guarantees 
the  })ayments  by  his  purchasers.  The  case  just  mentioned 
is  very  similar  to  that  of  an  indorsement  by  an  agent  to  his 
principal.  Where  a  bill  is  made  ])ayable  to  an  agent,  while 
he  is  transacting  the  business  of  his  principal,  it  is  in  effect 
made  payable  to  the  principal,  and  he  may  sue  upon  it 
without  indorsement  to  him.^  The  agent,  therefore,  at 
least  in  the  case  of  ordinary  agencies,  in  indorsing  the  paper 
to  the  principal,  acts  in  a  representative  capacity,  and  does 
a  formal  act  not  essential  to  invest  in  the  principal  the 
right  of  property  in  the  paper.  Although  it  is  held  differ- 
ently in  England,'^  it  is  generally  held  that  the  agent  is  not 
liable  as  indorser  on  such  indorsements  to  his  principal.^ 
It  is  probably  diiferent  where  the  agent  is  a  factor  under  a 
del  credere  commission,  and  the  bill  is  drawn  by  the  pur- 
chaser of  commission  goods  in  favor  of  the  factor.  It  has 
been  held  that  the  agent  is  not  liable  as  indorsers  notwith- 
standing he  is  selling  goods  under  a  del  credere  commission,* 
but  the  better  opinion  is  that  such  an  Jigent  is  liable  as  in- 
dorser, since  under  his  del  credere  commission  he  is  liable 
as  a  guarantor,  and  it  is  therefore  not  a  hardship  to  hold 
him  liable  on  his  indorsement.^ 

There  is  a  third  case  in  which  the  agent  is  not 
usually    held    liable    as    a    party    to    commercial    paper, 

1  Nave  V.  Hadley,  74  lud.  155. 

2  Goupy  t\  Warden,  7  Taunt.  159. 

3  Warwick  v.  Noukes,  Peake's  N.  P.  G8;  Kimball  v.  Bittner,  02  Pa.  St. 
205;  Lewis  v.  Brehrae,  33  Md.  431. 

*  Sharp  r.  Emraett,  5  Whart.  290;  Byers  v.  Harris,  9  Ileisk.  652. 

s  McKeuzie  v.  Scott,  G  Bro.  P.  C.  280;  Ceutourier  v.  liastie,  8  Exch. 
39;  Lewis  v.  Brehrae,  33  Md.  312;  Wolf  v.  Koppel,  5  Hill,  558;  s.  c.  2 
Denio,  3<!8;  Sherwood  v.  Stone,  U  X.  Y.  2(17;  Swan  v.  J^esmith,  7  Pick. 
220;  Wickliam  v.  Wickhain,  2  Kay  &  Johns.  475. 

154 


CH.   v.]  THE    LAW    OF    AGENCY.  §    >>iy 

and  that  is  where  he  draws  against  his"  principal  in 
favor  of  a  creditor  of  the  principal.  It  is  held  by 
some  of  the  courts  and  authorities  that  the  agent  in  such  a 
case  is  liable  to  the  payee  as  drawer,  although  the  payee 
knows  of  the  agency.^  But  the  better  opinion  would  seem 
to  be  that  the  representative  character  of  the  agent's  act 
in  drawing  on  his  principal  may  be  taken  into  consideration, 
and  he  be  absolved  from  all  personal  liability  as  drawer  to 
the  original  payee. ^  But  it  must  be  observed  that  these 
exceptional  cases  do  not  include  the  liability  of  the  ►agent 
to  subsequent  indorsees.  As  soon  as  the  bill  has  passed 
into  the  hands  of  an  indorsee  for  value,  and  without  notice 

1  Leadbetter  v.  Farrow,  5  M.  &  S.  345.  See,  also,  to  the  same  effect 
Story  on  Agency,  §  269;  1  Am.  Lead.  Cas.  *63o.  "The  agency  under 
which  he  acted  is*  a  matter  between  him  and  his  employer,  but  cannot 
protect  him  from  the  claim  of  the  payees  of  the  bill,  who  have  a  right  to 
consider  liim  as  an  independent  drawer,  notwithstanding  tliey  may  have 
known,  eitlier  fi'om  the  terms  of  the  bills  tliemselves  or  from  extraneous 
evidence,  that  the  defendant  was  acting  as  servant  to  one  of  the  liouses  on 
which  the  bill  was  drawn."  Parker,  J.,  in  Mayhew  v.  Prince,  11  Mass. 
55.     See  also  Newhall  r.  Duulop,  U  Me.  180. 

2  In  Krumbaar  v.  Ludeling,  3  Mart.  O.  S.  (*G40)  700,  Mathews,  J., 
said:  '-The  attempt  of  Ludeling  to  show  that  he  merely  acted  as  the 
agent  for  the  Amelungs  in  drawing  the  bill  on  whicli  this  suit  is  com- 
menced, can  be  considered  propei'ly  in  no  otlier  light  than  an  offer  of 
evidence  to  show  a  want  of  consideration  in  tlie  written  agreement,  and 
that,  for  this  reason,  lie  is  not  bound  to  fulfill  any  obligation  which 
might  otherwise  have  resulted  from  it.  There  is  no  doubt  of  the  i^er- 
soi:al  liability  of  the  drawer  of  a  bill  of  exchange,  who  signs  it  without 
expressing  his  agency,  when  it  passes  into  tlie  hands  of  third  persons 
liaving  no  knowledge  of  the  circumstances  under  which  it  was  drawn, 
and  between  whom  and  the  drawer  the  law  will  not  allow  the  considera- 
tion to  be  inquired  into.  The  appellee  having  signed,  without  ex- 
pressing for  whom  he  signed,  is  clearly  liable  on  the  face  of  it;  but  lie 
is  at  liberty  to  show  a  want  of  consideration,  and  any  circumstances  of 
fraud  or  violation  of  good  faith  on  the  part  of  the  appellant,  which  may 
be  sufficient  to  exonerate  him  from  this  apparent  lial)ility,  the  suit 
against  him  being  brouglit  by  a  person  '  with  whom  he  was  immediately 
concerned  in  tlie  negotiation  of  tlie  instrument.'  "  See,  to  same  effect, 
Wolfe  V.  Jcwett,  10  La.  O.  S.  614;  Lincoln  v.  Smith,  11  La  O.  S.  11;. 
Hicks  V.  Hind,  9  Barb.  o26. 

155 


§   87  Tin:  law  of  aciencv.  [ch.  v. 

of  the   agency,  the  agent  is  lia})le  personally  in  whatever 
character  his  name  appears  upon  the  instrument. 

§  87.  I-iiability  of  principal  on  commercial  paper  exe- 
cuted in  the  ajjent's  nainc. —  It  is  a  general,  and  probably 
an  invarial)le,  rule  of  the  law  of  commercial  paper,  that  no 
one  can  be  held  liable  on  a  bill  of  exchange  or  promissory 
note,  whose  name  does  not  appear  in  some  way  on  the 
paper;  and  in  the  application  of  this  rule  to  the  instru- 
ments executed  by  an  agent,  it  is  generally  held  that  the 
real  principal  cannot  be  charged  in  suits  upon  negotiable 
instruments,  unJess  his  name  is  disclosed  in  some  part  of 
the  instruments.^  This  rule  is  only  a  special  application  of 
the  more  general  rule  that  every  part  of  commercial  paper 
must  be  definite  and  certain,  and  contained  in  the  body  of 
the  instrument.  The  recognition  of  the  liability  on  the 
in>^trument  of  one,  whose  name  does  not  appear  upon  it, 
would  be  the  introduction  of  an  important  element  not  to 
be  found  in  the  instrument  itself.  But  a  disposition  has  of 
late  been  manifested  by  the  courts. to  so  far  relax  the  rule, 
that  when  the  paper  is  signed  by  one  as  "  agent,"  Avithout 
disclosing  the  name  of  the  jirincipal,  the  principal  may  be 
proved  by  parol  evidence  and  sued  on  the  instrument.  This 
is  particularly  true  of  indorsements  by  agents,  with  the 
word  "agent"  added  to  their  signatures.'^     This  rule  is, 

1  Arnold  v.  Stackpole,  11  Mass.  27;  Slawson  v.  Loring,  5  Allen,  340; 
Brown  r.  Baker,  7  Allen,  339;  Bass  r.  O'Brien,  12  Gray,  477;  Williams  r;. 
Bobbins,  16  Gray,  77;  Arnold  v.  Sprague,  34  A^'t.  409:  Pease  v.  Pease,  35 
Conn.  131;  Pentz  v.  Stanton,  10  Wend.  271;  Hyde  ©.Page,  9  Barb.  150;  Ken- 
yon  i'.  Williams,  19  Ind.  45;  Thurston  v.  Munn,  1  Greene  (Iowa),  231; 
Heaton  v.  Myers,  4  Col.  62;  De  Witt  v.  Walton,  5  Seld.  (X.  Y.)  571.  Se6 
Higginst;.  Senior,  8  M.  &  W.  834;  Kenworth  v.  Schofleld,  2  B.  &  C.  945; 
Dykers  v.  Townsend,  25  N.  Y.  57;  Williams  v.  Bacon,  2  Gray,  387. 

^  "  It  is  difficult  to  reconcile  the  cases  so  as  to  ascertain  with  cer- 
tainty when  a  principal  is  Ijound  by  a  -nTiting  executed  by  one  who  signs 
the  same  as  agent.  But  it  seems  to  be  i>retty  well  settled,  that  when  the 
person  signing  his  name  with  the  word  '  agent '  added,  is  in  fact  the 
15(5 


TH.   v.]  THE    LAW    OF    AGENCY.  §    87 

however,  peculiar  to  the  law  of  commercial  paper,  applic- 
able only  to  negotiable  instrumeuts.  In  respect  to  all 
other  contracts,  the  rule  of  liability  is  quite  different. 
"Whenever  an  agent  signs  a  written  contract  of  an}^  kind  in 
his  own  name,  he  is  personally  liable  on  the  contract,  even 
though  his  agency  is  disclcsed  or  known. ^  The  agent  is 
also  liable  on  all  lawful  oral  contracts  executed  by  him, 
where  he  fails  to  disclose  the  name  of  his  principal. ^ 

agent  of  the  principal,  and  the  -writing  is  executed  in  the  course  of  tlie 
business  of  such  agency,  tlie  principal  is  bound  by  a  contract  signed 
with  the  agent's  name  with  the  word  'agent'  added.  This  case  is  at 
war  with  the  ruling  in  De  Witt  i\  Walton,  5  Seld.  571.  But  that  case  has 
not  been  followed,  if  it  is  to  be  understood  as  deciding  that  the  princi- 
pal is  not  bound  in  any  case  by  a  writing  signed  by  the  agent  in  his  own 
name  with  the  word  '  agent'  added."  Green'v.  Skeel,  9  N.  Y.  S.  C.  (2 
Hun)  4:80.  In  this  case,  suit  was  by  indorsee  against  the  principal  of  an 
iudorser  who  signed  his  own  name  with  the  word  "  agent"  added.  To 
the  same  effect,  is  Merchants'  Bk.  v.  Central  Bk.,  1  Kelley  (Ga.),  429. 
See  contra,  Haight  v.  Naylor,  5  Daly,  219.  In  May  v.  Hewitt,  33  Ala.  161, 
a  bill  was  drawn  by  owners  of  a  steamboat,  and  accepted  by  "  B.  Bell, 
captain,"  and  it  was  held  to  be  admissible  to  show  by  parol  evidence 
who  was  bound  as  principal  by  the  acceptance. 

1  Sayre  v.  Nichols,  5  Cal.  487;  Tildeuu.  Barnard,  43  Mich.  376;  Hall 
V.  Cockerill,  28  Ala.  507;  Nixon  v.  Downey,  49  Iowa,  166;  Andrews  v. 
Allen,  4  Harr.  (Del.)  452;  McWilliams  r.  Willis,  1  Wash.  (Va.)  199; 
Bickford  v.  First  Nat.  Bk.,  42  111.  288;  Steele  v.  McElroy,  1  Sneed 
(Tenn.),  341;  Dening  ».  Bullitt,  1  Blackf.  241;  Wiley  v.  Shank,  4  Blackf. 
420;  Crum  u.  Boyd,  9  Ind.  289;  Allen  w.  Pegram,  16  Iowa,  163;  Scott  w. 
Messick,  4  T.  B.  Mon.  535;  McBean  v.  Morrison,  1  A.  K.  Marsh.  545; 
Hodges  V.  Green,  28  Vt.  358;  Nugent  v.  Hickey,  2  La.  Ann.  358;  Fash  v. 
Ross,  2  Hill  (S.  C),  294;  Thacher  v.  Dinsmore,  5  Mass.  299;  Foster  v. 
Fuller,  6  Mass.  58;  Hastings  v.  Lovering,  2  Pick.  214;  Whiting  v. 
Dewey,  15  Pick.  428;  Seaver  v.  Coburn,  10  Cush.  324;  Collins  v.  Buck- 
eye Ins.  Co.,  17  Ohio  St.  215;  Bass  v.  Randall,  1  Minn.  404;  Bingliam  v. 
Stewart,  13  Minn,  106;  Pratt  v.  Beaupre,  13  Minn.  187;  Bank  of  Roches- 
ter V.  Monteith,  1  Denio,  402 ;  Stone  v.  Wood,  7  Cow.  453 ;  Chouteau  v. 
Paul,  3  Mo.  260. 

2  Irvine  v.  Watson,  5  Q.  B.  D.  102;  Meyer  v.  Barker,  6  Binn.  228; 
Merrill  v.  Wilson,  6  Ind.  426;  Merrill  v.  Keuyon,  48  Conn.  314;  Pierce  v. 
Johnson,  34  Conn.  274;  Davenport  w.  Riley,  2  McCord,  198;  Mitiioff  v. 
Byrne,  20  La.  Ann.  303;  Royce  v.  Allen,  28  Vt.  234;  Bultoii  i\  Winslow, 
53  Vt.  430;  Conyers  v.  Magrath,  4  McCord,  392;  McComb   v.  Wright,  4 

157 


§     i^T  TIIK    LAW     OF    AGKNCY.  [cil.   V. 

It  is  liold  in  Knirland,  iind  was  also  once  held  in  this  country 
that  the  agent  of  a  foreign  princii)al  is  always  bound,  be- 
cause the  princii)al  is  inaccessibb' ;  '  l)ut  no  distinction  is 
ordinaril}'  recognized  now  between  the  two  classes  of 
ai'cncios.- 

While  the  agent  in  all  such  contracts  may  be  held 
bound;  yet  if  the  other  party  chooses  to  cast  the 
liability  upon  the  undisclosed  principal,  he  may  do  so. 
But  he  nnist  elect  which  of  the  two  he  will  hold  liable,  as 
soon  as  ho  learns  who  the  principal  is.  If  the  third  person 
knew  at  the  time,  when  the  contract  was  made,  M'ho  the 
principal  was,  and  takes  the  contract  in  the  name  of  the 
agent,  he  cannot  hold  the  principal  liable,  it  being  pre- 
sumed from  the  facts  and  the  form  of  the  contract  that  he 
had  elected  to  hold  the  agent  liable.^  But  if  the  name 
of  the  principal  was  not  disclosed,  whether  the  agency  was 
known  or  not,  the  other  party  can  hold  either  the  princi})al 
or  agent  liable,  making  the  election  when  he  learns  the 
name  of  the    principal.^ 

-  It  would  seem  that,  while  the  principal  could  not 
be  held  liable  in  a  suit  on  a  promissory  note  or  bill  of 
exchange,  in  which  his  name  does  not  appear,  yet  he 
might  be    held    liable    in   an   independent    action   on   the 

Johns.  Ch.  G59;  Wheeler  v.  Reed,  36  111.  81;  McClellau  v.  Parker,  27  Mo. 
1G2;   Forney  y.  Shipp,  4  Joues  N.  C.  527. 

1  Armstrong  v.  Stokes,  L.  11-  7  Q.  B".  598;  Elbiuger  Actieu-Gerell- 
schaft  V.  Claye,  L.  K.  8  Q.  B.  313;   Story  on  Agency,  § 

2  At  least,  the  foreign  principal  will  be  bound,  if  such  appears  to 
have  been  the  intention  of  the  parties.  Rogers  u.  March,  33  Me.  106; 
Bray  v.  Kettell,  1  Allen,  80. 

•'*  Paterson  v.  jandasequi,  1.5  Kast,  02;  Silver  v.  Jordan,  13()  Mass. 
319;  Coxe  v.  Devine,  5  llarr.  (Del.)  375. 

*  Thompson  v.  Davenport,  9  B.  &  C.  78;  s.  c.  2  Smith  Load.  Cas.  212; 
Brlggs  V.  Partridge,  Gi  N.  Y.  357;  Jessup  v.  Steurer,  75  N.  Y.  G13;  Ray- 
mond V.  Crown  &  Eagle  Mills,  2  Met.  319;  French  v.  Price,  24  Pick.  13; 
JIubbert  r.  Borden,  G  Whirt.  79:  Youghioghyiiy  Iron,  etc.,  Co.  v.  Smitli. 
IG  Smith  (Pa.),  340;  Violett  r.  Powell,  10  B.  Mou.  347. 
158 


CH.  v.]  THE    LAW    OF    AGENCY.  §    89 

original  consideration,  by  the  original  party  to  the  transac- 
tion,  without    violating    any   rule   of     commercial  paper. 

§  88.  Action  by  principal  on  commercial  paper  made 
payable  to  his  agent.  — Where  a  bill  or  note  is  made  pay- 
able to  an  agent  by  name,  it  is  easy  enough,  during  the  life 
of  the  agent,  for  the  principal  to  secure  the  right  of  action 
on  the  paper  in  his  own  name  by  an  indorsement  of  the 
paper  to  him  by  the  agent.  But  if  the  agent  is  dead,  or  re- 
fuses to  make  the  indorsement,  it  would  be  embarrassing, 
if  he  could  not  sue  independently  of  the  indorsement.  The 
right  of  the  principal  to  maintain  an  action  on  a  contract, 
made  for  him  by  an  agent  in  the  hitter's  name,  is  generally 
recognized  by  .the  courts,  so  far  as  ordinary  contracts  are 
concerned.^  There  does  not  seem  to  be  any  objection  to 
the  application  of  this  rule  to  the  law  of  commercial  paper, 
provided  it  is  not  allowed  to  affect  the  validity  of  the 
agent's  indorsement  to  third  persons  for  value.  So  it  has 
been  held,  that  the  undisclosed  principal  may  sue  on  a 
promissory  note  payable  to  his  agent. ^ 

§  89.   The  agent  cannot  delegate  his  authority. —r  It  is 

a  general  rule  of  the  law  of  agency,  that  the  agent  cannot 
delegate  his  authority  unless  he  is  authorized  to  do  so. 
But  this  prohibition  of  the  employment  of  a  subagent  only 
refers  to  the  transactions  which  require  the  exercise  of  a 
personal  discretion  and  judgment.  When  an  agent  is  ap- 
pointed, the  principal  is  presumed  to  rely  upon  the  discre- 

1  X.  J.  steam  Nav.  Co.  r.  Merchants'  Bk.,  6  How.  34-t,  381 ;  Ford  v. 
Williams,  21  How.  287;  Baltimore  Coal  Tar  etc.,  Co.  v.  Fletcher,  61  Md. 
288:  Huntiugtou  ?).  Knox,  7  Cash.  371;  Eastern  Railways.  Benedict,  5 
Gray,  5(31 ;  Barry  17,  Page,  10  Gray,  398;  Gilpin  c.  Howell,  .5  Barr,  41; 
Machias  Hotel  v.  Coyle,  35  Me.  405;  Elkius  v.  Boston,  etc.,  R.  R.  Co.,  19 
N.  H.  337;  Woodruff  v.  McGhee,  30,  158;  Brooks  v.  Mintun,  1  Cal.  481; 
Ruiz  r.  Norton,  4  Cal.  355;  Ames  v.  St.  Paul,  etc.,  R.  R.  Co.,  12  Minn. 
412;  Oelrichs  r.  Ford,  21  Md.  480. 

-  Navey.  Hadley,  74  lud.  155. 

159 


§   89  THE  LAW  OF  a(;k\cy.  [cii.  v. 

tion  and  jadf^ment  of  the  particular  person  he  appoints; 
and  unless  this  person  is  authorized  expressly  or  by  neces- 
sary implication  ^  to  delegate  his  authority,  he  must  himself 
transact  that  part  of  the  business  which  involves  the  exer- 
cise of  an  independent   judgment. ^ 

But-  merely  ministerial  acti3,  which  do  not  involve 
the  exercise  of  discretion,  may  be  performed  by  a 
subagent,  without  any  power  to  delegate  authority:  and 
under  this  rule  it  has  been  held  lawful  for  an  agent 
to  direct  a  subagent  to  sign  a  paper  for  the  principal,  after 
the  agent  has  himself  determined  the  propriety  of  the 
transaction.^  Applying  this  rule  to  the  law  of  commercial 
paper,  it  was  held  that,  where  an  agent  was  authorized  to 
borrow  money  for  the  principal,  and  execute  a  note  in  his 
name,  a  note  executed  by  a  third  person  in  the  name  of  the 
principal  and  b}'' the  direction  of  the  agent,  who  had  him- 
self borrowed  the  money  for  which  the  note  was  to  be 
given,  was  binding  upon  the  principal.  The  mere  signing 
was  a  ministerial  act  not  involving  the  exercise  of  any  judg- 
ment or  discretion.* 

1  The  agent's  power  lo  delegate  his  authority  raay  De  implied  from 
the  fact  that  the  nature  of  the  business  requires  it.  as,  for  example  in 
the  collection  of  commercial  paper,  the  parties  to  which  reside  in  differ- 
ent places.  See  Dorchester,  etc..  Bank  v.  New  England  Bank,  1  Cush. 
177;  Planters',  etc.,  Nat.  Bk.  v.  First  Nat.  Bk.  75  X.  C.  534;  Krumm  v. 
Jefferson  Fire  Ins.  Co.,  40  Ohio  St.  225. 

2  Coles  V.  Trecothick,  9  Ves.  274;  Brewster  v.  Hobart,  15  Pick.  302; 
Emerson  v.  Providence  Hat  Manuf.  Co.,  12  Mass.  237;  Warner  r.  Martin, 
11  How.  (U.  S.)  300;  Shauklinw.  Corp.  of  Washington,  5  Pet.  305;  Hunt 
V.  Douglas,  22  Vt.  128;  Paul  v.  Edwards,  1  Mo.  30;  Grady  v.  Am.  Cent. 
Ins.  Co.,  GO  Mo.  IIG;  Bocock  v.  Pavey,  8  Ohio  St.  270:  Yates  v.  Freckle- 
ton,  2  Dol^gl.  623 ;  Loomis  V.  Simpson,  13  Iowa,  532;  Reuwick  r.  Ban- 
croft, 56  Iowa,  527. 

3  Lord  V.  Hall,  8  C.  B.  627;  Commercial  Bk.  v.  Norton,  1  Hill,  501 ; 
Grinnell  ».  Buchanan,  1  Daly,  538;  Norwich  University  v.  Denny,  47  Vt. 
13;  Newell  v.  Smith,  49  Vt.  255;  Ex  parte  Sutton,  2  Cox,  84;  Eldridge  r. 
Holway,  18  111.  445;   Grady  v.  Am.  Cent.  Ins.  Co.,  60  Mo.  116. 

*  Weaver  v.  Caruall,  35  Ark.   108;  Ellis  v.  Francis,  9  Ga.  327. 
160 


CHAPTER     YI. 

PARTNERS  AS  PARTIES  TO  COMMERCIAL  PAPER. 

8BCTION    94.  General  propositious. 

95.  General  authority  of  the  partner. 

96.  Trading  paiinerships. 

97.  Other  than  trade  pai-tnerships. 

98.  Accommodation  paper,  liability  of  partners  on. 

99.  Accommodation  paper  in  the  hands  of  bona  fide  indorsees. 

100.  Special  limitations  upon  the  authority  of  partners. 

101.  Ratification  of  an  authorized  issue  of  commercial  paper. 

102.  Joint  and  several  notes  executed  by  a  partner. 

103.  Form  of  the  firm's  signature. 

104.  Firm  doing  business  in  partner's  name. 

105.  Signature  of  firm  in  acceptances. 

106.  Effect  of  dissolution  of  partnership  —  "What  notice  re- 

quired. 

107.  What  powers  implied  in  the  authority  to   close  up  the 

business. 

108.  Indorsement  of  the  firm's  bills  and  notes  receivable  after 

dissolution. 

109.  Bills  and  notes    executed    before  and  issued  after  dis- 

solution. 

110.  Power  of  ex -partners  in  respect  to  paper  banned  by  the 

statute  of  limitations. 

§  94.  General  Propositions.  —  Partners  are  personally 
liable  in  soUdo  for  all  the  obligations  of  the  partnership, 
which  any  member  of  the  firm,  who  is  authorized  to  repre- 
sent itj  has  in  its  name  assumed.  Partners  are  of  several 
kinds,  viz.  :  I.  Actual  and  nominal  or  ostensible.  II.  Secret 
or  dormant.  III.  General  or  special.  But  all  of  them  are, 
without  exception,  liable  for  the  debts  of  the  partnership, 
to  the  extent  that  they  are  members  of  the  partnership.^ 

1  Wintle  V.  Crovvthey,  1  Tyrw.  215  (I  Cromp.  &  J.  310);  DeMantort 
17.  Saunders,  1   Bam.  &  Ad,  398;  1  Parsons'  N.  &  B.  142,  143;  Davis  v. 

11  161 


§    (t5  PARTNERS    AS    PARTIES.  [Cll.  VI. 

But  the  special  partner  is  one  who,  under  the  statutes  of  the 
different  States,  is  permitted  to  enter  into  the  partnership 
with  a  liability  limited  to  the  amount  of  cash  capital  he 
puts  into  the  business.  The  creditors  have  no  personal 
claim  against  the  special  partner.^ 

§  95.  General  authority  of  the  partner. — All  the  part- 
ners, except  the  secret  or  dormant  partners,  have  the  im- 
plied authority  to  bind  the  firm  by  contracts  pertaining  to 
the  business  of  the  firm.  This  authority  is  implied  from 
the  very  nature  and  object  of  a  partnership.  A  partner- 
ship is  formed  for  the  purpose  of  jointly  transacting  a 
business,  which  cannot  be  well  attended  to  by  one  alone. 
Hence  it  could  not  be  expected  that  each  partner  would 
pass  upon  and  assent  to  the  issue  of  every  bill  or  note,  that 
may  be  needed  in  conducting  the  business  of  the  firm.^ 

Allen,  3  N.  Y.  172.  But  a  secret  or  dormant  partner  is  not  liable  on  a 
note  or  bill  issued  by  the  firm  after  his  withdrawal,  although  there  has 
been  no  notification  of  his  withdrawal,  since  credit  could  not  have  been 
given  to  the  firm  in  reliance  upon  a  secret  partner.  Davis  v.  Allen,  3 
N.  Y.  168;  Magill  v.  Merrie,  5  B.  Mon.  108;  Scott  v.  Cosminil,  7  J.  J. 
Marsh,  416;  Vacarro.  v.  Toof,  9  Heisk.  194. 

1  1  Daniel's  Negot.  Inst.  §  352a. 

2  "  By  the  general  rule  of  law  relating  to  partnerships  in  trade,  each 
member  of  it  is  liableforthe  debts  and  engagements  of  the  whole  com- 
pany contracted  in  the  course  of  the  trade.  This  is  a  consequence  not 
confined  to  the  law  of  this  country,  but  extending  generally  throughout 
Europe.  And  it  is  founded,  partly  on  the  desire  to  favor  commerce,  that 
merchants  in  partnership  may  obtain  more  credit  in  the  world;  and 
more  especially  on  the  principle  that  the  members  of  trading  partner- 
ships are  constituted  agents,  the  one  for  the  other,  for  entering  into  con- 
tracts connected  Avith  the  business  and  concerns  of  the  partnership,  so 
that  by  the  contracts  of  the  agent  all  his  principals  are  bound.  But  to 
subject  a  person  to  responsibility  as  a  partner,  for  the  acts  of  another 
done  without  his  express  concurrence,  he  must  stand  in  one  or  other  of 
these  two  situations :  first,  he  must  at  the  time  of  making  the  contract, 
whether  bill,  note,  or  other  instrument,  have  been  actually  a  j^artuer  in 
the  joint  concern;  or,  secondly,  admitting  tliat  he  was  not,  he  must  have 
represented  or  permitted  himself  to  be  represented  as  such,  before  or  at 
the  time  of  making  the  contract,  either  generally  to  all  the  world,  or  to 

162 


CH.  VI.]  TARTIES    TO    COMMERCIAL    TAPER.  §    96 

But  in  order  that  the  act  of  the  partner  may  be  binding 
upon  the  other  members  of  the  firm,  without  their  express 
assent,  it  must  fall  legitimately  within  the  scope  of  the 
firm's  business,  as  well  as  be  done  in  the  course  of  their 
business.  Thus,  for  example,  a  partner  has  the  power  to 
make,  accept*,  and  negotiate  commercial  paper  in  the  name 
of  the  firm,  only  when, the  nature  of  the  firm's  business  re- 
quires the  exercise  by  the  partner  of  this  implied  authority. 
If  it  was  unnecessary  and  unusual  for  a  partnership  in  a 
particular  business  to  issue  commercial  paper,  the  partners 
would  not  have  the  implied  authority  to  make  notes  and 
draw  and  accept  bills  in  the  firm's  name;  and  the  paper 
issued  by  such  a  partner  would  not  be  binding  upon  the 
other  partners,  unless  they  expressly  authorized  or  ratified 
their  issue.  It  becomes  necessary,  therefore,  to  ascertain 
in  what  kinds  of  partnership  the  partners  have  the  implied 
authority  to  issue  notes  and  bills,  that  will  bind  the  firm. 

§  96.  Trading  partnerships. — The  most  common  class 
of  partnerships,  in  which  the  partners  have  this  implied 
authority,  is  that  of  trading  or  mercantile  and  manufac- 
turing partnerships.  In  all  these  kinds  of  partnerships, 
capital  is  very  much  needed,  and  when  trade  is  conducted 
on  any  large  scale,  it  cannot  be  confined  to  the  cash  basis. 
The  borrowing  of   money  becomes  an  ordinary  incident  of 

trading.  Hence  partners  in  these  kinds  of  partnerships 
have  the  implied  authority  to  make  and  negotiate  commer- 
cial paper  in  the  name  of  the  firm.  And  a  note  or  bill, 
given  or  accepted  by  one  partner  in  the  name  of  the  firm, 
will  be  binding  upon  the  firm,  although  the  partner  may 
have  used  his  power  for  his  own  benefit ;  provided  the  lender 
or  holder  of  the  paper  was  not  aware  of  the  fraud  of  the 

several  individuals,  or  to  the  plaintiff  in  particular,  or  to  some  person 
through  whom  he  claims."  Tindall,  Ch.  J.,  in  Fox  v.  Clifton,  6  Bing. 
795. 

163 


§    !K)  rAUTNKKS    AS    PAKTIES.  [(II.   VI. 

partner.^  Uudcr  this  hcud,  it  has  been  held  that  working 
11  mill,  and  trading  are  such  kinds  of  business  from  which 
partners  may  claim  the  implied  authority  to  issue  commer- 
cial paper  in  the  name  of  the  firm  ;  but  that  farming  is  not.^ 
So,  also,  is  it  the  im|)li(Kl  authority  of  partners  engaged  in 
buying  and  slaughtering  cattle; '^  but,  on  the  other  hand, 
partners  in  mining  or  gaslighting  business,  have  been  held 
to  have  no  implied  authority  to  bind  the  firm  by  the  exe- 
cution and  negotiation  of  commercial  paper.* 


^  Kimbro  v.  Bullitt,  22  How.  256;  Hayward  v.  French,  12  Gray,  453; 
U.  S.  Bank  v.  Bouney,  5  Mason,  17G;  Whittaker  v.  Rrowu,  16  Wend.  505; 
Onandaj^o  Co.  Bk.  v.  Du  Puy,  17  Wend.  47;  Ihmsey  v.  Negley,  1  Casey, 
297;  Sedgwick  v.  Lewis,  70  Pa.  St.  221;  Bnckner  v.  Lee,  8  Ga.  285;  Sher- 
wood V.  Snow,  46  Iowa,  485;  Chitty  on  Bills  (13  Am.  ed.),  58. 

2  Kimbro  v.  Bullitt,  22  How.  256;  Greenslade  v.  Dower,  7  B.  &  C.  6  35 
(1  Man.  &  Ry.  640.) 

3  Wagner  v.  Simmons,  61  Ala.  143. 

*  Dickinson  t?.  Valpy,  10  B.  &  C.  128;  Brumah  v.  Roberts,  3  Bing.  N. 
C.  96.  In  the  case  of  Dickinson  v.  Valpy,  Littledale,  J.,  said:  "  In  the 
case  of  an  ordinary  trading  partnership,  the  law  implies  that  one  part- 
ner has  authority  to  bind  another  by  drawing  and  accepting  bills,  be- 
cause the  drawing  and  accepting  of  bills  is  necessary  for  the  purpose 
of  carrying  on  a  trading  pai-tuership ;  but  it  does  not  follow  that  it  is 
necessary  for  the  purpose  of  carrying  on  the  business  of  a  mining  com- 
pany. Evidence  of  the  nature  of  the  company  ought  to  have  been  given, 
to  show  that,  in  order  to  carry  into  effect  the  purposes  lor  which  it  was 
instituted,  it  was  necessary  that  Individual  members  should  have  the 
power  of  binding  the  others  by  drawing  and  accepting  bills  of  exchange. 
In  the  absence  of  any  such  evidence,  I  am  of  opinion  that  it  is  not  com- 
petent to  individual  members  of  a  mining  company  (which  is  not  a  regu- 
lar trading  company)  to  bind  the  rest  by  drawing  or  accepting  bills. 
One  of  several  persons  interested  in  a  farm  has  now  power  to  bind  the 
others  by  drawing  or  accepting  bills,  because  it  is  not  necessary,  for 
the  purposes  of  carrying  on  the  farming  business,  that  bills  should  be 
drawn  or  accepted.  The  object  of  persons  concerned  in  such  an  under- 
tixking  is  to  sea  the  produce  of  the  farm ;  and  though,  with  a  view  to 
such  sale.  It  may  be  necessary  to  buy  many  things  in  order  to  raise  and 
put  the  produce  in  a  salable  state,  yet  it  is  not  necessary  for  that  purpose 
that  bills  of  exchange  should  be  drawn.  Even  if  that  were  necessary  for 
the  purpose  of  carrying  on  a  mining  concern,  though  not  for  tlie  pur- 
pose of  managing  a  farm,  it  was  incumbent  upon  the  plaintiff,  in  this 
104 


CH.  VI.]  PARTIES    TO    COMMERCIAL    PAPER.  §    97 

Whether  a  particular  business  requires  in  the  partners  this 
implied  power,  is  a  question  of  fact,  the  answer  to  which  will 
very  often  vary  with  circumstances  in  respect  to  the  same 
business.  The  mining  or  other  operations  may  be  so  limited 
in  extent  that  the  power  of  the  partner  to  bind  the  firm  as 
parties  to  commercial  paper  may  not  be  necessary  to  their 
effective  prosecution ;  and  a  trading  concern  may  carry  on 
so  small  and  limited  a  business,  that  this  power  would  not 
be  found  necessary.  But  when  mining  and  even  farming 
is  carried  on  on  such  an  extensive  scale,  that  large  capital 
and  credit  are  required,  it  would  be  unreasonable  to  deny  to 
the  partners  of  such  a  concern  the  implied  authority  to  bind 
the  firm  by  the  issue  of  notes  and  bills,  and  recognize  the 
same  power  in  the  smallest  trading  concern.^  But  in  all 
such  cases,  the  partners  can  exercise  this  implied  authority, 
only  so  far  as  its  exercise  is  necessary  to  the  prosecution  of 
the  partnership  business.^ 

§97.  Other  than  trade  partnerships. — But  when  a 
partnership's  business  does  not  require  capital  and  credit, 
the  partners  have  no  implied  power  to  bind  each  other  as 
parties  to  commercial  paper.  In  order  to  bind  the  other 
partners,  the  partner,  executing  the  paper  in  the  name  of  the 
firm,  must  be  shown  to  have  from  the  others  an  express 
authority  to  bind  them.  This  has  been  the  invariable  rule 
in  respect  to  a  firm  of  practicing  lawyers;^  and  likewise  as 
to  the  practitioners  of  medicine,  except  that   to    medical 

case,  to  have  shown,  either  from  the  very  nature  of  this  company,  that 
it  was  necessary,  or,  from  the  practice  in  other  similar  companies,  that 
it  was  nsual." 

1  1  Parsons'  N.  &  B.  139. 

2  Cooke  V.  Branch  Bank,  3  Ala.  175. 

3  Garland  v.  Jacomb,  L.  R.  8  Exch.  218  (6  Moak  Eng.  R.  289)  ;  Heclley 
V.  Bainbridge,  3  Q.  B.  (42  E.  C.  L.  R.)  316;  Levy  v.  Pyne,  Car.  &  M.  453; 
Marsh  t>.  Gold,  2  Pick.  285;  Friend  u,  Durgee,  17  Fla.  Ill;  Smith  u. 
Sloan,  37  Wis.  285. 

165 


§    i'"^  PARTNERS    AS    PARTIES.  [CH.   VI. 

l)artnors  is  conceded  the  implied  power  to  bind  each  other 
by  paper  given  for  medicines  and  whatever  is  necessary  to 
the  practice  of  the  profession.^ 

§   98.     Accommodation    paper,    liability    of    partners 

on.  —  The  implied  authority  of  the  partner  to  bind  the 
firm  as  a  party  to  commercial  paper  is  limited  to  transac- 
tions of  the  kind,  which  are  entered  into  for  the  benefit  of 
the  firm,  and  within  the  line  of  its  business.  Whenever 
the  partner  undertakes  to  sign  the  firm  name  to  commercial 
paper  for  his  own  private  benefit,  or  for  the  benefit  of 
third  persons,  he  exceeds  his  implied  authority,  and  the 
firm  will  not  be  bound  by  his  act,  as  long  as  the  paper  does 
not  pass  into  the  hands  of  the  indorsee,  who  takes  it  for  a 
valuable  consideration  and  without  notice  of  the  fraud  or 
wrong  done  to  the  firm.'^  There  may  be,  and  sometimes 
are,  cases  in  which  the  partner  may,  in  the  transaction  of 
his  private  business,  rightfully,  that  is,  without  committing 
a  fraud  on  the  other  partners,  make,  draw,  accept  and  in- 
dorse, bills,  checks  and  notes,  in  the  name  of  the  firm;  and 
for  these  reasons,  the  English  authorities  seem  to  hold  that 
the  execution  and  negotiation  of  the  firm's  commercial 
paper  by  one  partner  for  the  liquidation  of  his  private 
debt,  is  not  necessarily  notice  to  the  private  partner's  credi- 
tor of  the  wrongful  use  of  the  firm's  name."^     But,  since  the 

^  Crosthwaite  v.  Ross,  1  Humph.  23. 

2  Xational  Bank  v.  Law,  127  Mass.  72;  Bank  of  Rochester??.  Bowen,  7 
Wend.  158;  Foot  v.  Sabin,  19  Johns.  154;  Atlantic  St.  Bank  v.  Savery,  82 
N.  y.  294;  Tomkins  v.  Woodward,  5  W.  Va.  229;  Chenowith  v.  Chamber- 
lain, 6  B.  Mon.  60;  Boyd  v.  Plumb,  7  Wend.  309;  Austin  v.  Vandemark, 
4  Hill,  259;  Bank  of  Vergennes  v.  Cameron,  7  Barb.  143;  Bloom  v. 
Helm,  53  Miss.  21;  Heffron  v.  Hanaford,  40  Mich.  405;  Burke  v.  Wilbur, 
42  Mich.  329. 

3  In  Ridley  v.  Taylor,  13  East,  175,  Lord  EUenborough,  C.  J.,  said: 
"  This  bill  had  an  existence,  according  to  its  apparent  date,  eighteen 
days  before  the  time  of  its  delivery  to  the  plaintiffs;  it  was  drawn  for  a 
sum   considerably  exceeding  the  debt,  and  was  not  only  drawn  and  in- 

16(j 


CH.  VI.]  PARTIES    TO    COMMERCIAL    PAPER.  §    98. 

use  b}'-  the  partner  of  this  implied  authority  for  his  own 
accommodation,  cannot  under  any  circumstances  be  con- 
sidered necessary  to  the  prosecution  of  the  firm's  business; 
and  the  imphed  authority  rests  upon  the  necessity  of  the 
implication  to  carry  out  the  purposes  of  the  copartnership ; 
the  American  courts  hold  that  in  no  case  can  the  partner 
under  his  implied  authority  sign  the  firm's  name  to  com- 
mercial paper  for  his  own  benefit.  * 

dorsecl,  but  accepted  also,  before  it  was  produced  to  them;  and  although 
it  is  stated  iu  the  case,  that  in  fact  the  bill  was  drawn  and  indorsed  by 
Ewbank  in  the  partnership  name,  it  does  not  appear  that  the  plaintiffs 
knew  that  it  was  drawn  and  indorsed  by  him.  Under  these  circum- 
stances, it  might  reasonably  be  supposed,  by  the  party  to  whom  it  was 
given,  to  be  a  partnership  security,  of  which  Ewbank,  the  partner  in 
possession  of  it,  had  for  some  valuable  consideration,  or  in  virtue  of 
some  arrangement  with  Ord,  the  other  partner,  become  the  proprietor, 
so  as  to  be  authorized  to  deal  with  it  as  his  own.  At  any  rate,  the  con- 
trary does  not  either  actually  or  presumptively  appear."  "As  a  partner 
may,  in  his  individual  capacity,  have  a  claim  upon  the  ^rm,  in  the 
respect  of  which  he  might  draw,  accept  or  indorse  a  bill  in  the  name  of 
the  firm,  it  has  in  other  cases  been  considered  that  the  mere  circum- 
stance of  the  party  to  whom  he  delivers  it,  knowing  that  he  was  using  it 
for  his  private  benefit,  does  not  of  itself  necessarily  afford  sufficient 
presumptive  evidence  of  collusion  to  invalidate  the  transaction,  and  that 
the  partner  objecting  to  liability  must  prove  all  the  facts  sufficient  to 
induce  a  jury  to  find  that  the  partner  really  acted  fraudulently,  and  that 
the  holder  had  notice  of  the  fraud."  Chitty  on  Bills  (13  Am.  ed.), 
60,  citing  Ex  parte  Bonbonus,  8  Ves.  542;  Ridley  v.  Taylor,  13  East,  175. 
But  see  Ex  parte  Goulding,  2  G.  &  J.  118;  Hope  v.  Cust,  1  East,  53; 
Shirreff  v.  Wilks,  1  East,  48;  Green  u.  Deakiu,  2  Stark.  347.  In  Ex 
parte  Goulding,  the  Vice-Chancellor  said:  "After  an  attentive  consid- 
eration of  the  authorities,  I  am  of  the  opinion  that  when  one  partner 
gives  the  acceptance  of  the  firm  in  payment  of  his  separate  debt,  vrith- 
out  authority  from  his  copartner,  such  acceptance  does  not  bind  the 
firm."  See  also  Yates  v.  Dalton,  28  L.  J.  Exch.  69;  Darlington,  etc., 
Banking  Co.,  ex  parte,  in  re  Riches,  11  Jur.  (N.  s.)  122;  Smith  v.  Cole- 
man, 7  Jur.  1053,  V.  C.  B. 

1  Rogers  v.  Batchelor,  12  Pet.  229;  Smith  v.  Strader,  4  How.  404; 
Sweetzer  v.  French,  2  Cush.  309;  Dob  v.  Halsey,  16  Johns.  84;  Foot  u. 
Sabin,  19  Johns.  154;  Williams  v.  Wallbridge,  3  Wend.  415;  Gale  v. 
Miller,  54  N.  Y.  538;  Atlantic  St.  Bank  v.  Savery,  82  N.  Y.  294;  Union 
N.  B.  V.  Underbill,  21   Hun  (N.  Y.),  178;  Windham  Co.  Bk.  v.  Kendall, 

167 


§    !*i<  TAHTNERS    AS    PAllTIES.  [cil.    \:. 

In  order  to  hold  the  otlier  partners  liable  on  such  paper, 
it  must  be  shown  that  they  expressly  authorized  its  issue. 
Mere  knowledge  of  its  negotiation  is  not  suliicient,^  but  a 
formal  authority  is  not  necessary.  It  may  be  given  by 
acts,  and  implied  from  circumstances,^  as,  for  example, 
previous  recognitions  of  similar  transactions.''  When  the 
payee  brings  the  suit  on  the  accommodation  paper,  issued 
b}'  the  partner  in  the  name  of  the  firm,  he  makes  out  a, 
prima  facie  case,  by  proving  the  execution  of  the  paper  by 
one  of  the  firm;*  and  the  burden  of  proof  is  on  the  defend- 
ants to  show  that  the  paper  had  been  given  without 
authority'  for  the  accommodation  of  the  partners  signing 
the  firm's  name,  or  of  some  third  person.^ 

§  99.  Accommodation  paper,  in  the  hands  of  houa  fide 
indorsees.  —  As  long  as  the  accommodation  paper  remains 
in  the  hands  of  the  original  payee,  the  partners  can  always 
defend  against  liability  on  the  unauthorized  paper.     But  as 

7  R.  I.  77:  Baird  v.  Cochran,  4  Serg.  &  R.  397;  Noble  v.  McClintock,  2 
Watts  &  S.  152;  Tompkins  v.  Woodward,  5  West  Va.  229;  Taylor  v. 
Hillyer,  3  Blackf.  433;  Mauldin  v.  Branch  Bk.,  2  Ala.  502;  Sherwood  t>. 
Snow,  46  Iowa,  486;  Bank  of  Commerce  v.  Selden,  3  Minn.  155.  In 
Davis  V.  Smith,  27  Minn.  390,  it  was  held  that  where  a  partner  paid  a 
private  debt  by  a  check  of  the  firm,  drawn  by  himself,  the  creditor 
should  be  charged  with  notice  of  the  wrongful  use  of  his  implied  author- 
ity, and  that  he  could  not  hold  the  other  partners  liable  on  the  check. 

1  Elliott  V.  Dudley,  19  Barb.  326.  But  it  would  be  binding  upon  thoiii 
if  they  should  receive  the  proceeds,  and  fail  to  repudiate  in  a  reason- 
able time.     Foster  v. Andrews,  2  Peun.  160. 

2  Gansevoort  v.  Williams,  14  Wend.  133. 

-  Michigan  Bk.  v.  Eldred,  9  Wall.  544;  Butler  v.  Stocking,  4  Seld. 
108. 

^  Michigan  Bk.  v.  Eldred,  9  Wall.  548;  Doty  v.  Bates,  11  Johns.  544; 
Vallett  V.  Parker,  6  Wend.  615,  Foster  v.  Andrews,  2  Penn.  160;  Man- 
ning V.  Hays,  6  Md.  5;  Hamilton  v.  Summers,  12  B.  Mon.  11;  First  Nat. 
Bk.  r.  Carpenter,  34  Iowa,  432;  Kuapp  v.  McBride,  7  Ala.  19;  Davis  v. 
Cook,  14  Nev.  26,5. 

•'  Rogers  v.  Batchelor,  12  Pet.  299;  V/i!liams  v.  Wallbridge,  3  Weud. 
415;   Gale  r.  Miller,  .^4  N.  Y.  539;  Taylor  v.  Hillyer,  3  Blackf.  433. 
168 


CH.   VI.]  PARTIES    TO    COMMEUCIAL    PAPER.     ^  §    'J9 

soon  as  it  passes  into  the  hands  of  an  indorsee,  the  law  of 
negotiability  applies,  and  enables  the  indorsee  to  recover  of 
the  other  partners,  if  he  takes  the  paper  for  value  and  with- 
out knowledge  of  its  wrongful  issue.  The  indorsee  must,  in 
order  to  recover,  show  that  he  is  an  innocent  holder  for 
value.'  If  the  word  "  surety  "  was  added  to  the  signature 
of  the  firm,  it  would  charge  every  holder  with  notice  of  the 
questionable  use  of  the  firm's  name,  and  prevent  any  en- 
forcement of  the  liability  of  those  partners  who  did  not 
assent  to  such  use  of  the  name;  ^  unless  the  use  of  the  firm's 
name  as  surety  was  in  fact  for  the  benefit  of  the  firm  when 
it  is  held  that  the  partners  may  be  boiind  by  the  otherwise 
unauthorized  act  of  the  partner.^  So,  also,  when  a  firm's 
name  is  so  indorsed  on  the  back  of  the  paper,  that  it  can- 
not be  taken  as  an  indorsement,  in  the  strict  meaning  of 
the  term,  it  is  constructive  notice  to  every  holder  that  the 
signature  has  been  made  as  a  guarantor,  and  hence  unlaw- 
fully made,  if  done  without  the  express  authority  of  the 
partners.*  But  where  the  indorsement  is  made  in  the  regu- 
lar order  of  indorsements  proper,  the  holder  can  recover 
on  it.®  But  if  the  private  paper  of  a  partner  is  regularly 
indorsed  by  the  firm's  name,  so  that  the  firm  appears  to  be 
the  payee  or  a  prior  indorsee,  the  fact,  that  the  indorse- 
ment of  the  firm  is  in  the  handwriting  of  the  partner  who 
was  the    maker,  would  not  be  a  circumstance  which  would 

1  Mouroe  v.  Cooper,  5  Pick.  412;  Bk.  of  St.  Albaus  v.  Gillilaud,  23 
Weud.  311;  Bauk  of  Vergeuues  v.  Camei'ou,  7  Barb.  143;  Hart  v.  Pottei. 
4  Duer,  458;  Garner  v  Camerou,  31  Mich.  373;  Hogg  v.  Skene,  34  L.  J.  C. 
P.  (X.  s.)  153.  But  see  Musgrave  v.  Drake,  5  Q.  B.  (48  E.  C.  L.  E.)  185; 
Micliigau  Bank  v.  Eldred,  9  Wall.  548. 

2  Foot  V.  Sabine,  19  Johns.  154;  Boyd  v.  Plumb,  7  Weud.  309;  Austin 
V.  Vandemark,  4  Hill,  259. 

^  Langau  v.  Hewitt,  13  Smedes  &  M.  122. 

■*  National  Bauk  v.  Law,  127  Mass.  72.  See  National  Security  Bk.  v. 
McDonald,  127  Mass.  82. 

^  AtkisNat.  Bankv.  Savery,  127  Mass.  75;  Atlantic  St.  Bank  v.  Savery, 
82  N.  Y.  291;  Stimson  r.  Whitney,  130  Mass.  591. 

169 


§     102  PAKTNEHS    AS    PARTIES.  [CH.   VI. 

charge  subsequent    indorsees  for  value  with    notice  of  the 
iutlorsemeut  being  an  unauthorized  accommodation.* 

§  100.  Special  limitations  xipon  the  authority  of  part- 
ners.—  The  partners  may,  in  their  articles  of  copart- 
nership, imijose  special  limitations  u})on  the  implied 
authority  of  each  other  to  bind  the  firm  in  the  issue  of 
commercial  paper ;  and  any  paper  executed  in  violation  of 
these  limitations  will  be  invalid  in  the  hands  of  those  who 
have  knowledge  of  the  restriction  upon  the  power  of  the 
partners.  But  the  innocent  holder  for  value  will  be  able 
to  recover  of  the  firm  on  such  paper,  notwithstanding  its 
issue  violates  the  express  limitations  of  the  articles  of  co- 
partnership.^ 

§  101.  Ratification  of  unauthorized  issue  of  com- 
mercial paper.  —  The  members  of  a  firm  may  at  any  time 
ratify  the  unauthorized  issue  of  notes  and  bills;  and  if  the 
firm  knowingly  receive  and  hold  the  proceeds  of  such 
paper  it  will  operate  as  a  ratification,  as  much  so  as  a  for- 
mal ratification.^ 

§    102.  Joint  and  several  notes  executed  by  a  partner. 

The  implied  authority  of  the  partner  to  sign  the  firm's  name 

1  Moorehead  v.  Gilmer,  77  Pa.  St.  118;  Miller  v.  Cousoliclatiou  Bank, 
12  Wright,  514. 

2  Winship  u.  Bank  of  U.S.,  5  Pet.  529;  Kimbro  v.  Bullit,  22  How. 
256;  Michigan  Bank  v.  Eldred,  9  Wall.  544;  Waldo  Bk.  v.  Lambert,  16 
Me.  416;  Redlow  w.  Churchill,  73  Me.  146  (40  Am.  Rep.  345) ;  Catskill 
Bank  v.  Stall,  15  Wend.  364;  s.  c.  18  Wend.  460;  Wells  v.  Evans,  20 
Wend.  251;  First  Nat.  Bk.  v.  Morgan,  6  Huu,  340;  Parker  v.  Burgess, 
5  R.  I.  277;  Cotton  v.  Evans,  1  Dev.  &  B.  Eq.  284;  Miller  v.  Hughes,  1 
A.  K.  Marsh.  181;  Wright  v.  Brosseau,  73  111.  381;  Bascom  v.  Young,  7 
]\Io.  1.  See  Walker  v.  Kee,  14  S.  C.  142;  Hibernian  Bank  v.  Evermau, 
52  Miss.  500. 

3  Richardson  v.  French,  4  Met.  577;  Whitaker  v.  Brown,  16  Wend,  505; 
Clay  V.  Cottrell,  18  Pa.  St.  408.  Hardmau  v.  Bk.  of  Middletou,  28  Pa.  St. 
440. 

170 


CH.  VI.]  PARTIES    TO    COMMERCIAL    PAPER.  §     103 

to  commercial  paper  does  not  extend  to  the  execution  of 
joint  and-  several  notes.  The  partner  has  no  authority  to. 
bindthe  partnersindividually  as  parties  to  commercial  paper 
and  hence  has  no  power  to  make  a  note  on  which  they  will 
be  severally  liable.  But  if  a  partner  makes  a  joint  and 
several  note,  it  will  be  good  as  a  joint  note,  though  void  as 
a  several  obligation. ^ 

§  103.  Form  of  the  firm's  signature. — The  truly 
proper  form  of  signature  for  a  firm,  in  any  written  contract, 
is  for  the  partner  who  signs  to  write  the  firm  name.  He 
may  add  his  own  name,  to  indicate  who  signed  the  firm 
name,  but  that  is  not  necessary.  It  will  also  be  a  good 
signature  for  the  firm,  if  the  partner  writes  the  individual 
names  of  all  the  partners,  without  using  the  name  of  the 
partnership.  2 

Ordinarily  the  style  of  the  firm  must  be  closely  follow^ed 
in  signing  for  the  firm ;  but  if  there  is  an  immaterial  varia- 
tion, the  firm  will  nevertheless  be  bound  by  the  signature.^ 
But  the  firm  will  not  be  bound  if  the  variation  is  material. 
Thus,  it  has  been  held  that  if  the  style  of  the  firm  was 
simply  "John  Blurton,"  the  firm  will  not  be  bound  on  a 
note  signed  by  "  John  Blurton  &  Co."  *  If,  however,  the 
firm  adopt  two  or  more  names  or  styles  of  signature,  as 
they  have  a  right  to  do,  the  firm  will  be  bound  by  either 
name.^ 

1  Maclae  v.  Sutherland,  3  El.  &  B.  (77  E.  C.  L.  R.)  36;  Perring  v. 
Hone,  2  C.  &  P.  401;  s.  c.  4  Bing.  (77  E.  C.  L.  R.)  28.  See  McAuley  v. 
Gordon,  64  Ga.  221, 

2  Patch  u.  Wheatland,  8  Allen,  102;  McGregor  v.  Cleveland,  5  Wend. 
475;  Holden  v.  Bloxum,  35  Miss.  381;  Morton  v.  Seymour,  3  C.  B.  792; 
Maynard  v.  Fellows,  43  N.  H.  255. 

3  Williamson  v.  Johnson,  1  B.  &C.  146;  Forbes  v.  Marshall,  11  Exch. 
166;  Faith  v.  Richmond,  11  Ad.  &  El.  339. 

*  Kirk  V.  Blurton,  9  M.  &  W.  284;  Maclae  v.  Sutherland,  3  El,  &  B.  31. 
But  see  Drake  v.  Elwyn,  1  Caine,  184. 

*  MofiEat  V.  McKissick,  8  Baxt.  517. 

171 


§     104  rAKTNKlIS    AS    PARTIES.  [CIl.   VI. 

The  jreneral  rule  in  this  connection  is  that  it  must  appeal 
on  the  face  of  the  paper  that  it  is  the  obligation  of  the  tirm. 
so  that  the  firm  name  must  appear  on  the  paper.  But  there 
is  no  special  formality  required.  Thus,  the  signature 
"John  Smith  for  .John  Smith  &  Co.,"  would  be  binding 
upon  the  firm,  even  though  the  note  reads  *'  I  promise."  ^ 
But  the  name  of  the  firm  must  appear  on  the  face  of  the 
paper.  In  no  case,  will  a  firm  be  bound  by  a  bill  or  note 
made  out  in  the  name  of  the  signing  partner,  unless  the 
firm  are  doing  business  in  his  name. 

Where  an  unincoporated  association  instructs  its  president 
or  other  ofBcer  to  execute  a  note  in  the  name  of  the  associa- 
tion, the  members  are  litible  as  partners  for  such  a  note,  and 
may  be  sued  Individnally  as  the  pi'incipal  makers.^ 

§  104.  Firm  doing  business  in  partner's  name. — The 

partnership  may  adopt  any  name  or  style  of  signature,  al- 
though the  names  of  the  partners,  or  of  any  one  of  them, 
do  not  appear  in  it.  They  could,  therefore,  adopt  the 
name  of  one  of  the  partners  as  the  firm's  name,  and  trans- 
act all  their  business  in  his  name.  But  in  consequence  of 
the  fact  that  the  partner  uses  the  same  name  in  his  private 
transactions,  a  note  or  bill  signed  in  his  name  is  prima 
facie  his  private  obligation,  so  that  in  order  to  hold 
the  firm  liable  on  such  an  instrument,  it  must  be  shown  af- 
firmatively to  have  been  given  as  an  obligation  of  the  firm.-^ 
But    it  has  been  held  that  if   the  partner,  whose  name  is 

1  Gallway  v.  Mathew,  10  East,  264  (1  Camp.  403) ;  Staats  v.  Hewlett, 
4  Den.  559;  In  re  Clark,  14  M.  &  W.  4G9  (overruliug  Hall  v.  Smith,  1  B.  & 
C.  407.     See  also  Doty  v.  James,  11  .Johns.  544. 

*  Ferris  v.  Shaw,  5  Mo.  App.  279. 

'  U.  S.  Banli  v.  Biuney,  5  Mason,  17G;  Mercantile  Bank  v.  Cox,  38  Me, 
500;  Manufacturers,  etc.,  Bank  v.  Wiuship,  5  Pick.  11;  Bank  of  Roches- 
ter V.  Monteath,  1  Denio,  402;  Crocker  r.  Colwell,  46  N.  Y.  212;  Cunning- 
ham r.  Sraith.sou,  12  Leigh,  43;  Buckner  ?;.  Lee,  8  Ga.  285:  Macklin  r. 
Crutchey,  <!  Bush,  401;  Boyle  ». -Skinner,  10  Mo.  82;  South  Carolina 
Bank  v.  Case,  8  B.  &  C.  433;  Ex  parte  Bolitho,  1  Buck  100. 
172 


I 


ClI.  VI.]  PARTIES    TO    COMMERCIAL    PAPER.  §     105 

adopted  as  the  tirra's  name,  is  in  no  private  business,  the 
presumption  of  law  will  be  that  the  paper  signed  in  his 
iiame  is  the  paper  of  the  firm.^ 

§  105.  Signature  of  firm  in  acceptances.  — But  while  it 
is  clear  that  the  firm  name  must  be  used  in  making  notes  or 
drawing  bills,  in  order  to  bind  the  firm,  the  rule  is  not 
strictly  applied  to  acceptances  by  the  firm.  In  Esgland, 
and  in  several  of  the  United  States,  it  has  been  held  that 
when  a  bill  is  drawn  on  the  firm,  the  acceptauvic  by  one  of 
the  partners  in  his  own  name  will  be  binding  upon  the  firm ; 
for  since  he  could  only  accept  for  the  firm,  his  signature 
could  not  be  presumed  to  be  an  acceptance  by  himself.^ 
But  the  contrary  doctrine  is  maintained  by  the  Supreme 
Court  of  Minnesota  in  a  strong  opinion,  and  the  position 
is  taken  that  the  acceptance  by  a  partner  is  not  binding 
upon  the  firm,  unless  it  is  made  in  the  name  of  the  firm.-^ 
But  the  Minnesota  court  was  drawn  off  from  the  funda- 
mental reason  of  the  matter  by  the  idea  that  a  statute,  pro- 
viding for  the  acceptance  to  be  in  writing,  required  the 
signature  to  be  in  the  firm  name.  The  reason  for  ordi- 
narily  requiring  the  signature  to  be  in  the  firm's  name  is 
that  in  no  other  way  can  it  be  shown  on  the  face  of  the  in- 

'  Yorkshire  Banking  Co.  v.  Beason  42  L.  T.  R.  455. 

^  In  Mason  v  Rumsey,  1  Camp.  384,  the  bill  was  drawn  on  "  Rumsey 
&  Co,"  and  accepted  in  the  name  of  "  T.  Rumsey,  Sr."  Lord  Elleu- 
borough  said.  "This  acceptance  does  not  prove  the  partnership;  but  ii 
the  defendants  were  partners  they  are  both  bound  by  it.  For  this  pur- 
pose it  would  liave  been  enough  if  the  word  '  accepted  '  had  been  writ- 
ten on  the  bill,  and  the  effect  cannot  be  altered  by  adding  *  T.  Rumsey, 
Sr.'  If  a  bill  of  exchange  is  drawn  upon  a  firm,  and  accepted  by  one  of 
the  partners,  he  must  be  understood  to  exercise  his  power  to  bind  his 
copartners,  and  to  accept  the  biJl  according  to  the  terras  in  which  it  was 
drawn."  See,  to  tlie  same  effect,  Wells  v.  Masterman,  2  Esp.  731;  Doi- 
man  i\  Orchard,  2  C.  &  P.  104;  Dougal  v.  Cowles,  5  Day,  511 ;  Tolman  c. 
Hanrahan,  44  V7:s.  133;    1  Par.sons'  N.  &  B.  123. 

*  Heenan  v.  Nash,  8  Miuu.  409. 

173 


§     100  PAKTXEKS    AS    PAUTIES.  [fll.  VI. 

strument  that  the  firm  was  to  be  bouud.  But  when  a  bill 
is  drawn  ou  a  firm,  no  partner  can  accept  it  in  his  indi- 
vidual capacity,  and  hence  if  a  partner  accepts  the  bill  in 
his  own  name,  he  could  only  have  signed  in  the  capacity 
of  a  partner.  Unless  the  statute  expressly  requires  that 
the  written  acceptance  should  be  signed  in  the  firm's  name, 
the  court  can,  and  should,  presume  that  the  partner  in- 
tended to  bind  the  firm.  No  other  construction  would  })e 
compatible  with  the  validity  of  the  acceptance,  and  the  law 
always  inclines  to  that  construction  of  a  writing,  which  will 
enable  it  to  take  effect, 

§  106.  The  effect  of  dissolution  of  partnership  —  What 
notice  required. — The  power  of  the  partner  to  bind  the 
firm  by  his  acts  terminates  with  the  dissolution  of  the  part- 
nership, it  matters  not  how  the  dissolution  occurs  ;  whether 
by  mutual  consent,  or  expiration  by  its  own  limitations,  or 
by  the  death  or  bankruptcy  of  one  of  the  partners.  The 
firm  may  also  be  dissolved  by  the  retirement  of  one  of  the 
firm.  But  while  the  mere  dissolution  of  the  firm  will,  as 
between  the  partners,  termmate  the  partner's  implied 
power  to  bind  the  firm,  yet  as  to  third  persons  the  implied 
power  will  continue  to  exist,  as  long  as  the  partners  have 
not  given  to  the  public  the  required  notice  of  the  dissolu- 
tion. This  is  the  ordinary  rule  in  regard  to  dissolutions 
by  mutual  consent  or  by  retirement  of  one  or  more  of  the 
partners.  But  when  a  dormant  or  silent  partner  retires,  since 
he  was  not  known  by  the  public  to  be  a  partner,  and  hence 
the  credit  was  not  given  to  him,  no  notice  of  his  retire- 
ment is  required,  m  order  to  prevent  his  liability  as  a  partner 
from  continuing,^  except,  probably,  as  to  those  persons 
who  actually  knew  of    his  connection  with  the  firm.^     80, 

1  Carter  t?.  Whalley,  1  B.  &  Ad.  11;  Heath  and  Sansom,  4  B.  &  Ad.  172 

2  Farrar  v.  De  Fliine,  1  C.  &  P  580;  Davis  v.  Allen,  3  N.  Y.  168  Nuso 
Vauiner  v.  Becker,  87  III,  281,  Cregler  v.  Durham,  9  Ind.  37' 

174 


CH.  Vr.]  PARTIES    TO    COMMERCIAL    PAPER.  §    106 

also,  is  BO  notice  required  to  terminate  the  liability  of  part- 
ners, where  the  dissolution  occurs  by  operation  of  law  in 
consequence  of  the  death  or  bankruptcy  of  one  or  more  of 
of  the  partners.*  But  in  the  case  of  every  other  dissolution, 
the  partners  will  contniue  to  be  liable  on  the  contracts  made 
in  the  name  of  the  firm,  unless  the  required  notice  is  given. ^ 
The  law  requires  that  the  partners  shall  do  all  that  may 
be  expected  of  a  reasonably  prudent  man,  in  order  to  bring 
the  dissolution  to  the  knowledge  of  those  interested.  The 
partners  have  not  done  all  that  might  reasonably  be  ex- 
pected of  them,  until  they  have  given  actual  notice  by  mail 
or  in  person,  as  the  case  might  be,  to  all  those  who  have 
been  dealing  more  or  less  regularly  with  the  firm.  Notice 
by  publication  would  not  be  sufficient,  as  to  them.-^  But 
since  actual  notice  could  not  be  given  to  all  the  world,  in 
respect  to  those  who  are  not  regular  dealers  with  the  firm, 
it  is  only  required  of  the  partners  to  give  notice  of  the  dis- 
solution by  publication  in  the    daily  press. ^     But  in  any 

1  Dickinson  v.  Dickinson,  25  Gratt  321;  Williams  v.  MatiiewSj  14  La. 
Ann.  11.  But  if  provision  is  made  in  the  will  of  the  deceased  partner 
for  tlie  continuance  of  the  partnership,  tliere  is  practically  no  dissolu- 
tion of  tlie  firm,  and  the  estate  will  be  bound  by  the  contracts  of  the 
firm,  made  after  tlie  death  of  the  partner.  Blodgett  v.  American  Nat. 
Bank,  49  Conn.  9. 

2  Cony  u.  Wheelock,  33  Me.  366;  Whitman  v.  Leonard,  3  Pick.  177; 
Lansing  v.  Gaine,  2  Jolins.  300;  Bristol  v.  Sprague,  8  Wend.  423;  Davis 
r.  Allen,  3  N.  Y.  172;  Ulrich  v.  McCormick,  66  Ind.  246;  Doversy  v. 
Kellogg,  44  111.  1 14. 

3  Bristol  V.  Sprague,  8  Wend.  423;  Austin  v,  Holland,  69  N.  Y,  571; 
Vernon  V.  Manhattan  Co.,  22  Wend.  183;  Parkin  v.  Carruthers,  3  Esp. 
248;  Hamburg  v.  Rungles,  2  Morris  (Pa.),  148;  Hollands.  Long,  57 Ga. 
36;  Stewart  V.  SonueborUj  51  Ala.  126;  Haynes  v.  Carter,  12  Heisk.  7; 
Gilchrist  v.  Brande,  58  Wis.  184.  It  has  been  lield  tliat  persons  who 
merely  discount  the  paper  of  tlie  firm  are  not  so  far  considered  regular 
dealers  of  the  Arm,  as  to  require  actual  notice  of  tlie  dissolution  to  be 
given  to  tliem.  City  Bank  w.  McChesney,  20  N,  Y.  240;  City  Bank  v. 
Dearborn,  20  N.  Y.  244.  But  see  Mechanic's  Bank  v.  Livingston,  33 
Barb.   4.">8;  Bank  u.   Mudgett,  45   Barb.  663. 

*  Lovejoy  v.  SpafEord,  93  U.  S.  440;  Uhly.  Harney,  78  Ind.  26;  Dick- 

175 


§    107  PARTNERS    AS    PARTIES,  j  CH.  VI 

case,  notice  is  not  necessary,  where  the  third  person,  who 
wishes  to  hold  the  partners  still  liable  as  such,  has  received 
from  some  other  source  actual  knowledije  of  the  dissolu- 
tion. The  actual  knowledge  is  equivalent  to  the  receipt 
of  a  notice.^ 

§  107.  What  powers  implied  in  the  authority  to  close 
up  the  business.  —  The  dissolution  of  the  partnership 
terminates  all  implied  powers  of  the  partners  to  bind  the 
firm,  except  those  powers  which  may  be  necessary  in  clos- 
ing up  the  business  of  the  concern.  These  necessary 
powers  may  be  exercised  by  any  one  of  the  partners, 
unless  in  the  dissolution  of  the  partnership  provision  is 
made,  and  notice  given  to  the  world,  that  some  one  of  the 
partners  is  alone  authorized  to  act  for  the  firm  in  closing 
up  its  business. 

As  a  general  proposition,  unless  the  partners  expressly 
authorize  it,  no  partner  can  after  dissolution  bind  the 
other  members  of  the  firm  by  any  note  or  bill  he  may  make 
in  the  name  of  the  firm,  or  by  an  acceptance  of  a  bill,  or 
by  the  issue  of  a  check,  for  the  reason  that  these  power* 
are  not  considered  necessary  in  closing  up  the  business  of 
the  firm.^     So,  also,  is  it  impossible  for  one  partner  after 

inson  v.  Dickinson,  25  Gratt.  321 ;  City  Bauk  v.  McChesney,  20  N.  Y. 
240;  Ketchara  v.  Clark,  7  Johns.  147;  Backus  v.  Taylor,  8i  lud.  503; 
Godfrey  v.  Tunibull,  1  Esp  371.     See   Gaar  v.  Huggius,  12  Bush..  259. 

1  Lovt'joy  V.  Spafford,  93  U  S.  441 ;  Parkin  v.  Carruthers,  3  Esp.  248; 
Hart  V,  Alexander,  2  M.  &  VV.  484;  Ketcham  v  Clark,  6  Johns.  144;  Nat. 
Bank  v.  Morto:i,  I  Hili,  572;  Davis  v.  Allen,  3  N.  Y.  172;  Davis  v.  Keyes, 
38  N.  Y.  94;  Stimson  v  Whitney,  130  Mass.  591;  Prentiss  v.  Sinclair, 
5  Vt.  149;  Dickinson  u.  Dickinson,  25  Gratt.  329;  Martin  v.  Walton,  1 
McCord,  16. 

*  Parker  v.  Macomber,  18  Pick.  505;  Whitman  v.  Leonard,  3  Pick.  177; 
White  V.  Tudor. 24  Tex.  641;  Haddocks.  Crocheron,32  Tex.  270;  Martin 
V.  Walton,  1  McCord,  10;  Parker  v.  Cousins,  2  Gratt.  372;  Long  v.  Story, 
10  Mo.  C30;  Palmer  v.  Dodge,  4  Ohio  St.  21  ;  Myatt  v.  Bell,  41  Ala.  222; 
Bank  '.f  Montreal^.  Page,  I'S  III.  110:  Wvight.son  v.  Pullan,  1  Stark.  375; 
]7(J 


CH.  VI.  J  PARTIES    TO    COMMERCIAL    PAPER.  §     108 

dissolution,  without  express  authority,  to  bind  his  copart- 
ners by  a  renewal  of  a  bill  or  note,  given  before  the  disso- 
lution for  a  firm  debt.^ 

The  authority  to  give  or  renew  notes  and  bills  cannot  be 
implied  from  the  express  autliority  of  one  or  more  of  the 
partners  to  *'  use  the  name  of  the  firm  in  liquidation  only 
of  past  business;"  or  by  similar  grants  of  authority. ^  But 
while  this  is  the  general  rule,  we  find  that  in  Pennsylvania 
the  partner  is  held  to  be  authorized  to  bind  the  firm  by  the 
issue  of  notes  and  bills,  given  in  settlement  of  the  past 
business  of  the  firm.^ 

§  1G8.  Indorsement  of  the  firm's  bills  and  notes  re- 
ceivable after  dissolution.  — Where  the  dissolution  is  ef- 


Dolmau  v.  Orchard,  2  C.  &  P.  104;  Kilgour  v.  Finlayson,  1  H.  BL  155; 
Lausiug  V.  Gaiue,  2  Jolms.  300;  Hackley  v.  Patrick,  3  Johns.  537;  San- 
ford  V.  Mickles,  4  Johns.  224;  Walden  v.  Sherburne,  15  Johns.  409; 
National  Bank  v.  Morton,  1  Hill,  572;  Van  Kcuren  v.  Parmelee,  2  N.  Y. 
525;  Gale  v.  Miller,  54  N,  Y.  53G;  Perrin  v.  Keene,  19  Me.  355;  Dodd  v. 
Bishop,  30  La.  Auu.  1180;  Curry  v.  White,  51  Cal.  530;  Lockwood  v. 
Comstock,  4  McLean,  383;  Tombeckbee  Bank  v.  Dumell,  5  Mason,  56; 
F.  &  M.  Bank  v.  Kercheval,  2  Mich.  506;  Smith  v.  Sheldon,  35  Mich.  42; 
Hamilton  v.  Seaman,  1  Ind.  185;  Floyd  v.  Miller,  61  Ind,  225;  Bank  of 
Port  Gibson  v.  Baugh,  9  Smedes  &  M.  290. 

1  National  Bank  u.  Norton,  1  Hill,  572;  Parker  v.  Cousins,  2  Gratt. 
373;  Stone  v.  Chamberlain,  20  Ga.  259;  Long  v.  Story,  10  Mo.  636; 
Moore  v.  Lackman,  52  Mo.  323 ;  Palmer  v.  Dodge,  4  Ohio  St.  21;  Wilson 
u.  Forder,  20  Ohio  St.  89;  Martin  v.  Kirk,  2  Humpli.  529 ;  Hamilton  w. 
Seaman,  1  Ind.  185.  But  the  attempted  renewal  does  not  destroy  the 
liability  of  the  partners  on  the  original  paper,  and  if  the  pleadings  are 
in  proper  form,  judgment  may  be  rendered  a-iainst  them  on  the  original 
obligation,  in  the  same  suit  which  was  brought  on  the  renewed  note. 
Wilson  V.  Forder,  20  Ohio  St.  89. 

2  Martin  v.  Kirk,  2  Humph.  529 ;  National  Bank  «.  Norton,  1  Hill,  572 
("to  settle  business  of  tlie  firm,  and  sign  its  name  for  that  purpose  "  )  ; 
Hamilton  v.  Seamen,  1  Ind.  185  ("to  settle  all  demands  in  favor  of  or 
against  the  firm"");  Lock  wood  w.  Comstock,  4  McLean,  383;  Bank  of 
Montreal  v.  Page,  98  111.  121. 

»  Davis  V.  Desanque,  5  Whart.  530;  Robinson  v,  Taylor,  4  Pa.  St.  242; 
Brown  v.  Clark,  14  Pa.  St.  409. 

12  177 


§    109  PARTNERS    AS    PARTIES.  [CH.  VI. 

•  fected  by  any  other  cause  than  by  the  death  of  a  partner, 
an  ex-partner  has  no  implied  authority  to  indorse  bills  and 
notes  received  by  the  firm.  It  is  said  that  upon  the  disso- 
lution, the  partners  become  tenants  in  common  of  the  part- 
nership property,  and  it  therefore  requires  the  express  con- 
sent of  all  to  make  a  complete  indorsement  of  the  firm's 
commercial  paper.-  But  if  the  dissolution  occurs  through 
the  death  of  one  of  the  partners,  the  surviving  partners 
become  possessed  of  the  entire  partnership  estate  as  ad- 
ministrators, and  in  this  capacity  they  have  the  power  to 
indorse  all  bills  and  notes  payable  to  the  firm.^  It  is  true 
that  the  personal  representatives,  of  the  deceased  partner 
have  no  control  over  the  partnership  assets,  and  the  sur- 
viving partner  or  partners  can  dispose  of  any  of  the  firm's 
property,  only  accountable  to  the  deceased  partner's  per- 
sonal representatives  for  the  due  administration  of  the 
estate.  But  it  is  very  doubtful  if,  in  the  case  that  there  are 
two  or  more  surviving  partners,  one  of  them  could  indorse 
the  firm's  bills  receivable  without  theconsentof  the  others. 
The  surviving  partners  must,  for  the  same  reasons  as  pre- 
vail in  other  kinds  of  dissolution,  be  held  to  be  tenants  in 
common  of  the  partnership  property,  and  the  assignment 
of  any  of  it  requires  the  assent  of  all. 

§  109.  Bills  aud  notes  executed  before,  and  issued 
after, dissolution.  — Since  bills  and  notes,  and  other  com- 
mercial paper,  take  effect  from,  and  have  no  validity  be- 
fore, deliver}' ;  if  such  a  paper,  signed  in  the  firm  name, 
and  purporting  to  be  a  partnership  obligation,  is  delivered 

1  Abel  V.  Sutton,  3  Esp.  109;  Lumbcrraan's  Bank  v.  Pratt,  51  Me.  563 
Fellows  u.  Wymau,  33  N.  H.  351;  Parker  v.  Macomber,  18  Pick.  605 
Sauford  ».  Mickles,  4  Johns.  224;  Humphreys  v.  Chastaiu,  5  Ga.  166 
Bogeran  v.  Gueringer,  14  La.  Ann.  478;  White  v.  Tudor,  24  Tex.  639. 

2  Johnson  v.  Berlizheimer,  84  111.  54;  Commercial  Nat,  Bank  v.  Proc- 
tor, 98  111.  558;  Jones  v.  Thorn,  2  Mart.  (n.  8.)  463;  Crawshay  v.  Collins, 
15  Ves.  218. 

178 


CH.  VI.]  PARTIES    TO    COMMERCIAL    PAPER.  §    109 

after  the  dissolution  of  the  partnership  by  one  of  the  part- 
ners, without  the  consent  of  the  others,  the  partners  will 
not  be  liable  on  the  paper,  not  even  to  bona  fide  indorsees 
for  value,  provided  they  are  charged  with  constructive  notice 
of  the  dissolution,  even  though  the  paper  has  been  ante- 
dated to  indicate  that  it  had  been  issued  before  the  dissolu- 
tion. Although  commercial  paper  is  presumed  to  have 
been  delivered  on  the  date  stated  in  it,  yet  it  is  not  a  con- 
clusive presumption ;  and  it  may  be  shown  by  parol  evidence, 
it  seems,  even  as  against  bona  fide  indorsees,  that  the  paper 
had  been  delivered  on  a  subsequent  day.^ 

Not  only  will  the  mere  antedating  of  a  firm  bill  or  note, 
which  is  issued  after  dissolution,  not  make  the  other  part- 
ners liable  on  it;  but  it  is  also  very  generally  held  that 
since  a  bill  or  note  is  operative  only  from  the  day  of  de- 

1  In  Lansing  v.  Gaine  &  Ten  Eyck,  2  Johns.  300,  the  notes  issued  by 
T.  after  dissolution  had  been  antedated,  in  order  to  appear  that  they 
had  been  issued  before  dissolution.  In  holding  that  the  defendant, 
Gaine,  could  not  be  held  liable  on  them,  Kent,  Ch.  J.  said:  "  The  notes 
upon  which  this  suit  is  brought  were  delivered  by  Ten  Eyck  to  the 
payees,  some  time  after  notice  had  been  given  in  the  newspapers  of  the 
dissolution  of  the  partnership  of  Gaine  and  Ten  Eyck.  The  date  of  the 
notes  then  becomes  immaterial,  as  they  were  valid  only  from  the  time  of 
their  delivery;  and  unless  the  contrary  be  shown,  the  presumption  will 
be  that  they  were  then  actually  drawn,  and  were  antedated  by  mistake 
or  design.  If  they  had  been  previously  di'awn,  they  had  no  force  while 
in  the  possession  and  under  the  control  of  the  maker.  To  all  legal  pur- 
poses the  notes  are  to  be  considered  as  made  or  drawn  when  they  were 
delivered.  *  *  *  The  fact,  then,  that  the  notes  were  issued  by  Ten 
Eyck,  after  the  partnership  was  dissolved,  is  sufficient  to  exempt  Gaine 
from  being  bound  by  the  notes,  even  if  they  had  been  given  for  a  part- 
nership concern.  The  power  of  one  partner  to  bind  the  other  ceases 
with  the  existence  of  the  partnership.  *  *  *  if  the  notes  while  iu 
the  hands  of  the  payees  did  not  bind  Gaine,  they  are  equally  inoperal  ive 
iu  the  hands  of  the  plaintiff.  They  were  negotiated  to  him  after  they 
had  been  dishonored,  and  he  took  them,  subject  to  all  the  equity  that 
existed  against  them  in  the  hands  of  the  original  payees."  See,  to  the 
same  effect,  Weightman  u.  PuUan,  1  Stark.  375;  Abel  v.  Sutton,  3  Esp. 
108.  That  such  a  bill  or  note  could  not  bind  the  partners,  as  against 
Irmajide  indorsees  for  value,  see  Bristol  v.  Sprague,  8  Wend.  423. 

179 


§     110  PARTNERS    AS    PARTIES.  [cii.  VI. 

livery,  a  firm  bill  or  note  delivered  after  the  dissolution 
"will  not  bind  the  firm,  although  it  had  been  fully  executed 
before  dissolution  and  needed  only  the  delivery  to  give  it 
effect.  Any  instrument  of  indebtedness  is  without  life 
until  it  has  been  delivered  to  the  obligee  or  to  some  third 
person  for  his  benefit. 

§  110.  Power  of  ex-partners  in  respect  to  paper  barred 
by  statute  of  limitations.  — Although  it  is  sometimes  held 
that  an  ex-partner  can  by  his  promise,  acknowledgment  or 
part-payment,  in  the  name  of  the  firm,  remove  the  bar  of 
the  statute  of  limitations  from  a  firm  note  or  bill;  ^  yet  the 
better  opinion  is  that  the  ex-partner  has  no  power  after 
dissolution,  by  a  promise,  an  acknowledgment  or  part- 
payment, to  take  a  bill  or  note  of  the  firm  out  of  the  statute 
of  limitations,  so  as  to  revive  the  other  partner's  liabilit3^^ 

1  Woodford  w.  Donvia,  8  Vt.  82;  Gale  v.  Miller,  54  N.  Y.  536  (in  this 
case  the  paper  was  a  check) .  The  same  position  is  assumed  in  respect 
to  an  indorsement  made  before  dissolution,  with  delivery  of  the  paper 
after  dissolution.  Abel  v.  Sutton,  3  Esp,  108;  Glasscock  v.  Smith,  2'> 
Ala.  474.  But  see,  apparently  coji^ra.  Usher  v.  Dauncey,  4  Camp.  97; 
Lewis  V.  Reilly,  1  Q.  B.  347. 

2  Mclntire  v.  Oliver,  2  Hawks  (N.  C),  209;  Whitcomb  v.  Whiting, 
Dougl.  G52. 

3  Bell  V.  Morrison,  1  Pet.  351;  Exeter  Bank  ».  Sullivan,  6  N.  H.  124; 
Van  Kenren  v.  Parmelee,  2  Comst,  523;  Levy  v.  Cadet,  17  Serg.  &  R.  126; 
Belote  V.  Wynne,  7  Yerg.  534. 

180 


L/ 


CHAPTER     YII. 

PRIVATE  CORPORATIONS,  AS  PARTIES  TO  COMMERCIAL  PAPER. 

Section  114.  Corporations,  private  and  public. 

115.  Power  of  private  corporations  to  issue  commercial  paper. 

116.  ^OHrt^de  holders  of  papers  issued  ultra  vires  —  Accommo- 

dation paper. 

117.  Commercial  paper  of  corporation  under  seal. 

118.  Power  of  corporations  to  be  payees  and  indorsees. 

119.  Power  of  corporations  to  appoint  agents  to  execute  their 

commercial  paper. 

120.  Implied  powers  of  the  bank  cashier. 

121.  Implied  powers  of  the  president. 

122.  Implied  powers  of  other  officers. 

123.  Form  of  signature  by  the  agents  of  corporations. 

124.  Form  of  signature,  continued. 

125.  Form  of  acceptance  by  agent  of  corporation. 

126.  Form  of  indorsement  by  agent  of  corporation. 

127.  Exceptions  as  to  cashiers  of  banks. 

128.  Drafts  or  warrants  of  one  corporate  officer  upon  another. 

§  114.  Corporations,  private  and  public.  — All  corpora- 
tions are  divisible  into  two  essentially  different  classes, 
viz.  :  private  and  public.  Private  corporations  are  all  those 
which  are  instituted  for  the  prosecution  of  some  private  in- 
terest or  business,  and  verbose  capital,  franchises,  and  other 
proprietary  rights  are  owned  by,  and  managed  for  the  ben- 
efit of,  private  individuals.  Corporations  are  called  public 
or  municipal  when  "  the  whole  interests  and  franchises  are 
the  exclusive  property  and  domain  of  the  government 
itself,"  ^  and  they  are  instituted  to  secure  some  benefit  to 
the  public,  usually  the  establishment  of  an  effective  local 
government.     Cities,  towns,  villages,  counties,townships  or 

1  Darmouth  College  v.  Woodward,  4   Wheat.  636 

181 


§     11.")  PRIVATE    CORPORATIONS    AS    PARTIES.  [CII.  VII. 

parishes,  tire  various  kinds  of  public  corjiorations  :  while  rail- 
•roads,  turnpike  roads,  canals,  and  bridge  companies,  banks, 
all  associations  for  the  prosecution  of  trade,  mining  and 
manufacturing,  and  every  other  corporation,  the  object  of 
whose  creation  is  private  gain  or  benefit,  are  private  cor- 
porations. The  character  and  powers  of  these  two  classes 
of  corporations  are  so  vitally  different  that  they  must  be 
considered  separately  in  respect  to  their  power  to  become 
parties  to  commercial  paper,  and  private  corporations  will 
be  considered  first. 

§  115.  Power  of  private  corporations  to  issue  commer- 
cial paper.  —  It  is  needless  to  state  formally  that  private 
corporations  have  the  power  to  execute  bills,  notes,  and 
other  commercial  paper,  when  that  power  is  expressly 
given  to  them  in  their  charters,  or  by  the  general  laws  of 
the  State,  under  which  they  were  incorporated.  Nor  is  it 
necessary  to  state  that  they  have  not  the  power,  when 
they  are  expressly  prohibited  from  exercising  the  powder. ^ 
There  is  room  for  doubt  and  uncertainty  only  in  respect  to 
the  extent  to  which  the  pow.er  to  issue  commercial  paper 
can  be  inferred  or  implied  from  the  character,  and  the  ex- 
press powers,  of  the  corporation.  According  to  the  English 
authorities,  the  power  will  only  be  implied,  when  the  cor- 
poration cannot  without  it  carry  on  its  business,  or  attain 
the  end   for  which  it  was  created;   and  it  cannot  be   im- 


1  But  it  has  been  held  that  a  law,  forbidding  certain  corporations 
from  issuing  commercial  paper  as  a  circulating  medium,  or  from 
dealing  in  commercial  paper,  will  not  be  construed  as  prohibiting 
such  corporations  from  issuing  and  receiving  such  commercial  paper  m 
the  course  of  their  ordinary  business:  Blair  v.  Perpetual  Ins.  Co.,  10 
Mo.  oGl;  Buckley  v.  Briggs,  30  Mo.  452;  Western  Cottage  Organ  Co.  v. 
Reddish,  51  Iowa,  55;  Smith  v.  Eureka  Flour  Mills  Co.,  6  Cal,  1;  Atty.- 
Gen.  V.  Life  &  Fire  Ins.  Co.,  9  Paige,  470;  Partridge  v.  Badger,  25  Barb. 
146;  White's  Bank  v.  Toledo,  etc  ,  Ins.  Co.,  12  Ohio  St.  601 ;  Mumford  v. 
Am.  L.  Ins.  Co.,  4  N.  Y.  463;  Potter??.  Bank  of  Ithaca,  7  Hill,  .530. 

182 


CH.  VII.]  PAHTIES    TO    COMMERCIAL    PAPER.  §     115 

plied  from  the  power  to  contract  debts,  since  the  power  to 
issue  commercial  or  negotiable  paper,  involves  something 
more  than  the  contraction  of  a  debt,  viz. :  the  imposition 
upon  the  corporation  of  the  liability  to  innocent  indorsees 
for  debts  which  the  corporation  is  not  authorized  to  con- 
tract. The  two  powers  are  held  to  be  essentially  distinct 
and  separate.^ 

Not  only  has  it  been  held  in  England  that  railroad  com- 
panies have  not  the  implied  power  to  issue  commercial 
paper  in  the  course  of  their  ordinary  business  ;  ^  but  the  im- 
plied power  has  also  been  denied  to  a  waterworks  company,^ 

.  1  In  Bateman  v.  Mid-Wales  Ry  Co.,  L.  R.  1  C.  P.  499,  509,512,  Erie,  C. 
J.,  said:  "  The  question  is  whether  this  company,  being  a  corporation 
created  for  the  specific  purpose  of  making  a  railway,  can  lawfully  bind 
itself  by  accepting  a  bill  of  exchange.  I  am  of  opinion  that  it  cannot. 
The  bill  of  exchange  is  a  cause  of  action,  a  contract  by  itself,  which  binds 
the  acceptor  in  the  hands  of  any  indorsee  for  value ;  and  I  conceive  it 
would  be  altogether  contrary  to  the  principles  of  law  which  regulate 
such  instruments  that  they  should  be  valid  or  not,  according  as  the  con- 
sideration between  the  original  parties  was  good  or  bad,  or  whether,  in 
case  of  a  corporation,  the  consideration  in  respect  of  which  the  accept- 
ance is  given  is  sufficiently  connected  with  the  purpose  for  which  the 
acceptors  were  incorporated.  It  would  be  inconvenient  to  the  last 
degree  if  such  an  inquiry  could  be  gone  into.  Some  bills  might  be  given 
for  a  consideration  which  was  valid,  as  for  work  done  for  the  company, 
and  others  as  a  security  for  money  obtained  on  loan  beyond  their  bor- 
rowing powers.  It  would  be  a  pernicious  thing  to  hold  that  in  respec!; 
of  the  former  the  corporation  might  be  sued  by  an  indorsee,  but  in  re- 
spect of  the  latter  not."  Montague  Smith,  J.,  said:  "  I  am  clearly  of 
opinion  that  it  was  not  within  the  competency  of  this  company  to  accept 
bills.  It  is  a  company  incorporated  for  the  formation  of  a  railway, 
with  a  limited  capital  and  limited  powers  of  borrowing  money.  If 
such  a  company  had  power  to  accept  bills  of  exchange,  the  consequence 
would  be  either  that  they  miglit  bind  themselves  by  acceptances  to  an  un- 
limited amount,  or  there  must  in  each  case  be  an  inquiiy  whether  the 
bill  was  given  for  tlie  payment  of  a  just  debt,  or  for  a  purpose  not  war- 
ranted by  their  incorporation." 

2  Bateman  v.  Mid- Wales  Ry.  Co.,  L.  R.  1  C.  P.  499.  But  see  Peruvian 
E.  R.  V.  Thames,  etc.,  Ins.  Co.,  L.  R.  2  Ch.  617. 

3  Neale  v,  Turton,  4  Bing.  149;  Brougliton  v.  Manchester,  etc.,  Water- 
works, 3  B.  &  Aid.  1. 

183 


§     115  PRIVATE    CORPORATIONS    AS    PARTIES.  [CH,   VII. 

to  mining  companies,^  to  a  salvage  company,'^  a  gas  com- 
pany^ and  to  a  cemetery  company.*  And,  according  to 
the  English  rule,  only  trading  corporations,  like  a  bank  or 
the  East  India  Company,  have  the  implied  power  to  issue 
commercial  jiaper.*'' 

But  while  the  distinction  thus  made  by  the  English 
courts  may  be  technically  sound,  here  the  reason  for  it  is 
outweighed  by  the  consideration  that  a  large  part  of  the 
trade,  manufacturing  and  mining  of  the  country  is  con- 
ducted by  corporations,  and  "that  therefore  it  would  be 
embarrassing  and  harassing  to  creditors  to  recognize  this  dis- 
tinction. Accordingly,  the  broad  rulers  laid  down  by  the 
courts  in  the  United  States,  that  whenever  a  corporation  can 
contract  a  debt  for  a  certain  object,  it  may  cast  the  indebt- 
edness into  the  form  of  commercial  paper,  and  give  its 
negotiable  note,  or  accept  a  bill  of  exchange,  for  the 
amount.  It  is  thus  the  American  rule  that  all  corporations 
can  become  liable  as  parties  to  commercial  paper,  who  can 
contract  debts. ^     For  example,  the  implied  power  to  issue 


1  Lickinsou  v.  Valpy,  10  B.  &  C.  128;  Brown  v.  Byers,  16  M.  &  W.  252; 
Bult  V.  Morrell,  12  A.  &  E.  745. 

2  Thompson  v.  Universal  Salvage  Co.,  1  Exch.  694. 

3  Bramah  v.  Roberts,  3  Biug.  N.  C.  963. 

*  Steele  v.  Harmer,  14  M.  &  W.  831  (4  Exch.  1). 

s  "  When  a  company  like  the  Bank  of  England,  or  the  East  India  Com- 
pany, is  incorporated  for  the  purposes  of  trade,  it  seems  to  result  from 
the  very  object  of  their  being  so  incorporated  that  they  should  have 
power  to  accept  bills  or  issue  promissory  notes."  Best,  J.,inBroughton 
V.  Manchester,  etc..  Waterworks,  3  B.  &  Aid.  1. 

^  "  No  question  is  t  "jtter  settled  upon  authority  than  that  a  corpoi'a- 
tion,  not  prohibited  by  law  from  doing  so,  and  without  express  power 
In  its  charter  for  that  purpose,  may  make  a  negotiable  promissory  note 
payable  either  at  a  future  day  or  on  demand,  when  such  note  is  given 
for  any  of  the  legitimate  purposes  for  which  the  company  was  incorpo- 
rated." Willard,  J.,  in  Moss  v.  Averill,  10  N.  Y.  410,  457.  "  A  corpora- 
tion, in  order  to  attain  its  legitimate  objects,  may  deal  precisely  as  an 
individual  may  who  seeks  to  accomplish  the  same  ends.  If  chartered 
for  the  purpose  of  building  a  bridge,  it  may  contract  a  debt  for  labor, 
184 


CH.  VII.]  PARTIES    TO    COMMERCIAL    PAPER.  §     115 

commercial  paper  has  been  conceded  to  railroad  companies,^ 
to  mining  companies,^  a  building  fund  association,^  a  plank 
road  company,*  all  sorts  of  manufacturing  companies;  ^  to 
a  mercantile  exchange,  or  a  religious  organization,  in  buy- 

the  materials,  or  the  laud  upon  which  the  bridge  is  abutted.  If  more 
advantageous,  it  may  borrow  mouey  to  purchase  sucli  land  or  materials, 
or  to  pay  for  such  labor;  and  as  the  evidence  of  the  indebtedness,  it  may 
execute  to  the  ci'editors  a  note,  a  bond,  or  a  mortgage,  whether  the  debt 
be  for  the  money  borrowed,  or  the  work,  material  or  lands."  Sandford, 
V.  C,  in  Barry  v.  Merchants'  Exchange  Co.,  1  Sand  Ch.  280.  "  When  a 
corporation  can  lawfviUy  purchase  property,  or  procure  money  on  loan  in 
the  course  of  its  business;  the  seller  or  lender  may  exact,  and  the  pur- 
chaser or  borrower  must  have  the  power  to  give,  any  known  assurance 
which  does  not  fall  within  the  prohibition,  express  or  implied,  of  some 
statute."  Comstock,  J.,  in  Curtis  v.  Leavitt,  15  N.  Y.  66.  See  also,  to 
same  effect,  Barkers.  Mechanics'  Ins.  Co.,  3  Wend.  94;  Rockwell  v. 
Elkhorn  Bank,  13  Wis.  653;  Barnes  v.  Ontario  Bank,  19  N.  Y.  152;  Munn 
V.  Commission  Co.,  15  Johns,  ii;  Millard  v.  St,  Francis,  etc..  Academy, 
8  Bradw.  341;  Ward  v.  Johnson,  95  111.  215,  238;  Moss  v.  Oaklee,  2  Hill, 
265;  Safford  V.  Wyckoff,  4  Hill,  442;  Moss  v.  Rossie  Lead  Mining  Co.,  5 
Hill,  137;  Hamilton  v.  Newcastle,  etc.,  R.  R.  Co.,  9  Ind.  359;  Straus  v. 
Eagle  Ins.  Co.,  5  Ohio  st.  59;  Clarke  v.  School  District,  3  R.  I.  199; 
Lucas  V.  Pitney,  3  Dutch.  221;  Olcott  v.  Tioga  R.  R.  Co.,  40  Barb.  179 
(27  N.  Y.  546)  ;  Mechanics'  Banking  Ass'n  v.  N.  Y.  etc..  White  Lead  Co., 
35  N.  Y.  505;  Eay  v.  Noble,  12  Cush.  1  ;  Monument  Nat.  Bk.  v.  Globe 
Works,  101  Mas5.  57;  Smith  v.  Eureka  Flour  Mills  Co.,  6  Cal.  I;  Magee  v. 
Mokelumne  Hill  Canal,  etc.,  Co.,  5  Cal.  258;  Oxford  Iron  Co.  v.  Spradley, 
46  Ala.  98;  Richmond,  etc.,R.  R.  Co.  v.  Snead,  19  Gratt.  354;  Union  Bank 
V.  Jacobs,  6  Humph.  515. 

>■  Railroad  Co.  v,  Howard,  7  Wall.  412;  Oicott  v.  Tioga  R.  R.  Co.,  27 
N.  Y.  546  (40  Barb.  179);  Lucas  v.  Pitney,  27  N.  J.  L.  221;  Richmond, 
etc.,  R.  R,  Co.  V.  Snead,  19  Gratt.  354;  Hamilton  u.  Newcastle  R.  R.  Co.,  9 
Ind.  359;  Union  Bank  v.  Jacobs,  6  Humph,  515. 

2  Moss  V.  Bossie  Lead  Mining  Co.,  5  Hill,  137;  Moss  v.  Averill,  10  N. 
Y.  457;  Mahoney  Mining  Co.  v.  Anglo-Cal.  Bank,  104  U.  S.  192. 

^  Davis  V.  West  Saratoga  B.  Union,  32  Md.  285. 

<  Smith  V.  Law,  21  N.  Y.  2d6. 

5  A  flouring  mill.  Smith  v.  Eureka  Flour  Mills  Co.,  6  Cal.  1;  glass 
factory.  Molt.  v.  Hicks,  1  Cow.  513;  Clark  v.  Farmers',  etc.,  Manuf.  Co., 
15  Wend.  256;  Mechanics'  Bank  Assn.  v.  N.  Y.,etc.,  White  Lead  Co.,  35 
N.  Y.  505;  Monument  Nat.  Bk.  v.  Globe  Works,  101  Mass.  57;  Oxforu 
Iron  Co.  V.  Spradley,  46  Ala.  98. 

185 


§     116  PRIVATE    CORPORATIONS    AS    PARTIES.         [cil.  VII. 

iug  lands  tmd  erecting  buildings  ;  ^  to  the  trustees  of  a  society 
formed  for  the  purpose  of  erecting  a  monument  ;'^  and,  as 
a  matter  of  course,  to  all  mercantile  corporations.^  But  it 
has  been  held  in  Mississippi,  that  an  insurance  conipany 
cannot  contract  debts  or  borrow  money,  and  consequently 
cannot  make  a  negotiable  note  or  draw  or  accept  a  bill  of 
exchange.* 

§  IIG.  Bona  fide  holders  of  paper  issued  ultra  vires  — 
Accommodation  paper. — As  between  the  original  parties 
to  the  paper,  a  corporation  can  defend  in  a  suit  on  its  com- 
mercial paper,  by  pleading  that  its  issue  Avas  an  act  idt7'a 
vires.  But  when  the  paper  passes  into  the  hands  of  an  in- 
nocent indorsee  for  value,  the  common  rule  of  nejrotiable 
paper  applies,  that  the  indorsee  takes  the  paper  free  from 
the  equitable  defenses  that  taint  the  character  of  the  paper 
while  it  is  in  the  hands  of  the  original  payee.®     And  even 

1  Barry  u.  Merchants'  Exchange  Co.,  1  Sand.  Ch.  280;  Davis  v.  Pro- 
prietors' Meeting  House,  8  Met.  321. 

2  Hayward  v.  Pilgrim  Society,  31  Pick.  270. 

3  Munn  ».  Commission  Co.,  15  Johns.  44;  Fay  v.  Noble,  12  Gush.  1; 
Ketchum  v.  City  of  Buffalo,  4  Kern.  35G;  Commercial  Bank  v.  Newport 
Man.  Co.,  1  B.  Mon.  13;  Clark  v.  Farmers'  Woolen  Man.  Co.,  15  Wend. 
256. 

*  Bacon  v.  Miss.  Ins.  Co.,  31  IMiss.  116. 

*  ''  The  negotiable  security  of  a  corporation,  which  on  its  face  ap- 
peal's to  have  been  duly  issued  by  such  corporation,  and  in  conformity 
with  the  provisions  of  its  charter,  is  valid  in  the  hands  of  a,  bona  fide 
holder  tliereof,  without  notice,  although  sucli  security  was  in  fact  issued 
for  a  purpose,  and  at  a  place  not  authorized  by  the  charter  of  the  cor- 
poration, and  in  violation  of  the  laws  of  the  State  where  it  was  actually 
issued."  Walworth,  Ch.,  in  Stouey  v.  Am.  Life  Ins.  Co.,  11  Paige,  635. 
To  the  same  effect,  see  Safford  v.  Wyckoff,  4  Hill,  442;  Bank  of  Genesee 
V.  Patchiu  Bank,  13  N.  Y.  309;  Barker  v.  Mechanics'  Ins.  Co.,  3  Wend. 
94;  National  Bank  v.  Wells,  79  N.  Y.  498;  Supervisors  v.  Schenck,  5 
Wall.  784;  Bis  v.  Daggett,  97  Mass.  494;  Monument  Nat.  Bank  v.  Globe 
Works,  101  Mass.  57;  Mitchell  v.  Home  R.  R.  Co.,  17  Ga.  574;  Madison, 
etc.,  11.  K.  Co.  V.  Norwick  Sav.  Society,  24  lud.  457;  Hart  v.  Mo.,  etc., 
F.  &  M.  Ins.  Co.,  21  Mo.  91:  Hall  v  Auburn  Turupike  Co.^  27  Cal.  255. 

186 


CH.  VII.]  PARTIES    TO    COMMERCIAL    PAPER.  §     11*> 

where  a  corporation  has  the  authority  to  issue  notes  and 
bills  only  on  certain  express  conditions,  and  issues  them  in 
violation  of  the  inferential  prohibition,  i.e.,  independently' 
of  the  conditions,  the  paper  will  not  be  void  in  the  hands 
of  innocent  indorsees  for  value,  unless  the  legislature  has 
so  expressly  declared  them  to  be  void.^  But  when  a 
corporation  has  the  power,  express  or  implied,  under  any 
or  certain  circumstances,  to  issue  commercial  paper  in  the 
course  of  its  regular  business,  it  will  be  presumed  in  the 
absence  of  express  proof  to  the  contrary,  that  a  note  or  bill 
of  such  a  corporation  was  issued  in  conformity  with,  and 
within  the  limitation  of,  its  powers.^ 

Unless  a  corporation  is  expressly  authorized  to  become 
a  party  to  accommodation  paper,  it  has  not  the  power  to 
bind  itself  by  its  issue,  for  accommodation  paper  can  not 
be  considered  to  be  issued  in  the  course  of  the  reo-ular 
business  of  the  corporation,  unless  the  corporation  has  been 
expressly  authorized,  and  has  been  expressly  created, 
to  do  that  kind  of  business.^  But  if  the  accommodation 
has  been  so  issued  by  the  officers  of  the  corporation  that  an 
indorsee  for  value  could  take  it  without  notice  of  its  objec- 
tionable character,  such  indorsee  may, hold  the  corporation 

^  Zabriskie  v.  Cleveland,  etc.,  R.  R.  Co.,  23  How.  381;  Webb  v. 
Comrs.  Home  Bay,  L.  R.  5  Q.  B.  642.  See  Tracy  v.  Talmage,  14  N.  Y. 
162.  So,  likewise,  bonds  issued  by  a  corporation  in  excess  of  the  amount 
authorized,  are  nevertheless  binding  upon  the  corporation  in  the  hands 
of  innocent  purchasers.    Ellsworth  v.  St.  Louis  R.  R.  Co  ,  98  N.  Y.  553. 

2  Supervisors  v.  Schenck,  5  Wall.  784;  Barker  v.  Mechanics'  Ins.  Co., 
3  Wend.  94;  Mitchell  v.  Rome  R,  R.  Co.,  17  Ga.  574  ;  Hart  v.  Mo.,  etc., 
F.  &  M.  Ins.  Co.,  21  Mo.  91;  Lafayette  Bank  v.  St.  Louis  Stoneware  Co., 
2  Mo.  App.  294. 

3  West  St.  Louis  Sav.  Bank  v.  Shawnee  County  Bank,  95  U.  S.  557; 
Monument  Nat.  Bank  v.  Globe  Works,  101  Mass.  57;  ^tna  Nat.  Bank  v. 
Charter  Oak  Ins.  Co.,  50  Conn.  167;  Bank  of  Genesee  v.  Patchin  Bank, 
13  N.  Y.  309;  Morford  v.  Farmers'  Bank,  26  Barb.  568;  Culver  v.  Reno 
Real  Estate  Co.,  91  Pa.  St.  367;  Savage  Mfg.  Co.  v.  Worthington,  1  Gill, 
284;  Beecher  w.  Dacey,  45  Mich.  92, 

187 


§     117  PRIVATE    CORPORATIONS    AS    PARTIES.  [CH.   VII. 

liable.^  The  same  rule  applies  to  corporations  becoming 
guarantors  or  sureties  for  another.  Unless  expressly 
authorized,  their  guaranties  are  ultra  vires ^  and  therefore 
illegal  acts.'^ 

§  117.   Commercial  paper  of  corporations  under  seal. 

The  general  rule  of  the  law  of  commercial  paper  is  that 
it  must  not  be  scaled,  in  order  to  be  negotiable.'  But 
according  to  the  early  common-law  rule,  a  corporation 
could  not  make  a  lawful  binding  contract,  except  under  its 
corporate  seal;  and,  therefore,  any  promissory  note  or 
bill  of  exchange  issued  by  a  corporation  had  to  be  impressed 
with  the  corporate  seal.  Following  the  general  rule  that 
the  seal  destroyed  the  negotiability  of  the  instrument,  it 
was  formerly  held  that  any  contract  under  the  corporate 
seal  must  at  common  law  be  declared  on  as  a  bond  or 
contract  under  seal.*  But  it  is  now  very  generally  held, 
first,  that  a  corporation  may  make  any  contract  or  execute 
any  legal  instrument,  without  using  its  corporate  seal,  in 
all   cases  in  which  this   may  be  done  by  natural  persons;  ^ 

*  Bird  V,  Daggett,  97  Mass.  494;  MonumeutNat.  Baaku.  Globe  Works, 
101  Mass.  57;  Bank  of  Genesee  u.  Patclilu  Bank,  13  N.  Y.  309;  19  N.  Y. 
312;  Morford  v.  Farmers'  Bank,  2G  Barb.  568;  Bridgeport  City  Bank  v. 
Empire  Stone  Dressing  Co.,  30  Barb.  421 ;  National  Bank  v.  Wells,  79  N. 
Y.  498;  Madison,  etc.,  R.  R,  Co.  v.  Norwich  Sav.  Society,  24  lud.  457; 
Hallu.  Auburn  Turnpike  Co.,  27  Cal.  255 

2  Madison,  etc.,  Plank  Road  Co.  v.  Watertown,  etc.,  Plank  Road  Co.,  7 
Wis.  59;  Arnot  v.  Erie  R.  R.  Co.,  12  N.  Y.  S.  C.  (5  Hun)  608;  Madison, 
R.  R.,  etc.  V.  Norwich  Sav.  Society,  24  lud.  457. 

3  See  ante,  §  32. 

*  Porter  v.  Androscoggin,  etc.,  R.  R.  Co.,  37  Me.  349;  Clark  ■».  Far- 
mers', etc.,  Mfg.  Co.,  15  Wend.  256;  Benoist  v.  Carondelet,  8  Mo.  250. 

5  Bank  of  Columbian.  Patterson,  7  Cranch,  29'J;  Fleckner  v.  Bk.  of 
U.  S.,  8  Wheat.  338;  Bank  of  United  States w.  Dandridge,  12  Wheat.  64; 
Buckley  u.  Briggs,  30  Mo.  452;  McCuUough  i;.  Talledega  Ins.  Co.,  46 
Ala.  376;  Trustees  of  University  v.  Moody,  62  Ala.  389;  Whitford  v. 
Laidler,  94  N.  Y.  145;  Baptist  Church  v.  Miilford,  3  Halst.  L.  185;  Chris- 
tian Church  w.  Johnson,  53  Ind.  273;  Sheffield  School  Township  r.  Au- 
188 


CH.  VII. J  PARTIES    TO    COMMERCIAL    PAPER.  §     118 

and,  secondly,  that  if  the  seal  is  used  by  a  corporation  in 
the  execution  of  what  would  otherwise  be  a  negotiable  in- 
strument, the  use  of  the  seal  will  not  destroy  the  negotia- 
able  character  of  the  paper. ^ 

§  118.  Power  of  corporations  to  be  payees  and  in- 
dorsees. —  If  there  is  a  lawful  debt  due  to  any  corporation, 
it  may  be  liquidated  by  a  note  or  bill,  in  which  the  corpo- 
ration is  made  the  payee  or  indorsee.  In  other  words,  a 
corporation  has  the  implied  power  to  take  a  note  or  bill  for 
any  debt  due  it.^  But  no  corporation  has  the  power  to 
make  a  business  of  lending  money,  and  taking  the  borrow- 
er's note  or  bill  for  it,  unless  this  power  is  expressly  given 
to  the  corporation  in  its  charter  or  by  the  general  laws 
under  which  the  association  was  incorporated.^ 

dress,  56  Ind.  157;  Town  of  New  Athens  v.  Thomas,  82  111.  259;  Merrick 
V.  Burlington,  etc..  Plank  Road  Co.,  11  Iowa,  75. 

1  Moran  v.  Miami  Cor.,  2  Black,  722 ;  White  «.  Vermont,  etc.,  R.  R.  Co., 
21  How.  675;  Mercer  County  v.  Ilackett,  I  Wall.  95;  Murray  «.  Lardner, 
2  Wall.  110;  Clark  v.  Iowa  City,  20  Wall  583;  Haven  v.  Grand  Junction 
R.  R.,  etc.,  Co.,  109  Mass.  88;  Re  Land  Credit  Co.  of  Ireland,  L.  R.  4  Ch. 
460;  Re  General  Estate,  Co.,  L.  R.  3  Ch.  758;  Winfield  v.  Hudson,  28  N.  J. 
L.  255;  Brainerd  v.  N.  Y.,  etc.,  R.  R.  Co.,  25  N.Y.  49G;  Morris  Canal, 
etc.,  Co.  V.  Fisher,  9  N.J.  Eq.  699;  Morris  Canal,  etc.,  Co.  v.  Lewis,  12 
N.  J.  Eq.  323;  Nat.  Exch.  Bank  v.  Hartford,  etc.,  R.  R.  Co.,  8  R.  I.  375; 
Miller  V.  Rutland,  etc.,  R.  R.  Co.,  40  Vt.  399;  Beaver  County  v.  Armstrong, 
44  Pa.  St.  63;  Bunting's;  Admrs.  v.  Camden,  etc.,R.R.  Co,  81  Pa.  St.  284; 
Mason  v.  Frick,  105  Pa.  St.  162;  Phila.,  etc.,  R.R.  Co.  v.  Smith,  105  Pa. 
St.  195;  Phila.,  etc.,  R.  R.  Co.  v.  Fidelity  Co.,  105  Pa.,  St.  216;  Barrett 
V.  Schuyler  Co.  Court,  44  Mo.  197;  Smith  v.  Clark  County,  54  Mo.  58. 

2  Lucas  r.  Pilney,  27  N.  J.  L.  221;  Hardy  v.  Merriweather,  14  Ind.  203; 
Mclntire  v.  Preston,  10  111.  48;  Frye  v.  Tucker,  24  111.  180;  Buckley  w. 
Briggs,  30  Mo.  452. 

3  Waddill  V.  Alabama  R.  R.  Co.,  35  Ala.  323;  Grand  Lodge  of  Free- 
masous  v.  Waddill,  36  Ala.  313.  In  Madison,  etc.,  Plank  Road  Co.  v. 
Watertown  Plank  Road  Co.,  7  Wis.  59,  it  was  held  that  a  plank  road  com- 
pany has  not  the  power  to  lend  money  generally,  but  that  it  may  advance 
money  to  a  contractor  with  which  to  build  a  section  of  the  road.  It  is 
presumably  not  intended,  by  these  decisions,  to  maintain  that  a  corpora- 
tion, having  funds  for  a  beneficial   object,  for  example,  like  the  Grand 

189 


§     118  PRIVATE    CORPORATIONS    AS    PARTIES.  [CH.  VII. 

But  whenever  a  corponitiou  exceeds  its  powers  in  taking 
commercial  paper  as  payee  or  indorsee,  the  parties  liable  on 
the  paper  cannot  take  advantage  of  that  fact  as  a  defense  to 
the  action  on  the  paper  b)^  the  corporation ;  for,  having  made 
the  paper  payable  to  the  corporation,  and  received  its  funds 
as  a  consideration  therefor,  the  maker,  drawer,  acceptor  or 
indorser,  as  the  case  might  be,  is  estopped  from  denying  the 
capacity  of  the  corporation  to  take  the  paper. ^ 

In  the  same  manner,  any  one  sued  upon  a  negotiable  in- 
strument by  a  corporation  cannot  plead  the  illegality  of  the 
incorporation,  not  even  a  corporator.^  The  stockholders 
of  the  corporation  and  the  State  are  alone  empowered  to 
take  exception  to  the  exercise  of  this  unauthorized  power. 
What  their  remedies  are  and  under  what  circumstances  the 
remedies  may  be  resorted  to,  need  not  be  discussed  in  this 
connection. 

It  follows,  as  a  necessary  consequence,  that  if  a  corpora- 
tion has  the  power  to  receive  commercial  paper  as  a  payee 
or  indorsee,  it  will  have  the  power  to  assign  such  paper  by 
indorsement;  for,  according  to  the  law  of  commercial 
paper,  paper  made  payable  to  order  can  only  be  assigned 
by  indorsement.^ 

Lodge  of  Freemasons,  cannot  without  express  authority  make  invest- 
ments in  the  slaape  of  loans,  in  order  to  earn  interest,  with  which  to 
meet  the  demands  upon  them  for  pecuniary  aid.  It  is  only  intended  to 
indicate  that  any  and  every  corporation  cannot  go  into  the  business  of  dis- 
counting commercial  paper.  See,  to  the  same  effect,  N.  Y.  Fireman's  Ins. 
Co.   V.  Ely,  2  Cow.  6G4;  Philadelphia  Loan  Co.  v.  Towner,  13  Conn.  249. 

1  See  Farmers'  &  M.  Banli  v.  Needles,  52  Mo.  17;  Nat.  Ins.  Co.  v.  Bow- 
man, GO  Mo.  252;  City  of  St.  Louis  v.  Shields,  02  Mo.  247;  Stoutimore  v. 
Clark,  70  Mo.  477;  John  r.  Farmers'  Bank,  2  Blackf.  307;  Snyder  v.  Stude- 
baker,  19  Ind.  462;  Vater  v.  Lewis,  36  Ind.  291 ;  Ray  v.  Indianapolis  Ins. 
Co.,  39  Ind.  290;  Greiner  v.  Ulery,  20  Iowa,  266;  Massey  v.  Building  As- 
sociation, 22  Kan.  634. 

2  FarmingtouS.  B.  r.  Fall,  71  Me.  49;  Nat.  Pemberton  Bank  v.  Porter, 
125  Mass.  333;  McCullough  v.  Moss,  5  Deuio,  57.".;  Poock  v.  Lafayette 
Building  Association,  71  Ind.  357. 

3  Planter's  Bank  V.  Sharp,  6  IIow.   301;  Bank  of   Genesee  v.  Patchin 

190 


CH.  Vir.]  PARTIES    TO    COMMERCIAL    PAPER.  §     119 

§  119.  Power  of  corporations  to  appoint  agents  to 
execute  tbeir  commercial  paper.  —  A  corporation  can  only 
act  through  its  agents,  and  therefore  the  power  to  appoint 
agents  is  necessarily  implied.  If  there  is  nothing  in  the 
charter,  or  in  the  general  laws  of  the  State,  restraining  this 
implied  power  of  the  corporation,  its  power  is  unlimited, 
and  it  may  appoint  any  number  and  kind  of  agents.  But 
if  there  be  a  restriction  imposed  upon  the  power,  as  where 
the  charter  or  the  general  laws  of  the  State  expressly  require 
that  certain  corporate  acts  should  be  done  only  by  certain 
agents,  the  corporation  cannot  authorize  any  other  agent 
to  act  for  it  in  those  cases.  For  example,  where  a  bank 
charter  provided  that  its  commercial  paper  should  be  signed 
by  the  president  and  countersigned  by  the  cashier,  the 
corporation  would  not  be  bound  by  a  bill  or  note,  signed 
by  the  vice-president  and  assistant  cashier,  although  these 
officers  were  authorized  by  the  board  of  directors  to  sign 
for  the  bank.^ 

Ordinarily,  the  actual  administration  of  the  business  of 
corporations  is  reposed  in  a  board  of  directors,  and  the 
charter  and  general  laws  contain  no  other  restrictions  upon 
the  action  of  the  corporation  in  the  appointment  of  agents. 
It  is  very  generally  held  that,  in  such  cases,  the  power  to 
bind  the  corporation  rests  in  the  board  of  directors,  but 
that  they  have  the  implied  power  to  appoint  all  the  agents 
that  the  business  of  the  corporation  may  require,  to  whom 
the  power  to  bind  the  corporation,  originally  vested  in  the 
board  of  directors,  may  be  delegated.     But,  as  a  general 

Bauk,  13  N.  Y.  309;  Marviuer.  Hymers,  12  N.  Y.  223;  Mclutyrct'.  Preston, 
5  Gil.  48;  Hardy  v.  Merriweather,  14  lud.  203;  Cooper  v.  Curtis,  30  Me. 
4S8;  Savage  r.  Walshe,  2(5  Ala.  619.  From  the  power  to  borro'tV  money, 
may  be  implied  the  power  ?o  borrow  a  bill  or  note,  and  to  indorse  the 
same  for  negotiation.  Lucas  w.  Pitney,  27  N.  J.  L.  221;  Holbrooke. 
Bassett,  5  Bosw.  147;  Turniss  v.  Gilchrist,  1  Sand.  53. 

'  Planters',  etc.^  Bank  v.  Irwin,  31  Ga.  877,  See  also  McCullough  v. 
Moss,  5  Den.  575;  Lucas  v.  San  Francisco,  7  Cal.  469. 

191 


§    120  PRIVATK    CORPORATIONS    AS    PARTIES.  [ciI.  VII. 

proposition,  no  agent,  appointed  by  a  board  of  directors, 
will  have  the  power  to  bind  the  corporation  by  a  note  or 
bill  issued  in  the  corporate  name,  unless  the  authority  is  ex- 
pressly granted  to  the  agent, ^  or  it  is  implied  from  the 
appointment  of  an  officer  who  by  general  custom  and  usage 
has  such  a  power  delegated  to  him. 

§  120.  Implied  powers  of  the  bank  cashier. — For  ex- 
ample, the  cashier  of  a  bank  has  the  general  power  to  bind 
the  bank  by  his  official  signature  to  commercial  paper. 
Not  only  has  he  the  power  to  transfer  by  indorsement  the 
negotiable  paper,  belonging  to  the  bank,  for  collection  ;  ^ 
but  he  also  can  indorse  such  paper  for  other  purposes,  i.e., 
pass  title  to  such  paper  for  a  proper  consideration.^  But 
he  is  held  to  have  no  implied  power  to  transfer  the  non- 
negotiable  paper  of  the  bank,  unless  it  is  proved  to  have 
become  an  established  usage  for  the  cashier  to  make  such  a 
transfer.* 

He  has  the  implied  power  to  borrow  money  for  the  bank, 
and  to  give  the  bank's  note  for  it;  ^  or  to  accept  a  bill  in 
the   bank's  name;  ^  and  to  certify  checks  drawn  upon  the 

'  McCullough  V.  Moss,  5Deu.  575;  Odd  Fellows  v.  First  Nat.  Bank, 
42  Mich.  4G3;  Preston  v.  Mo.,  etc.,  Lead  Co.,  31  Mo.  45;  Cattronu.  First 
Universalist  Society,  46  loTva,  lOfi. 

2  Hartford  Bank  v.  Barry,  17  Mass.  94;  Potter  u.  Merchants'  Bank,  28 
N.  Y.  G41 ;  Elliott  v.  Abbott,  12  N.  H.  549;  Corser  v.  Paul,  41  N.  II.  24. 

3  Fleckner  v.  U.  S.  Bank,  8  Wheat.  357;  West  St.  Louis,  etc.,  Bank  v. 
Shawnee,  etc.,  Bank,  95  U.  S.  558;  Cooper  v.  Curtis,  30  Me.  488;  Farrar 
V.  Oilman,  19  Me  440;  City  Bank  v.  Perkins,  29  N.  Y.  554;  Bi.ssell  v.  First 
Nat.  Bank,  69  Pa.  St.  415;  Kimball  v.  Cleveland,  4  Mich.  606;  Everett  v. 
United  States,  6  Port.  (Ala.)  166;  "Wild  v.  Passamaquoddy  Bank,  3 
Mason,  505;  Lafayette  Bank  v.  State  Bank,  4  McLean,  208;  Harper  i;. 
Calhoun,  7  IIow.  (Miss.)  203;  State  Bank  v.  Whe#ler,  21  Ind.  90. 

*  Barrick  v.  Austin,  21  Barb.  241 ;  Holt  v.  Bacon,  25  Miss.  567. 

^  State  Bank  v.  Kain,  1  Brcese,  45.  * 

6  Barnes  v.  Ontario  Bank,  19  N.  Y.  152;  Ridgway  v.  Farmers'  Bank,  12 
Serg.  &  R.  256;   Sturgis  v.  Bank  of  Circleville,  11  Ohio  St.  153;  Ballstou 
Spa  Bank  v.  Marine  Bank,  16  Wis.  120.     But  see  Farmers',  etc.,  Bank  v. 
Troy  City  Bank,  1  Dougl.  (Mich.)  457. 
192 


CH.  VII.]  PARTIES    TO    COMMERCIAL    PAPER.  §     120 

bank.i  jjg  .^i^q  j^.^^  i\^q  implied  uuthority  to  buy  and  sell 
notes  and  bills  for  the  bank/ and  to  draw  bills  and  checks 
on  the  funds  of  the  bank  deposited  elsewhere.^ 

But,  in  order  to  bind  the  bank  by  his  issue  of  commercial 
paper  in  its  name,  it  must  be  done  in  the  course  of  the  bank's 
regular  business.  He  cannot  bind  the  bank  as  a  party  to 
accommodation  paper;  and  such  paper  can  only  be  en- 
forced against  the  bank  by  a  subsequent  indorsee  for 
value  and  without  notice  of  its  objectionable  character.* 

So,  also,  has  the  cashier  no  implied  power  to  release  any 
one  liable  to  the  bank  on  commercial  paper  or  on  any  other 
indebtedness.  The  power  to  do  so  is  primarily  reposed  in 
the  board  of  directors.  But  if  a  cashier  should  say  to  the 
surety  or  to  any  one  else  secondarily  liable  on  the  paper, 
that  the  indebtedness  has  been  liquidated  by  the  principal, 
these  parties  secondarily  liable  would  be  relieved  of  their 
liability,  under  the  doctrine  of  estoppel.  The  bank  is 
estopped  from  denying  the  truth  of  the  cashier's  state- 
ments.* 

But  the  implied  powers  of  the  cashier  do  not  always  in- 
here to  the  office  of  assistant  cashier.  Thus  it  has  been 
held  that  the  assistant  cashier  has  not  the  implied  power 

1  Merchauts'  Banik  v.  State  Bank,  10  "Wall.  604;  Farmers',  etc.,  Bauk 
V.  Butchers',  etc.,  Bank,  16  N.  Y.  125;  Mead  v.  Merchants'  Sank,  25  N. 
Y.  143;  Clarke  National  Bank  v.  Bank  of  Albion,  52  Barb.  592;  Barnes 
77.  Ontario  Bk.,  19  N.  Y.  152;  Cooke  v.  State  Nat.  Bank  of  Boston,  52 
N.  Y.  96.  But  see  Mussey  v.  Eagle  Bank,  9  Met.  306;  Morse  on  Banking, 
199,  et  seq.     See  also  post,  § 

2  Pendleton  v.  Bauk  of  Kentucky,  1  T.  B.  Mon.  179. 

3  See  Morse  on  Banks  and  Banking,  164;  Mechanics'  Bank  v.  Bank  of 
Columbians  Wheat.  326;  United  States  u.  City  Bauk  of  Columbus,  21 
HoTT.  356;  Merchants'  Bank  v.  Central  Bank,  1  Kelly,  418. 

*  West  St.  Louis,  etc.,  Bank  v.  Shawnee,  etc..  Bank,  95  U.  S.  558; 
Lafayette  Bank  v.  State  Bank,  4  McLean,  208;  Farmers',  etc.,  Bauk  u. 
Troy  City  Bauk,  1  Dougl.  (Mich.)  457. 

5  Cocheco  Nat.  Bank  v  Haskell,  51  N.  II.  110;  Merchants'  Bank  u. 
Rudolf,  5  Neb.  527. 

13  193 


§  121      PRIVATE  CORPORATIONS  AS  PARTIES.    [CH.  VII. 

to  accept  bills  or  to  certify  checks/'  Nor  does  oue, 
v.ho  temporarily  fills  the  office  of  cashier,  in  his  absence, 
acquire  all  the  implied  powers  of  the  cashier.  In  the 
absence  of  instructions  from  the  board  of  directors,  the 
substitute  can  only  perform  the  ordinary  and  routine  duties 
of  the  cashier,  such  as  the  payment  of  checks,  receipt  of 
payment  upon  notes  and  bills  held  by  the  bank,  and  the 
surrender  of  such  paper  when  paid.'^ 

§  121.  Implied  powers  of  the  president. — The  presi- 
dent of  a  corporation  is  its  principal  executive  officer,  and 
in  almost  every  case  he  represents  the  corporation.  He, 
therefore,  has  the  implied  power  to  institute  suits  in  the 
courts  in  the  name  of  the  corporation.^  And,  although  it 
is  claimed  by  a  high  authority,*  that  by  virtue  of  his  office 
the  president  of  a  bank  has  not  the  power  to  draw  against 
the  bank's  funds,  yet  it  is  held  in  Tennessee  that  he  might 
legally  draw  checks  or  bills  of  exchange  on  the  funds  of  the 
bank,  in  the  absence  of  the  cashier;  and  he  certainly  can 
do  so,  if  it  was  the  ofeneral  usas^e  of  the  bank.^ 

The  president  of  a  bank  has  the  power  to  receipt  for  de- 
posits,® and,  probably,  also,  to  transfer,  in  the  course  of  its 

1  Pope  V.  Bank  of  Albion,  57  N.  Y.  12G. 

2  Morse  ou  Banking,  1G7;  Potter  v.  Merchants  Bk.,  28  N.  Y.  G41. 

3  Alexandria  Canal  Co.  v.  Swann,  5  How.  83;  Mumford  v.  Hawkins, 
5  Den.  355;  Am.  Ins.  Co.  v.  Oakley,  9  Paige,  496;  Hodge's  Exrs.  v.  First 
Nat.  Bank,  21  Gratt,  59;  Savings  Bank  v.  Benton,  2  Met.  (Ky.)  240.  But 
see  Aslmelot  Mfg.  Co.  v.  Marsh,  1  Cush.  507,  in  which  it  was  held  that 
the  president  of  a  manufacturing  corporation  has  not  the  implied  power 
to  bring  suit  i  in  the  name  of  the  corporation. 

*  Morse  on  Banking,  140. 

5  Neiffer  v.  Bank  of  Knoxville,  1  Head,  162.  See  Fulton  Bank  v.  N.  Y. 
and  Sharon  Canal  Co.,  4  Paige,  127. 

6  Sterlings.  Marietta,  etc.,  Trading  Co.,  11  Serg.  &  R.  170.  See  also 
Terrell  v.  Branch  Bank,  12  Ala.  502.  But  if  in  doing  so,  the  president 
agrees  to  pay  a  larger  percentage  of  interest  (Fulton  Bank  v.  N.  Y.  & 
Sharon  Canal  Co.,  4  Pa*!ge,  127),  or  to  charge  the  bank  with  any  larger 
liability  (Fo.ster  v.  Essex  Bank,  17  Mass.  479),   than  what  is    usually 

"  194 


€H.  VII.]  PARTIES    TO    COMMERCIAL    PAPER.  §    121 

ordinary  business,  the  bills  and  notes  Iield  by  the  bank.^ 
But  it  is  settled,  beyond  all  controversy,  that  neither  the 
president  nor  the  cashier  of  a  bank  has  any  implied  power 
to  release  any  liability  due  to  the  bank.  This  power  is 
vested  in  the  board  of  directors.^ 

As  a  general  proposition,  it  maybe  stated  that  the  presi- 
dent of  a  corporation  is  not  empowered  to  bind  the  cor- 
poration by  his  signature  to  commercial  paper,  unless  the 
authority  is  expressly  given  to  him  by  the  board  of  directors, 
or  his  exercise  of  the  power  is  continued  unquestioned  and 
unrestrained  long  enough  to  estop  the  corporation  from  de- 
nying his  authority  to  sign  for  it.^  And  if  it  be  the  custom 
of  the  corporation  to  permit  its  president  to  indorse  the 
negotiable  paper  paj'able  to  it,  he  will  have  the  implied 
authority  to  do  so  ;*  but  in  the  absence  of  such  a  custom,  an 
express  authority  would  be  needed  to  make  such  an  indorse- 
ment binding  upon  the  corporation.^ 

Where  a  president  and  cashier  of  a  corporation  are  au- 

given  in  the  coarse  of  its  regular  business,  he  exceeds  his  powers,  and 
the  bank  is  not  liable. 

1  See  Leavitt  v.  Connecticut  Peat  Co.,  6  Blatchf.  139;  Morse  on  Bank- 
'ng,  147;  Hoyt  v.  Thompson,  1  Seld.  3:X).  In  the  latter  case,  the  court 
say:  "In  Massachusetts,  it  has  been  held  that  neither  the  president  uor 
the  cashier  has  power  virtute  officii,  to  transfer  negotiable  funds,  with- 
out express  authority  from  the  directors.  This,  however,  must  be 
erroneous,  if  the  transfer  be  made  in  the  usual  course  of  business,  and 
bona  fide.  But  it  is  safe  to  say  that  when  the  sale,  assignment  or  trans- 
fer requires  the  use  of  the  corporate  seal,  it  cannot  be  made  without  the 
assent  and  authority  of  the  board." 

2  Bank  of  United  States  v.  Dunn,  6  Pet.  51;  Bank  of  Metropolis  v. 
Jones,  8  Pet.  12;  Cocheco  Nat.  Bk.  v.  Haskell,  51  N.  H.  IIG:  Olney  v. 
Chadsey,  7  R.  I.  225;  Iloyt  v.  Thompson,  1  Seld.  320;  Merchants'^Bk.  v. 
Marine  Bk.,  3  Gill,  96;  Hodges  v.  First  Nat.  Bk.,  22  Gratt.  59;  Mt.  Sterl- 
ing Turnpike  Co.  v.  Looney,  1  Met.  ;CKyO  550;  Spyker  v.  Spence,  8  Ala. 
333.     See  ante,  §  120. 

2  President  of  a  lead  mining  company;  McCuIlough  v.  Moss,  5  Den. 
575. 

*  Elwell  V.  Dodge,  33  Barb.  336  ; 

^  Marine  Bank  r.  Clements,  3  Bosw.  600. 

195 


§     123  PRIVATE    COKl'OUATIONS    AS    PARTIES.  [cil.   VII. 

thorized  to  borrow  money  on  the  notes  or  discounts  of  the 
corporation,  the  agency  is  a  joint  one,  and  the  transaction 
will  not  be  binding  upon  the  corporation  unless  the  two 
officers  named  act  jointly;  although  if  they  do  act  jointly 
and  concur  in  a  given  transaction,  the  signature  of  one  of 
them,  to  the  note  issued  by  and  with  the  consent  of  both, 
will  bind  the  corporation.^ 

§  122.  The  implied  powers  of  other  officers.  —  Any 
other  officer  of  a  corporation  may  be  expressly  authorized 
to  bind  it  by  his  signature  to  commercial  paper.  And  so, 
also,  any  such  officer,  such  as  secretary,  treasurer,  or 
general  agent,  may  acquire  such  authority  by  implication 
from  his  more  or  less  extended  exercise  of  the  power  with- 
out question;  but  except  they  be  authorized  in  these  two 
ways  to  so  represent  the  corporation,  their  signature  will 
impose  no  obligation  on  the  corporation.^ 

§  123.  Form  of  signature  by  the  agents  of  corpora- 
tion.—  In  determining  the  proper  signature  to  negotiable 
paper  by  an  agent  of  a  corporation,  the  ordinary  law  of 
agency  applies,  so  that  a  proper  signature  would  be  in  the 
name  of  the  corporation,  followed  by  the  name  of  the  agent 
who  acts  for  it  and  in  its  name.  The  further  requirement 
would  be  made  that  the  body  of  the  instrument  should  run 
in  the  name  of  the  corporation,  where  it  is  a  promissory 
note,  as,  for  example,  "  The  A.  B.  Company  promise  to 
pay,"  etc.,  signed  "A.  B.  Company,  by  C.  D.,  President, 
Secretary,  Cashier  or  Treasurer,"  etc.,  as  the  case  may  be. 
A    paper,  executed  witii  this    formality,  is'  unquestionably 

1  Morse  on  Banking,  148;  Ridgway  v.  Farmers'  Bank,  12  Serg.  &  R. 
256. 

2  First  Nat.  Bank  v.  Hogan,  47  Mo.  472;  N.  Y.  Iron  Mine  v.  First  Nat. 
Bank,  39  Mich.  644;  Torrey  v.  Dustia  Monument  Assn.,  5  Allen,  327; 
Partridge  u.  Badger,  25  Barb.;  Blood  v.  Mavense,  38  Cal.  590. 

19() 


CH.  VII.]  PARTIES    TO    COMMERCIAL    PAPER.  §     1^3 

an  obligation  of  the  corporation  and  not  a  personal  obliga- 
tion of  the  official  who  signs  the  paper.  But  it  very  fre- 
quently happens  that  this  formality  in  execution  is  not 
observed,  and  that  it  is  difficult,  if  at  all  possible,  to  .deter- 
mine whether  the  paper  was  intended  to  be  a  corporate  or 
a  personal  obligation. 

As  between  the  original  parties  to  the  contract,  it  can  al- 
ways in  the  case  of  an  undisclosed  agency  be  shown  who  the 
real  principal  is;  and  suit  may  then  be  brought  against 
him,  instead  of  against  the  agent,  who  appears  on  the  face 
of  the  instrument  to  be  the  principal.  And  this  is  true 
of  agencies  for  corporations,  as  well  as  of  other  agencies, 
although  the  paper  should  have  on  its  face  very  slight  in- 
dications of  being  a  corporate  obligation.  If  there  is  suffi- 
cient appearing  on  the  face  to  make  it  doubtful  whether  it 
was  intended  as  a  personal  or  as  a  corporate  obligation, 
parol  evidence  is  admissible  to    show  its  true  character.^ 

1  *  It  is  enough  for  the  purposes  of  the  defendant  to  establish  that 
there  existed,  on  the  face  of  the  paper,  circumstances  from  which  it 
might  reasonably  be  inferred  that  it  was  either  one  or  the  other.  In  that 
case  it  became  indispensable  to  resort  to  extrinsic  evidence,  to  remove 
the  doubt.  The  evidence  resorted  to  for  this  purpose  was  the  most 
obvious  and  reasonable  possible,  namely:  that  this  was  the  appropriate 
form  of  an  official  check;  that  it  was,  in  fact,  cut  out  of  the  official  check 
book  of  the  bank,  and  noted  on  the  margin;  that  the  money  was  drawn  in 
behalf  of  and  applied  to  the  use  of  the  Mechanics'  Bank;  and  by  all  the 
banks,  and  all  the  officers  of  the  banks  through  which  it  passed,  recog- 
nized as  an  official  transaction.  *  *  *  It  is  by  no  means  true,  as  was 
contended  in  argument,  that  the  acts  of  agents  derive  their  validity  from 
professing,  on  the  face  of  them,  to  have  been  done  in  the  exercise  of  their 
agency.  In  the  more  solemn  exercise  of  derivative  powers  as  applied  to 
the  execution  of  instruments  known  to  the  common  law,  rules  of  form 
have  been  prescribed.  But  in  the  diversified  exercise  of  the  duties  of  a 
general  agent,  the  liability  of  the  principal  depends  upon  the  facts,  first, 
that  the  act  was  done  in  the  exercise,  and  second,  within  the  limits, of 
the  powers  delegated.  These  facts  are  necessarily  iuquirabl  e  into  by  a 
court  and  jury;  and  this  inquiry  is  not  confined  to  writte:i  instruments 
(to  which  alone  the  principle  contended  for  could  apply) ,  but  to  any  act 
with  or  without  writing,  within  the  scope  of  the  power  or  confidence  re- 

197 


§  123      PRIVATE  CORPORATIONS  AS  PARTIES.    [CH.  VII. 

And  where  there  is  no  indication  whatever  on  the  face  of 
the  paper  that  it  was  intended  to  be  a  corporate  .obligation, 
parol  evidence  is,  still  admissible  to  show  who  the  real  prin- 
cipal is,  and  to  hold  hini  liable,  instead  of  the  agent  and 
supposed  principal,  if  the  obligee  so  elects.  But  if  the 
obligee  prefers  to  look  to  the  party  who  is  in  fact  an  agent, 
but  appears  on  the  face  of  the  paper  to  be  the  principal, 
parol  evidence  is  not  admissible  in  order  to  shift  the  liability 
to  the  real  principal,  the  corporation  for  which  he  was  act- 
ing, and  to  relieve  him.  The  obligee  or  payee  may  hold 
the  agent  liable  in  such  a  case,  if  he  so  determines.*     In 

posed  in  the  agent."  Mechanics'  Bli.  of  Alexandria  v.  Bk.  of  Columbia, 
5.  "Wheat.  337.    In  this  leading  case,  the  bill  of  exchange  was  as  follows :  — 

Mechanics'  Bank  of  Alkxandria,  1 
No.  18.  June  25,  1817.  / 

Cashier  of  the  Bank  of  Columbia: 

Pay  to  the  order  of  P.  H.  Minor,  Esq.,  ten  thousand  dollars. 
$10,000  Wm.  Patton,  Juu. 

See  also,  to  same  effect,  Hager  v.  Rice,  4  Col.  9-t,  in  which  the  bill  was 
drawn  by  a  corporation  with  direction  that  it  be  charged  to  its  account, 
and  signed  by  "Win.  Anderson,  President,"  drawn  on  and  accepted  by 
"T.  D. Hager,  Treasurer;"  McClellan  v.  Reynolds,  49.  Mo.  314,  in  which 
the  note  sued  on  was  "I  promise  to  pay,"  etc.,  "for  building  a  school 
house  in  school  district,"  etc.,  signed  "  P.  T.  Reynolds,  Local  Director;" 
Richmond,  P.  &  F.  R.  R.  Co.  v.  Snead,  19  Gratt.  354,  where  a  due-bill  was 
given  "  in  full  of  labor  performed  on  cottage  lot  of  the  R.  R.  Co,"  signed 
by  "Ed.  Robinson;"  Devendorf  v.  W.  Va.  0.  &  O.  L.  Co.,  17  W.  Va.  172, 
in  which  action  was  brought  against  the  W.  Va.  Oil  and  Oil  Land  Com- 
pany, on  a  draft,  signed  "  charge  to  the  account  of  B.  S.  Compton,  Pres." 
Parol  evidence  was  admitted  to  show  that  this  was  the  customary  method 
for  the  officers  to  draw  on  the  funds  of  the  corporation.  See  also  Ilaile 
V.  Peirce,  32  Md.  327;  Pratt  v.  Beaupie,  13  Minn.  190. 

1  Hypes  V.  Griffin,  89  111.  135.  In  this  case,  the  note  ran  "  We,  the 
trustees,"  etc.,  and  was  signed  by  the  individuals  without  any  descrip- 
tion of  official  character.  The  court,  per  Scott,  J.,  said:  "The  makers 
of  this  note  chose  to  bind  themselves  individually,  uudcf  their  hands 
and  seals,  without  the  use  of  any  apt  words  in  the  agreement  to  bind 
the  corporation  of  which  they  were  trustees.  Had  it  been  the  intention 
to  charge  the  corporation  exclusively,  we  must  understand  the  agreement 
would  have  been  expressed  in  the  writing  to  that  effect  at  the  time. 

"  Were  this  an  action  against  the  corporation,  on  an  agreement  in  the 

108 


CH.  VH.l  PARTIES    TO    COMMERCIAL   PAPER.  §    123 

determining  what  amount  of  evidence  is  required  to  appear 
on  the  face  of  the  instrument  to  make  it  a  corporate  obliga- 
tion, instead  of  the  personal  obligation  of  the  individuals 
who  execute  it,  great  diversity  of  opinion  will  be  found  in 
the  cases,  and  it  is  useless  to  attempt  to  reconcile  them. 
On  identical,  or  at  least  similar,  facts,  the  courts  have 
rendered  contradictory  decisions,  and  it  is  only  possible  for 
the  writer  to  state  what  has  been  decided,  and  refer  the 
reader  to  the  conflictinoj  authorities. 

It  does  not  often  happen  that  a  negotiable  instrument  is 
executed  by  the  agent  of  a  corporation  in  the  careful  man- 
ner indicated  above ;  there  is  more  or  less  variation  from 
that  form  in  almost  every  case. 

It  has  been  held,  perhaps  unanimously,  that  if  the  in- 
strument runs  in  the  name  of  the  corporation,  and  signed 
by  the  officer,  who  is  authorized  to -act  for  the  corporation, 
by  merely  affixing  his  official  title  to  his  name,  it  is  a  good 
execution  of  a  corporate  obligation.^     It  is  also  a  good  cor- 

individual  names  of  the  trustees,  a  very  different  question  would  be  pre- 
sented, and  many  of  the  authorities  cited  would  be  in  point.  Some  of 
the  cases  do  hold  the  well  understood  doctrine,  although  the  agent  may 
have  contracted  in  his  own  name,  nevertheless,  it  is  competent  to  show 
by  parol  the  real  facts,  and  that  the  contract  was  made  on  behalf  of  the 
principal,  who  may  also  be  charged.  In  such  a  case,  parol  evidence  is 
admissible  to  show  as  against  the  indorsee,  in  what  character  and  at 
what  time  one  signed  his  name  on  the  back  of  the  paper,  who  was  not 
a  payee  or  indoi'see  and  therefore  could  not  be  an  indorser.  See  also 
ante,  chapter  on  Transfer  by  Indorsement. 

1  For  example,  "The  Newport  Manufacturing  Company  promises," 
etc.,  and  signed  "  J.  W.  T.,  treasurer."  See  Commercial  Bank  u.  New- 
port Mfg.  Co.,  1  B.  Mon.  13;  Shotwell  u.  McKown,  2  South.  828;  Hall 
V.  Auburn  Turnpike  Co.,  27Cal.  255;  Moor  v.  Wilson,  26  N.  H.  332;  Hall 
».  Crandall,  29  Cal.  5G7;  McGreary  v.  Chandler,  58  Me.  537;  Shaver  ??. 
Ocean  Mining  Co.,  21  Cal.  46;  Hopkins  u.  Mchafey,  11  Serg.  &  R.  126; 
Ellis  V.  Pulsifer,  4  Allen,  165;  Walker  v.  Wait,  50  Vt.  668.  In  the  fol- 
lowing cases,  it  was  stated  for  what  corporation  the  signer  was  acting 
as  agent:  Jefts  v.  York,  4  Cush.  371;  s.  c.  10  Cush.  392;  Dubois  u.  Del. 
&H.  C.  Co.,  4  Wend.  285;  Armstrong  v.  Kirkpatrick,  79  lud.  527;  John- 
son School  Township  v.  Citizen's  Bank,  81  Ind.  515. 

199 


§   123  ruiVATi:  ( ouroKATioxs  as  partiks.        [rii.  vn. 

porate  liability,  if  the  instrument  is  executed  in  the  name 
of  the  corporation  by  its  agent,  although  the  name  of  the 
corporation  should  not  appear  in  the  body  of  the  instru- 
ment.^ But  where  the  name  of  the  corporation  does  not 
appear  either  in  the  body  of  the  instrument  or  in  the  signa- 
ture, and  the  only  evidence  on  the  face  of  the  instrument, 
that  the  person  signing  does  not  intend  to  bind  himself  per- 
sonally, is  the  affix  to  his  signature  of  some  designation  of 
agency,  as  where  he  signsy  A.,  treasurer,  president,  or 
agent,  without  stating  for  whom  or  for  what  company  he  is 
acting;  the  authorities  are  unanimous  that  the  instrument 
creates  a  personal  liability  upon  the  person  whose  name 
appears  on  the  paper.  The  very  circumstance  that  the 
paper  does  not  disclose  even  the  name  of  the  principal, 
makes  it  impossible  to  treat  the  instrument  as  a  corporate 
liability,  for  in  such  a* case  parol  evidence  would  be  re- 
quired to  show  who  the  principal  was.^ 


1  As  for  example,  "We  (or  I)  promise  to  pay,"  signed  "For  the 
Provideuce  Hat  Mfg.  Co.,  by  F.  R. ;"  Emerson  v.  Providence  Mfg. 
Co.,  12  Mass.  237;  RufBu  v.  Mebane,  6  Ired.  Eq.  507;  Aiken  v.  Marine 
Bank,  16  Wis.  713;  Atkins  r.  Brown,  59  Me.  90;  Castle  v.  Belfast  Foun- 
dry Co.,  72  Me.  1G7;  Draper  v.  Mass.  Steam  Heating  Co.,  5  Allen,  338; 
V.'alkcr  v.  Bk.  of  State  of  N.  Y.,  9  N.  Y.  582;  Sanders  v.  Anderson,  21 
Mo.  402;  Cookr.  Sanford,  3  Dana,  237;  May  v.  Hewitt,  33  Ala.  IGl;  Roney 
r.  Winter,  37  Ala  277;  Gillet  v.  New  Market  Sav.  Bank,  7  Bradw.  499; 
Pitman  v.  Kintner,  5  Blackf .  250. 

2  Witte  V.  Derby,  2  Conn.  2G0;  Pease  v.  Pease,  35  Conn.  131;  Duvall 
r.  Craig,  2  Wheat.  50;  Towne  v.  Rice,  122  Mass.  67;  Chemung  Canal 
Bank  V.  Supervisors,  5  Dcmio,  517;  Bank  v.  Cook,  38  Ohio  St.  442;  Jor- 
dan V.  Trice,  6  Yerg.  479;  Tpustees  of  Cahokia  v.  Rautenberg,  88  111.  219; 
Thackeray  v.  Hanson,  1  Col.  3G5.  But  where  the  note  reads,  "  We,  a.s 
trustees,  but  not  individually,  promise,"  etc.,  without  stating  for  whom 
the  signers  are  trustees,  it  has  been  held  that  the  qualifying  words  used 
in  the  body  of  the  note  are  sufficient  to  prevent  the  attachment  of  any 
individual  liability:  Shoe,  etc.,  Nat.  Bk.  v.  Dix,  123  Mass.  148.  To  such 
an  extreme  has  this  rule  been  carried,  that  it  has  been  held  to  be  no  ma- 
terial alteration  of  a  negotiable  instrument  to  cut  off  the  words  "presi- 
dent," "treasurer,"  and  the  like,  from  the  signature.  Tliackeravv. 
Hanson,  1  Col.  3G5. 

200 


CH.  VII.]  PARTIES    TO    COMMERCIAL    PAPER.  §    123 

Doubtful  ground  is  reached  in  the  dicussion  when  the 
question  is  raised,  whether  there.is  a  corporate  or  individual 
liability  created  on  a  note  or  bill,  where  the  person  signing 
describes  himself  as  being  the  agent  or  representative  of  a 
given  corporation,  but  there  are  no  words  used,  expressly 
making  the  instrument  the  obligation  of  the  corporation. 
Especially,  where  the  descriptio  personce  appears  in  the 
body  of  the  instrument,  as  where  a  note  reads,  ""We, 
directors  of  the  A.  B.  Company,"  etc.,  the  weight  of 
authority  is  decidedly  in  favor  of  holding  the  paper  to  bind 
the  signers  individuall}^,  instead  of  the  corporation,  whose 
directors  they  are.  It  is  held  that  the  words  connecting 
the  name  of  the  corporation  with  the  signers  were  merely 
descriptive  of  the  personal  identity  of  those  whose  names 
are  signed  to  the  paper. ^  And  the  same  rule  is  followed, 
where  the  official  title  and  the  name  of  the  corporation  are 
affixed  to  the  signature,  for  example,  **  A.  B.,  President  of 
Henderson  Loan  Co."  ^ 


1  Fogg  V.  Virgin,  19  Me.  352;  Packard  v.  Nye,  2  Met.  47;  Barker  w. 
Meclianics'  Ins.  Co.,  3  Weud.  94;  Chick  v.  Trevett,  20  Me.  4G2;  Seaver 
V.  Colburn,  10  Cush,  324;  Dulton  v.  Marsh,  L.  R.  6  Q.  B.  3G1;  Underliill 
V.  Gibson,  2  N.  H.  352;  Bingham  v.  Stewart,  13  Minn.  106;  Hypes  w. 
Griffin,  89  111.  134;  Powers  v.  Briggs,  79  111.  493.  But  see  New  Market 
Sav.  Bankv.  Gillett,  100  111.  254. 

2  Burbank  v.  Posey,  7  Biisli,  873;  Moss  v.  Livingston,  4  N.  Y.  208; 
McClellan  v.  Robe,  93  lud.  298;  Williams  v.  Second  Nat.  Bank,  83  Ind.. 
237;  Drake  v.  Flewelleu,  33  Ala.  106;  Haight  v.  Naylor,  5  Daly,  219; 
Chamberlain?;.  Pacific  Wool,  etc.,  Co.,  54  Cal.  103;  Heatou  v.  Myers,  4 
Col.  627;  Barkers.  Mechanics'  Ins.  Co.,  3  Wend.  94;  Sheridan  r.  Car- 
penter, 61  Me.  107;  Smith  v.  Alexander,  31  Mo.  193;  Mellen  v.  Moore, 
68  Me.  390;  Bruce  v.  Lord,  I  Hilt.  247;  Scott  v.  Baker,  3  W.  Va.  285; 
Brockway  v.  Allen,  17  Wend.  40;  Fiske  v.  Eldridge,  12  Gray,  474;  Fow- 
ler V.  Atkinson,  6  Minn.  578;  Hayes  v.  Matthews,  63  Ind.  412;  Hayes  v. 
Brubacker,  65  Ind.  27;  Conner  v.  Clark,  12  Cal.  168;  Hays  v.  Crutcher, 
54  lud.  260;  Pratt  v.  Beaupre,  13  Minn.  187;  Rew  v.  Petet,  1  Ad.  &  El. 
196;  Tilden  v.  Barnard,  43  Mich.  376;  Courtauld  v.  Saunders,  16  L.  T. 
(n.  s.)  562.  But  see,  contra,  Hovey  v.  Magill,  2  Coun.  680;  Gaff  v.  Theis, 
33  Ind.  307  ;  Schaefer  v.  Bidwell,  9  Nev.  209;  Laflin  Powder  Co.  v.  Sius- 

201 


§  12\  PRIVATE  COUrOUATIOXS  AS  PARTIES.    [f'll.  VII, 

If  it  were  to  any  extent  the  custom  of  persons  to  furnish 
the  means  of  identification  of  themselves  by  stating  in 
their  commercial  obligations  -what  their  occupation  or  em- 
ployment is,  then  the  reason  given  by  the  majority  of 
the  courts  for  holding  that  the  affix  of  an  official  designa- 
tion is  a  mere  descrlptio personcCi  and  not  an  indication  that 
the  party  signing  was  acting  in  his  official  capacity,  is  a 
good  one,  and  no  objection  could  reasonably  be  made  with 
it.  But  this  is  by  no  means  a  custom,  certainly  not  in  the 
United  States;  and  the  appearance  in  a  signature  of  a  man's 
official  title, with  the  name  of  the  corporation  in  whose  em- 
ploy he  is,  leaves  upon  the  popular  mind  the  impression 
that  the  signer  did  not  intend  to  bind  himself  personally.^ 
But  the  weight  of  authority  is  certainly  against  this  posi- 
tion. "With  the  few  exceptions  mentioned  in  the  last  note, 
the  courts  hold  that  "  in  order  to  exempt  an  agent  from 
lia})ility  upon  an  instrument  executed  by  him  within  the 
scope  of  his  agency,  he  must  not  only  name  his  principal, 
but  he  must  express  by  some  form  of  words  that  the  writing 
is  the  act  of  the  principal,  though  done  by  the  hand  of  the 
agent.  If  he  expresses  this,  the  principal  is  bound  and 
the  aixent  is  not.  But  a  mere  description  of  the  general 
relation  or  office  which  the  person  signing  the  paper  holds 
to  another  person  or  to  a  corporation,  without  indicating 
that  the  particular  signature  is  made  in  the  execution  of  the 
office  and  agency,  is  not  sufficient  to  charge  the  principal 
or  to  exempt  the  agent  from  personal  liability."  ^ 

§  124.  Form  of  signature  by  agent  of  corporation, 
continued.  — But  while  it  is  a  very  general  requirement 
that  words  indicating  that  it  is  the  act  of  the  corporation 

heimer,  48  Md.  411;  Lazarus  v.  Shearer,  2  Ala.  718:   Kennedy  v.  Knight, 
21  Wis.  345;  Johnson  v.  Smith,  21  Conn.  G2G. 

1  1  Parsons'  N.  &  B,  1G8. 

-  Gray,  J.,  in  Tucker  Mfg.  Co,  v.  Fairbanks,  98  Mass.  101. 
1^02 


CH.  VII.]  PARTIES    TO    COMMERCIAL    TAPER.  §    124 

must  accompany  the  signature  and  official  designation, 
the  later  decisions  are  inclined  to  accept  as  sufficient  the 
slightest  representation  that  the  person  signing  is  acting 
for  the  corporation.  AVhere,  therefore,  in  the  body  of 
the  instrument,  or  affixed  to  the  signature,  the  name  of 
the  corporation  appears  preceded  by  the  words  "  for  the 
use  of,"  "in  behalf  of,"  "on  account  of,"  "by  order 
of,"  and  the  like,  this  is  very  generally  held  to  be  sufficient 
evidence  of  an  intention  to  create  a  corporate  obligation. 
Such  a  paper  is  generally  held  to  bind  the  corporation,  and 
not  the  individual.^     So,  also,  has  it  been  held  to  bind  the 

*  For  the  use  of,  Dow  v.  Moore,  47  N.  H.  419;  Pearse  v.  Wellborn,  42 
lud.  331;  Key  v.  Paruham,  6  Harr.  &  J.  418.  In  behalf  of,  Jefts  v.  York, 
4  Cush.  371;  s.  c.  10  Cusli.  392;  Harney  v.  Irvine,  11  Iowa,  82;  Haskell 
r.  Cornish,  13  Cal.  45;  Jones  v.  Clark,  42  Cal.  ISO;  Aggs  v.  Nicholson, 
1  H.  &  N.  1G5  (25  L.  J.  Ex.  348).  In  McHenry  v.  Duffield,  7  Blackf.  41, 
there  was  the  additional  statement  "for  work  done  on  the  N.  W.  Semin- 
ary." "  On  account  of,^^  Lindus  v.  Melrose,  3  H.  &  N.  177.  "By  order 
of,"  New  England  Ins.  Co.  v.  DeWolf,  8  Pick.  56  (1  Am.  Lead.  Cas. 
GOO).  "For,"  Emerson  D.  Providence  Hat  Mfg.  Co.,  12  Mass.  237.  In 
Bradlee  v.  Boston  Glass  Co.,  16  Pick.  347,  Shaw,  Ch.  J.,  said:  "The 
words  'for  the  Boston  Glass  Manufactory,'  if  they  stood  alone,  would 
perhaps  leave  it  doubtful  and  ambiguous  whether  they  meant  to  bind 
themselves  as  promisors  to  pay  the  debt  of  the  company,  or  whether 
they  meant  to  sign  a  contract  for  the  company,  by  which  they  should 
be  bound  to  pay  their  own  debt,  though  the  place  in  which  the 
words  are  introduced  would  seem  to  warrant  the  former  construc- 
tion. But  other  considerations  arise  from  other  views  of  the  whole 
tenor  of  the  note.  The  fact  is  of  importance  that  it  is  signed  by  three 
instead  of  one,  and  with  no  designation  or  name  of  office  indicating 
any  agency  or  conncctioa  with  the  company.  No  indication  appears  on 
the  note  itself  that  either  of  them  was  president,  treasurer  or  director, 
or  that  they  were  a  committee  toact  for  the  company.  But  the  words 
'  jointly  and  severally,'  are  quite  decisive.  The  persons  are  *  we  the 
subscribers,'  and  it  is  signed  Jonathan  Hunnewell,  Samuel  Gore  and 
Charles  F.  Kupfer.  This  woi'd  *  severally'  must  have  its  effect;  and  its 
legal  effect  was  to  bind  each  of  the  signers.  This  fises  the  undertaking 
as  a  personal  one.  It  would  be  a  forced  and  wholly  untenable  construc- 
tion to  hold  that  the  company  and  signers  were  all  bound;  this  would  be 
equally  inconsistent  with  the  terms  and  the  obvious  meaning  of  the  con- 
ti-act."  But  see,  contra.  Rice  v.  Gove;  22  Pick. 158. 

203 


§    124  TRIVATE    COUrOKATIONS    AS    PAUTIES.  [CH.  VII. 

corporation  where  the  agent  or  officer  signs  his  name  **  as 

treasurer  [or  other  officer]  for  the Company."  ^     But 

the  decisions  are  not  uniform  in  this  connection,  and  in  the 
note  below  will  be  found  cases,  which  contradict  the  rule 
set  forth  in  the  text,  and  hold  that  such  words  do  not  indi- 
cate the  intention  to  bind  the  corporation. ^     On  the  other 

1  Sanborn  v.  Neal,  4  Minn.  137;  Blanchard  v.  Kaull,  44  Cal.  448;  Bar- 
low V.  Congregational  Society,  8  Allen,  4G0;  Leach  v.  Blow,  8  Sm.  &  ^I. 
221;  Klosterman  v.  Loos,  58  Mo.  200;  Little  u.  Bailey,  87  111.  239;  Ran- 
dall V.  Snyder,  7  Lans.  IGS;  Yowell  v.  Dodd,  3  Bush,  581.  In  Shoe  & 
Leather  Nat.  Bank  r.  Doe,  123  Mass.  151,  the  words  were:  "  We,  as 
trustees  but  not  as  individuals,"  etc. 

^  In  behalf  of,  Pomeroy  v.  Slade,  16  Vt.  220;  Steele  v.  McElroy,  1 
Sneed,  341;  Kendalls.  Morton,  21  lud.  205;  Morrell  v.  Codding,  4  Allen, 
403.  By  order  o/,  Caphart  v.  Dodd,  3  Bush,  584.  "  As,"  Dennison  u. 
Austin,  15  Wis.  3G6;  Titus  V,  Kyle,  10  Ohio  St.  444;  Bayliss  t;.  Pear- 
son, 15  Iowa,  279;  Trask  v.  Roberts,  IB.  Mon.  201;  Rupert  v.  Madden,  1 
Chandl.  146;  Stone  r.  Wood.  7  Cow.  453;  Paice  v.  Walker,  L.  R.  5  Ex. 
173.  In  Gadd  v.  Houghton,  L.  R.  1  Exch.  357,  in  which  action  was 
brought  on  contract  for  sale  of  oranges,  "on  account  of  J.  M.  &  Co. » 
Valencia,"  the  case  of  Paice  v.  Walker  was  criticised  by  Lord  Justice 
James  as  follows:  "The  case  is  not,  in  my  opinion,  in  any  way  gov- 
erned by  Paice  v.  Walker ;  for  whatever  the  decision  was  in  that  case  upon 
the  words  '  as  agents,'  the  words  in  the  present  case  '  on  account  of,' 
are  not  at  all  ambiguous  and  it  would  be  impossible  to  make  them  words 
of  description.  The  ratio  decidendi  in  Paice  u.  Walker  was  that,  having 
regard  to  the  contract  and  all  the  circumstances  of  the  case,  the  words 
'  as  agents  '  must  be  considered  as  merely  describing  or  intimating  the 
fact  that  the  defendants  were  agents,  and  did  not  amount  to  a  statement 
that  they  were  making  a  bargain  '  on  account  of,'  another  person.  Those 
are  the  very  words  of  the  present  case.  When  a  man  says  that  he  is 
making  a  contract  •  on  account  of  '  some  one  else,  it  seems  to  me 
that  he  uses  the  very  strongest  terms  the  English  language  affords  to 
show  that  he  is  not  binding  himself,  but  is  binding  his  prinnipaL  As 
to  Paice  v.  Walker,  I  cannot  conceive  that  the  words  '  as  agents  '  can  be 
properly  understood  as  implying  merely  a  description.  The  word  '  as  ' 
seems  to  exclude  that  idea.  If  that  case  were  now  before  us,  I  should 
hold  tliat  the  words  '  as  agents  '  in  that  case  had  the  same  effect  as 
the  words  '  on  account  of  '  in  the  present  case,  and  that  the  decision  in 
that  case  ought  not  to  stand.  I  do  not  dissent  from  the  principle  that 
a  man  does  not  relieve  himself  from  liability  upon  a  contract  by  using 
words,  which  are  intended  to  be  merely  words  of   description,  but  I  do 

204 


en.  VII.]  PARTIES    TO    COMMERCIAL    PAPER.  §     l-4r 

hand,  if  a  note  should  read  "  we  jointly  and  severalhj 
promise,"  etc.,  it  will  be  generally  held  to  indicate  that 
the  promisors  expected  to  be  bound  as  individuals,  for  in 
no  other  character  could  they  severally/  promise  to  pay. 
Such  a  note  could  only  be  the  individual  note  of  the  per- 
son or  persons  who  signed  it.^  In  the  same  way,  it  has 
been  held  that  a  note  reading  "  we  or  either  of  us,"  etc., 
will  be  the  personal  note  of  the  parties  signing  unless  there 
are  other  circumstances  strong:  enoujjh  to  overcome  the 
presumption  thus  raised  of  its  being  a  personal  obligation. ^ 
So  the  words  "  in  solido  "  have  been  held  to  indicate  that 
the  note  was  an  individual  obliijution  of  those  who  sifrned."^ 
It  was  also  held  to  be  sufficient  evidence  of  the  creation 
of  a  corporate,  instead  of  an  individual,  obligation,  if  the 
agent  of  the  corporation,  in  executing  the  instrument,  uses 
the  corporate  seal,  and  designates  in  the  body  of  the  in- 
strument or  in  the  signature  his  official  relation  to  the  cor- 
poration; *  or  writes  the  instrument  upon  paper,  prepared 

uot  think  the  words  '  as  agents '  were  words  of  description."  In  Healey 
V.  Story,  3  Exch.  3,  the  note  was  in  form,  "  We  jointly  and  severally 
promise,"  etc.,  *  *  *  '<  for  and  on  behalf  of  the  Wesleyan  News- 
paper Association." 

i  Healey  v.  Story,  3  Exch.  3;  Trask  v.  Roberts,  1  B.  Mou.  201 ;  Savage 
V.  Rix,  9  N.  H.  263.  But  in  Rice  v.  Gove,  22  Pick.  158,  it  was  held  that  the 
signature  Fatton  &  Johnson  for  Ira  Gove,  "  so  clearly  manifests  the  pur- 
pose to  be  the  execution  of  a  contract  binding  solely  upon  the  defend- 
ant, that  if  either  is  to  be  rejected  as  surplusage  and  of  no  effect,  it 
should  be  the  words  '  jointly  and  severally.'" 

»  Titus  V.  Kyle,  10  Ohio  St.  Ui;  Whitney  v.  Sudduth,  4  Mete.  (Ky.) 
296.  In  first  case  the  note  also  contained  the  claiise  "as  directors," 
etc.  But  see  Harvey  u.  Irvine,  71  Iowa,  82,  where  it  was  held  that  the 
words  "  in  behalf  of,"  were  sufficient  to  rebut  the  presumption  arising 
from  the  use  of  the  expression  "we  or  either  of  us." 

3  Cooley  V.  Estebau,  26  La.  Ann.  515. 

*  Pitman  v.  Kintner,  5  Blackf.  250;  Means  w.  Swormstedt,  32  Ind. 
87;  Aggs  V.  Nicholson,  1  H.  &  N.  165  (,25  L.  J.  Ex.  348),  See  25  and 
26  Vict.,  ch.  89,  §  47;  Hood  u.  Hallenbeck,  7  Hun.  362.  But  see,  contra^ 
Dutton  V.  Marsh,  L.  R.  6  Q.  B.  363. 

205 


§     ll'4  PRIVATE    COKPOUATIONS    AS    PARTIES.  [CII.  VU. 

for  the  use  of  the  eorportition,  with  the  name  of  the  com- 
pany or  of  the  compuDy's  office  stamped  or  printed  on  its 
face.^ 

The  recital  of  a  consideration  moving  to  the  corporation 
has  great  weight  in  determining  who  is  tlie  principal  in  the 
transaction  ;  and  Avhe-n  it  is  coupled  with  an  official  descriptio 
personcB  in  the  body  of  the  instrument  or  in  the  signature, 
it  is  usually  held  to  indicate  that  it  is  the  paper  of  the  cor- 
poration.^ But  it  is  not  considered  to  be  very  strong  evi- 
dence of  the  intention  of  the  parties  to  bind  the  corporation  ; 
and  in  a  number  of  cases,  the  courts  have  been  led  to  hold 
that  the  instrument  is  the  personal  obligation  of  the  indi- 
vidual who  signs  it,  although  a  consideration  is  recited  as 
moving  to  the  corporation.^ 

In  drawing  a  bill  of  exchange,  it  is  also  quite  common 
for  the  agent  of  a    corporation  to    insert   into   the  bill  the 

clause  ''charge  to  the    account    of  the company," 

and  sign  his  own  name,  merely  adding  his  official  title;  and 
this  has  been  frequently  held  to  make  the  corporation  the 
drawer  of  the  bill.*     But  if  the   agent  does  not  affix  to  his 


1  Mechanics'  Bank  of  Alexandria  v.  Bank  of  Columbia,  5  Wheat.  320 ; 
Carpenter  w.Farnsworth,  lOG  Mass.  5C1;  Lacy  v.  Dubuque  Lumber  Co., 43 
lOTva,  510;  Hitchcock  V.  Buchanan,  105  U.  S.  41G;  Wetumpka,  etc.,  R.  R. 
Co.  V.  Bingham,  5  Ala.  G57.  See,  contra.  Price  v.  Taylor,  5  IL  &  N.  540; 
Sewell  V.  Derbyshire  Ry.  Co.,  9  C.  B.  811;  Fitch  v.  Lawton,  6  How. 
(Miss.)  371.  In  Cooley  v.  Esteban,  2G  La.  Ann.  515,  the  note  ran  "  We, 
the  undersigned,  bind  ourselves  to  pay  in  solido.''^ 

2  Chipman  v.  Foster,  119  Mass.  189;  Hortonv.  Gan-ison,  23  Barb.  17G; 
McIIenry  v.  Duffield  7  Blackf.  41;  Haskell  v.  Cornish,  13  Cal.  45; 
McClcllan  v.  Reynolds,  49  Mo.  313. 

3  Haverhill  Mut.  Ins.  Co.  v.  Newhall,  1  Allen,  130;  Clark  v.  Trevett, 
20  Me.  CG2;  Cleveland  v.  Stewart,  3  Ga.  283;  Wiley  v.  Shank,  4  Blackf. 
420;  Blakely  ??.  Bennecke,  59  Mo.  193  j  Anderson  v.    Pearce,  3G  Ark.  293. 

4  Olcott  V.  Tioga  R.  R.  Co.,  40 Barb.  179;  s.  c.  27  N.  Y.  54G;  Safford  v. 
WyckofE,  1  Hill,  11;  4  Hill  442;  Maher  v.  Overton,  9  La.  115,  Fullor  v. 
Hooper,  3  Gray,  334;  Sayre  v.  Nichols,  7  Cal.  535;  Gillig  w.  Lake  Bigler 
R.  R.  Co.,2Nev.  814;  Whitte  i?.  Derby  Fishing  Co.,  3  Conn. 435;  Slawsou 
V.  Loring,  5  Allen,  343.     See,  contra,  Tucker  v.  Fairbanks,  98  Mass.  101. 

200 


Cir.  Vri.]  PARTIES    TO    COMMERCIAL    PAPER.  §    125 

signature  his  official  title,  as  agent  of  the  corporation,  the 
•insertion  in  tlie  bill  of  such  clauses  will  not  make  the  bill 
the  obligation  of  the  corporation.^ 

§  125.  Form  of  acceptance  by  agent  of  corporation.  — 

The  drawee  named  in  the  bill  of  exchange  is  the  only  per- 
son who  can  accept  the  bill,  except  for  honor  supra 
protest;'^  and  if  a  bill  is  drawn  on  an  individual,  he  cannot 
accept  as  the  agent  of  a  corporation  by  writing  the  name 
of  the  corporation  across  the  bill.  If  such  an  attempt 
were  made,  the  writing  across  the  face  of  the  bill  would 
not  constitute  the  acceptance.  It  could  not  be  the  accept- 
ance of  the  corporation,  for  the  bill  was  not  drawn  on  it; 
and  it  could  not  be  the  acceptance  of  the  person  on  whom 
it  was  drawn,  for  he  did  not  accept  in  his  individual 
capacity.^     On  the   other  hand,  if  the  bill  is  drawn  on  the 

1  Bank  of  British  N.  A.  v.  Hooper,  5  Gray,  567;  Kean  v.  Davis,  1  N.  J. 
683;  Leadbetterv.  Farrow,  5  Maule&  S.  34j;  Newhall  u.Dunlap,  14  Me. 
182;  Snowv.  Goodrich,  14  Me.  235.  In  Bas5  v.  O'Brien,  12  Gray,  477, 
where  the  bill  coutaiucd  the  clause  "charge  the  same  to  account 
of  disbursements  of  bark  Dublin,"  and  was  signed  by  the  master 
of  the  vessel,  without  any  official  designation,  Bigelow,  J.,  said: 
"The  owners  were  clearly  not  liable  as  drawers  of  the  draft.  It  does 
not  pui'port  on  the  face  to  bind  them.  Peterson  did  not  sign  it  as  mas- 
ter or  as  agent  of  the  owners,  or  otherwise  indicate  tliat  he  drew  it  in  a 
representative  capacity.  The  direction  to  cliarge  the  amount  to  tlie 
disbursements  of  bark  Dublin  was  only  a  designation  of  the  account  to 
which  the  payment  was  to  be  debited  wlien  the  draft  was  taken  up  by 
the  drawees,  but  did  not  in  any  way  disclose  the  persons  who  were  ul- 
timately responsible  for  such  disbursements.  The  rule  is  well  settled 
that  when  an  agent  signs  negotiable  paper  in  his  own  name,  without 
disclosing  his  principal,  the  agent  only  is  liable,  and  evidence  dehors  the 
instrument  cannot  be  resorted  to  for  the  purpose  of  showing  that  it  was 
given  for  or  on  account  of  some  other  per  ;on.  Whoever  takes  negotiable 
paper  enters  into  a  contract  witli  the  parties  who  appear  en  the  face  of 
the  instrument,  and  can  not  look  to  other  persons  for  payment." 

2  Seeposf,  §  211). 

*  Walker  v.  Bank  of  the  State,  9  N.  Y,  582.  But  see  More  v.  Charles, 
5  El.  &  B.  078.  wliere  it  was  held  that  an  attempt  to  bind  the  corpovation 
by  an  acceptance,  where  the  bill  was  drawn  on  the  individual  personally, 

207 


§     127  PRIVATE    CORPORATIONS    AS    PARTIES.  LCII.   MI. 

corporation  by  name,  unci  the  authorized  agent  accepts  lor 
the  corporation  by  writing  his  own  name  across  the  bill, 
merely  affixing  his  official  title,  it  will  be  a  good  acceptance 
by  the  corporation,  for  the  corporation  only  can  accept. 
There  is  therefore  no  doubt  of  the  character  in  which  the 
individual  who  sij^ns  is  actin^;.^ 

In  order,  therefore,  to  determine  who  can  accept,  it  must 
be  ascertained  who  the  drawee  is.  And  in  determiuino; 
whether  the  bill  is  draw*n  on  a  corporation  or  on  individ- 
uals, described  as  agents  of  the  corporation,  the  rule, 
already  explained  in  reference  to  the  execution  of  bills  and 
notes,  is  found  to  be  very  strictly  followed ;  and  where  a 
bill  is  drawn  on  an  individual  by  name,  with  his  official 
designation  affixed,  without  other  words  to  indicate  that  his 
name  is  mentioned  as  the  representative  of  the  corporation, 
the  bill  is  held  to  be  drawn  on  the  person  in  his  personal 
capacity,  and  he  cannot  bind  any  one  but  himself  by  his 
acceptance.^  But  where  there  are  other  indications,  ap- 
pearing on  the  face  of  the  instrument  that  the  drawer 
intended  to  draw  on  the  corporation,  instead  of  on  the 
agent,  whose  name  is  mentioned,  the  courts  will  hold,  as 

would  be  a  good  acceptance  by  that  individual.  See  also  to  same  effect, 
Herald  v.  Connah,  3t  L.  T.  (n.  s.)  885. 

1  Merchants'  Bank  v.  State  Bank,  10  Wall.  604;  Alabama  Coal  Mining 
Co.  V.  Brainard,  35  Ala.  479.  But  see,  contra,  Tucker  Mfg.  Co.  v.  Fair- 
banks, 98  Mass.  101. 

2  Thomas  v.  Bishop,  Chitty  Jr.  278;  2  Stra.  955;  7  Mod.  180;  Nichols 
V.  Diamond,  24  E.  L.  &  Eq.  40i>  (9  Exch.  154);  Bruce  v.  Lord,  1  Ililt. 
247;  Moss  v.  Livingston,  4  Comst.  208;  Slawson  w.  Loring,  5  Allen,  341. 
In  Exch.  Nat.  Bank  v.  Third  Nat  Bk.,  4  Eed.  Rep.  20,  and  Laflin  &  Rand 
Powder  Co.  V.  Sinsheimer,  48  Md.  411;  Hager  v.  Rice,  4  Col.  90,  it  was 
held  to  be  admissible  in  such  cases  to  show  by  parol  evidence,  as  be- 
tween the  payee  and  acceptor,  that  the  bill  was  drawn  on  the  corpora- 
tion and  not  on  the  individual ;  who  is  named  as  drawee  and  described 
as  the  accent  of  the  corporation.  But  see  Shelton  v.  Darling,  2  Conn. 
435;  Amison  v.  Ewiug,  2  Cold.  367,  in  which  it  is  held  that  such  a 
descriptio  personce  is  to  be  taken  as  an  intention  to  draw  on  the  corpora- 
tion, and  not  on  the  individual  whose  name  is  mentioned. 

208 


CH.  VII.]  PARTIES    TO    C03IMERCIAL    PAPER.  §     126 

in  the  case  of  the  execution  of  bills  and  notes,  that  the 
corporation  is  the  intended  drawee.  And  this  is  true,  not 
only  where  an  independent  person  draws  on  the  corpora- 
tion, but  also  where  one  officer  of  the  corporation  draws 
on  another  officer  of  the  same  corporation.  It  has  thus 
been  held  to  be  sufficient  evidence  of  the  intention  in  such 
cases  to  act  in  an  official,  instead  of  in  a  personal,  capacity, 
that  the  official  designations  are  added  to  the  names  of  the 
drawer  and  drawee,  and  the  bill  written  on  blanks,  contain- 
ing the  name  of  the  corporation,  or  dated  from  its  office.' 

§  126.     Form  of  indorsement  by  agent  of  corporation. 

As  the  designation  of  the  drawee  indicates  the  proper  form 
of  acceptance,  so  the  designation  of  the  payee  indicates  the 
proper  form  of  indorsement.  If,  under  the  rules,  previ- 
ously laid  down  here  in  reference  to  the  execution  of  bills 
and  notes  by  the  agents  of  corporation,  the  bill  or  note  is 
made  payable  to  an  individual  in  his  personal  capacity,  he 

1  Olcott  V.  Tioga  R.  R.  Co.,  40  Barb.  179;  s.  c.  27  N.  Y.  546;  Fuller  v. 
Hooper,  3  Gray,  334;  Chipman  v.  Foster,  119  Mass.  189;  "Wetumpka, 
etc.,  R.  R.  Co.  V.  Bingham,  5  Ala.  657;  Gillig  v.  Lake  Bigler  R.  R.  Co.,  2 
Nev.  214;  Sayre  v.  Nichols,  7  Cal.  535.  But  see,  contra,  Slawson  v.  Lor- 
ing,  5  Allen,  34l,  In  that  case,  the  bill  was  headed  "Office  Portage 
Lake  Manufacturing  Co.,"  and  was  addressed,  in  printed  capitals,  "  E. 
T.  Loring,  Agent."  It  was  signed  "  Charge  the  same  to  the  account  of 
this  company,  I.  R.  Jackson,  Agent."  After  stating  that  the  heading  of 
the  bill  could  only  be  considered  as  a  disclosure  of  the  real  drawer,  and 
the  principal  of  Jackson,  Bigelow,  J.,  said:  "  "What  then  is  left  on  the 
face  of  the  paper  to  show  that  the  defendant  is  not  liable  as  acceptor? 
Nothing  except  the  single  circumstance  that  the  address  to  him  as 
drawee  is  printed  in  large  capital  letters  at  the  top  of  the  instrument, 
with  the  addition  thereto  of  the  word  agent.  This  certainly  does  not 
necessarily,  or  even  prima  facie,  indicate  that  he  is  the  agent  of  the 
drawers.  It  is,  to  say  the  least,  equally  consistent  with  the  idea  that  he 
is  the  agent  of  some  third  person  not  named  on  the  face  of  the  bill. 
Nor  can  we  give  any  great  effect  to  the  fact  that  the  defendant's  name  as 
drawee  is  printed  as  part  of  the  blank  used  by  the  company.  A  draft 
or  bill  in  like  form  might  be  used,  if  their  course  of  business  was  to 
deal  with  him  as  the  agent  of  some  other  person  or  company." 

•  -.4  209 


§  127      PRIVATE  CORPORATIONS  AS  PARTIES.    [CH.  VII. 

cannot,  by  indorsing  it  in  the  name  of  the  corporation,  bind 
the  corporation  as  an  indorser ;  and  if  the  corporation  is  liable 
at  all  on  this  signature,  it  will  be  as  a  guarantor.^  Merely 
adding  to  the  payee's  name  an  official  designation,  describ- 
ing him  as  the  agent  of  a  corporation,  will  not  make  the  cor- 
poration' the  payee. '^  But  if  the  bill  or  note  is  made  payable 
to  the  corporation  in  proper  form,  the  indorsement  by  the 
proper  officer  of  the  corporation  by  his  own  signature,  with 
official  designation,  will  bind  the  corporation.' 

§  127.  Exceptions  as  to  cashiers  of  banks. —  It  has  be- 
come a  common  custom  to  make  commercial  paper  payable 
to  the  cashier  of  a  bank,  sometimes  notstatingof  what  bank 
he  is  the  cashier ;  and  it  has  been  uniformly  held  in  all  such 
cases  that  the  bank  and  not  the  cashier  is  the  right  party  to 
sue  on  it.*  And  if  the  cashier  indorses  such  paper,  with 
his  official  title,  the  bank,  and  not  he,  will  be  bound  by  the 
indorsement.^     In  the  same  manner,  if  a  bill  is  drawn  on 


^  See  postf  chapter  on  Transfer  by  Indorsement. 

2  BufEum  V.  Chadwick,  8  Mass.  103;  Vater  v.  Lewis,  36  Ind.  288; 
Chadsey  v.  McCreery,  27  111.  253.  But  see,  contra,  Babcock  v.  Beman,  1 
Ker.  209. 

3  Northampton  Bank  v.  Pepoon,  11  Mass.  288;  Elwell  v.  Dodge,  33 
Barb.  336. 

*  Baldwin  v.  Bk.  of  Newburg,  1  Wall.  234;  Stanford  Bank  u.  Ferris,  17 
Conn.  259;  Barney  v.  Xcwcomb,  9  Cush.  46;  Hartford  Bank  v.  Berry.  17 
Mass.  94;  Barbour  v.  Litchfield,  4  Abb.  App.  655;  Erwin  v.  Branch  Bank 
at  Mobile,  14  Ala.  307;  First  Nat.  Bank  v.  Hall,  44  N.  Y.  395;  Bank  of  N. 
Y.  V.  Bk.  of  Ohio,  29  N.  Y.  619;  Watervliet  Bank  v.  "White,  1  Denio,  613; 
Folger  17.  Chase,  18  Pick.  63. 

5  In  Folger  v.  Chase,  18  Pick.  67,  the  court  said:  *'  As  to  the  objection 
that  the  indorsement  is  not  made  in  the  name  of  the  corporation,  we 
think  that  the  indorsement  by  the  cashier  in  his  oflicial  capacity  suffic- 
iently shows  that  the  indorsement  was  madein  behalf  of  the  bank,  and  if 
that  is  not  sufficiently  certain  the  plaintiffs  have  the  right  now  to  prefix 
the  name  of  the  corporation."  See,  to  the  same  effect,  Bank  of  Genesee 
V.  Patchen  Bank,  13  N.  Y.  309;  s.  c.  19  N.  Y.  313;  Bank  of  Stale  of  N.  Y. 
V.  i\Iuskiugura  Branch,  29  N.  Y.  319-  State  Bank  v.  Fox.  3  Blatchf.  431; 
210 


CH.  VII.]  PARTIES    TO    COMMEKCIAL    PAPER.  §    128 

the  cashier  of  a  bank  by  name,  and  he  accepts  in  his  offic- 
ial character,  the  bank  will  alone  be  bound  by  the  accep- 
tance.^ This  method  of  signature  by  the  cashier  of  a  bank 
in  acceptances  and  indorsements  is  uniformly  held  to  be 
proper,  although  in  contravention  of  the  general  rule  of  law, 
which  requires  the  contracts  made  by  agents  to  run  in  the 
name  of  the  principal,  in  order  to  bind  the  latter .^ 

§  128.  Drafts  or  warrants  of  one  corporate  oflBcer 
upon  another.  —  It  is  a  comparatively  common  custom,  in 
the  dealings  of  a  private  corporation,  for  one  of  its  officers, 
its  president  or  secretary,  for  example,  to  draw  on  the 
treasurer  in  favor  of  some  person  to  whom  the  corporation 
has  become  indebted.  If  the  draft  or  warrant  contains  all 
the  other  essentials  of  negotiable  paper,  there  can  be  no 
doubt  that  it  possesses  all  the  characteristics  of  negotiabili- 
ty, and  is  to  be  considered  as  a  bill  of  exchange,  in  which 
the  same  person  is  both  drawer  and  drawee;  and  such  a 
warrant  may,  like  all  other  such  irregular  instruments,^  be 
treated  either  as  an  accepted  bill  or  as  a  promissory  note. 
Since  in  these  cases  the  drawee  is  the  same  person  who 
draws  —  althouo-h  throuo-h  a  different  aojent  —  it  has  been 
generally  held  that  it  is  not  necessary  in  order  to  hold  the 
corporation  liable  for  the  payee  or  holder  to  make  a  formal 

Northampton  Bank  v.  Pepoon,  11  Mass.  288;  Watervliet  Bank  v.  White, 
1  Deuio,  609;  Collins  v.  Johnson-,  16  Ga.  458:  Eobb  v.  Ross  Co.  Bank,  41 
Barb.  586;  Elvvell  v.  Dodge,  33  N.  Y.  336;  Bank  of  the  State  v.  Wheeler, 
21  lucl.  90;  Mechanics'  Banking  Assn.  v.  N.  Y.  &  S.  White  Lead  Co.,  35 
N.  Y.  505;  Houghton  v.  First  Nat.  Bank,  26  Wis.  663. 

^  Farmers',  etc.,  Bank  v.  Troy  City  Bank,  1  Doug,  (Mich.)  473. 

2  Fleckner  v.  U.  S.  Bank,  8  Wheat.  338;  Burnhara  v.  Webster,  19  Me. 
232;  Corserr?.  Paul,  41  N.  II.  24;  Folgef  v.  Chase,  18  Pick.  63;  Houghton  v. 
First  Nat.  Bank,  26  Wis.  663.  In  Elwell  v.  Dodge,  33  N.  Y.  336,  the  same 
ruling  was  made  in  regard  to  the  iudorsements  of  the  president  of  a 
bank. 

3  See  ante,  §  20. 

211 


§     1-8  PARTIES    TO    COMMERCIAL    PAPER.  [CH.   VII. 

presentment  on  the  officer  on  whom  the  paper  ia  drawn,  or 
to  give  notice  of  non-payment.^ 

»  Shaw  V.  Stone,  1  Cush.  25G;  Fairchild  v.  Ogdensburg,  etc.,  R.  R. 
Co.,  15  N.  Y.  337;  Allen  v.  Sea  Fire  &  Life  Ins.  Co.,  9  C.  B.  574;  Hasey  v. 
White  Pigeon  Beet  Sugar  Co.,  1  Doug.  (Mich.)  193;  Dennis  v.  Table 
Mountain  Water  Co.,  10  Cal.  3G9;  Indiana,  etc.,  R.  R.  Co.  v.  Davis,  20 
Ind.  6;  Maux  Ferry  Gravel  R.  Co.  v.  Branegan,  40  lud.  301,  overruliug 
the  earlier  cases  of  Marion,  etc.,  R.  R.  Co.  v.  Dillon,  7  Ind.  404;  Marion 
r.  Logansport  R.  R.  Ca.,  7  Ind.  648;  Marion,  etc.,  R.  R.  Co.  v.  Hodge,  9 
Ind.  1G3.  In  Marion,  etc.,  R.  R.  Co.  v.  Dillon,  supra,  Perkins,  J.,  said: 
"If  a  man  drew  a  bill  or  order  directly  upon  himself  payable  immediate- 
ly, it  is  his  promissory  note,  and  may  be  sued  on  accordingly.  In  such 
case  he  is  the  payer  as  well  as  drawer,  and  by  the  very  act  of  drawing 
admits  he  is  to  pay,  and  that  he  has  not  then  the  money  with  which  to 
make  payment.  But  where  the  debt  is  due  from  a  company,  and  it  is 
the  duty  of  one  officer  or  set  of  officers  to  allow  demands,  and  draw  up- 
on another  officer  who  has  the  custody  and  is  charged  with  the  duty  of 
the  disbursement  of  the  company's  funds  for  payment,  such  order  must, 
as  a  general  rule,  be  presented  in  a  reasonable  time  for  payment."  See 
also,  contra,  Weturapka,  etc.,  R.  R.  Co.  v.  Bingham,  5  Ala.  603. 

212 


CHAPTER  yni. 

GOVERNMENTS    AND    MUNICIPAL  CORPORATIONS  AS  PARTIES 
TO  COMMERCIAL  PAPER. 

Section  132.  Governments  as  parties. 

133.  Municipal  or  public  corporations  as  parties. 

134.  How  far  their  obligations  are  negotiable. 

135.  What  agents  are  authorized  to  bind  the  corporation. 

136.  Whether  unauthorized  agents  are  personally  liable. 

137.  Form  of  signature  by  public  agents. 

138.  DraftSj  or  warrants  of  one  officer  on  another,  whetlier  ne- 

gotiable. 

139.  Indorsement  or  assignment  of  corporate  drafts  or  war- 

rants. 

140.  Presentment  of  warrants  for  payment. 

141.  Warrants  payable  out  of  particular  fund. 

142.  Suit  on  original  indebtedness. 

§  132.  Governments  as  parties. —  Except  so  far  as  the 
power  of  the  government  may  be  restricted  by  constitu- 
tional limitations,  there  can  be  no  doubt  that  both  the  State 
and  Federal  governments  may  by  their  duly  authorized 
agents  become  parties  to  any  species  of  commercial  paper  ,i 
either  as  drawer,  maker  or  acceptor. ^  And  the  power  of 
foreign  governments  to  become  parties  to  commercial  paper 
has  also  been  recognized  by  the  Supreme  Court  of  the 
United  States.^     But  since  governments  do  not,  in  the  reg- 

1  As  to  the  power  of  either  government  to  emit  bills  of  credit,  see 
post,  chapter  on  Bank  Notes,  Treasury  Notes  and  Bills  of  Credit. 

'  United  States  v.  Bank  of  Metropolis,  15  Pet.  377;  United  States  v. 
Central  Nat.  Bank,  6  Fed.  Rep.  134 ;  State  exrel.  Flock  v.  Cobb,  G4  Ala.  150, 

8  Jones,  indorsee,  v.  Le  Tombe,  3  Dall.  384.  In  this  case,  Le  Tombe, 
the  French  Consul-general  at  Philadelphia,  drew  on  the  French  govern- 
ment, and  in  an  attempt  by  an  indorsee  to  hold  the  consul  liable,  the 
court  held  that  he  was  not  personally  liable,  since  he  acted  only  in  his 
official  capacity. 

213 


§     i;52  GOVERNMENTS    AS    I'AUTIK.S.  [ciI.  VIII. 

ul.'ir  and  ordinary  administration  of  public  affairs,  require 
the  exercise  of  this  power,  it  would  not  be  proper  or  legiti- 
mate for  the  courts  to  recognize  in  any  officer  of  tlie  gov- 
ernment an  implied  power  to  bind  the  government  by  his 
execution  of  a  bill  or  note.  Only  under  an  express  power, 
granted  by  the  legislative  department  of  the  government, 
can  an  officer  of  the  government  claim  authority  to  issue 
commercial  paper  in  its  name  except  so  far  as  the  power  to 
issue  commercial  paper,  or  to  make  the  government  a  party 
to  it,  may  be  implied  as  being  necessary  to  carry  out  some 
express  power.  This  ruling  has  been  definitely  settled  in 
this  country  by  the  decision  of  the  Supreme  Court  of  the 
United  States  in  the  case  of  the  Floyd  Acceptances.^ 

In  this  case  it  was  held  that  no  officer  of  the  United 
States  government  has  the  implied  authority  to  bind  the 
government  by  his  acceptance  of  a  bill  in  his  official  capac- 
ity, although  it  can  be  shown  by  extraneous  evidence,  as 
well  as  on  the  face  of  the  bill,  that  the  bill  was  accepted, 
in  order  to  provide  supplies  for  an  acknowledged  public 
purpose.  In  the  course  of  the  opinion  of  the  court.  Miller, 
J. ,  said  :  — 

"  Recurrimr,  then,  to  the  written  law  as  the  exclusive 
source  of  such  authority,  we  may  confidently  assert  th.-i 

1  7  Wall.  6G7.  In  this  case,  suit  was  brought  upon  the  followiug  in- 
strument: — 

$5,000.  WAsmxGTOX,  Nov.  28,  1859. 

Ten  months  after  date,  for  value  received,  pay  to  our  own  order,  at 
the  Bank  of  the  Republic,  New  York  city,  Five  Thousand  Dollars,  and 
charge  to  account  of  our  contract  for  supplies  for  the  army  in  Utah. 
To  Hon.  J.  B.  Fi>oyd,     *  Russell,  Majors  &  Waddell. 

Secretary  of  War. 
(Indorsement).  (Acceptance.) 

Russell,  Majors  &  Waddell.  War  Department,  Nov.  28,  1859. 

Accepted. 

John  B,  Floyd, 
Secretary  of  War. 

214 


CH.  Vril,]       MUNICIPAL    CORPORATIONS    AS    PARTIES.  §    133 

there  is  no  express  authority  to  any  officer  of  the  govern- 
ment to  draw  or  accept  bills  of  exchange.      *     *     * 

**  The  authority  to  issue  bills  of  exchange  not  being  one 
expressly  given  by  statute,  can  only  arise  as  an  incident  to 
the  exercise  of  some  other  power.  "When  it  becomes  the 
duty  of  an  officer  to  pay  money  at  a  distant  point,  he  may 
do  so  by  a  bill  of  exchange,  because  that  is  the  usual  and 
appropriate  mode  of  doing  it.  So,  when  an  officer  or 
agent  of  the  government  at  a  distance,  is  entitled  to  money 
here,  the  person  holding  the  fund  may  pay  his  drafts.  And 
whenever,  in  conducting  any  of  the  fiscal  affairs  of  the 
government,  the  drawing  a  bill  of  exchange  is  the  appro- 
priate means  of  doing  that  which  the  department,  or  officer 
having  the  matter  in  charge,  has  a  right  to  do,  then  he  can 
draw  and  bind  the  government  in  doing  so.  But  the  obliga- 
tion resting  on  him  to  perform  that  duty,  and  his  right  and 
authority  to  effect  such  an  object,  is  always  open  to  in- 
quiry; and  if  they  be  found  wanting,  or  if  they  be  forbidden 
by  express  statute,  then  the  draft  or  acceptance  is  not  bind- 
ing on  the  government. 

"  It  cannot  be  maintained  that,  because  an  officer  can 
lawfully  issue  bills  of  exchange  for  some  purposes,  that  no 
inquiry  can  be  made  in  any  case  into  the  purpose  for  Avhich 
a  bill  was  issued.  The  government  cannot  be  held  to  a 
more  rigid  rule  than  a  private  individual.     *     *     * 

'*  In  accordance  with  these  views,  we  are  of  the  opinion 
that,  as  there  can  be  no  lawful  occasion  for  any  de- 
partment of  the  government,  or  for  any  of  its  officers  or 
agents  to  accept  drafts  drawn  on  them,  under  any  statute 
or  other  law  now  known  to  us,  such  acceptances  cannot 
bind  the  government."^ 

§  133.  Municipal  or  public  corporations  as  parties.  — 

A  distinction  is  sometimes  made  between  municipal  and  pub- 

1  Miller,  J.,  iu  the  Floyd  Acceptances,  7  Wall.  G79-681. 

215 


§     133  MUXICIPAL    CORPORATIONS    AS    PARTIES.        [CH.   VIII. 

lie  corporations,  and  Judge  Dillon,  in  his  work  on  Municipal 
Corporations,  says :  "The  terra  municipal  corporation  has 
reference  to  incorporated  villages,  towns  and  cities,  as  dis- 
tinguished from  other  public  corporations,  such  as  counties 
and  quasi  corporations."  ^  But  although  an  attempt  has 
been  made  to  show  the  contrary ,2  the  only  essential  differ- 
ence between  them  is  the  relative  quantity  of  powers,  con- 
ferred by  the  State  government  upon  each.  Cities,  towns, 
villages,  counties,  j^arishes,  school  and  police  districts,  all 
these  public  corporations  are  instituted  for  the  purpose  of 
establishing  some  form  of  local  government.  Upon  some 
are  conferred  more  extensive  powers  than  upon  others,  but 
each  of  them  is  invested,  either  expressly  or  by  necessary 
implication,  with  all  the  powers  necessary  to  carry  out  the 
jDurposes  of  its  existence.  Not  only  are  the  powers  of  a 
county  or  school  district  more  restricted  than  those  of  a 
city  or  town,  but  the  powers  of  city  and  town  government 
vary  very  materially  with  the  provisions  of  their  charters. 

1  Dillon  Mun.  Corp.,  §  10. 

2  "  A  municipal  corporation  has  for  its  object  the  interests,  advantage 
and  convenience  of  the  locality  and  its  people.  A  county  organization 
is  intended  to  subserve  the  policy  of  the  State  at  large  in  such  matters 
as  finance,  education,  provision  for  the  poor,  military  organization, 
means  of  travel  and  transport,  and  especially  the  administration  of 
justice.  A  municipal  corporation  is  a  government,  possessing  powers 
of  legislation,  and  is  charged  vrith  a  general  care  for  the  welfare  of  the 
people;  while  a  county  organization  is  merely  the  involuntary  agent  of 
the  State,  charged  with  the  interests  of  the  State  in  the  particular 
county,  and  clothed  with  certain  administrative  functions,  limited  in  ex. 
tent  and  clearly  defined  by  law.  There  is,  of  course,  some  analogy 
between  the  two  classes  of  corporation.  They  are  parts  of  the  same 
political  system.  They  differ  in  dignity  and  in  power.  Each  has  such 
implied  powers  as  are  necessary  for  the  execution  of  its  powers  expressly 
granted.  But  it  must  be  apparent  that  the  implied  powers  of  a  muni- 
cipal corporation  are  not  to  be  measured  by  those  of  a  mere  public  cor- 
poration, such  as  a  parish,  township,  or  county.  There  is  little  analogy 
between  the  powers  of  the  councils  of  a  great  city,  and  those  of  the 
supervisors  of  a  petty  township,  or  the  pul)lic  jury  of  a  parish."  Pax- 
son,  J.,  in  City  of  Williamsport  v.  Commouweulth.  84  Pa.  St.  49!). 

216 


CH.  VIII.]       MUNICIPAL    CORPORATIONS    AS    PARTIES.  §     133 

In  every  case,  therefore,  of  the  creation  of  a  public  or 
municipal  corporation,  the  legislature  by  its  express  enact- 
ment, either  by  special  acts  or  under  general  laws,  de- 
termines the  powers  of  these  corporations.  All  such 
corporations,  whether  city  or  county,  town  or  school 
district,  can  exercise  only  such  powers  as  are  expressly 
granted  by  legislative  enactment,  or  which  are  necessarily 
implied,  in  order  to  exercise  the  powers  expressly  granted 
or  to  carry  out  the  purposes  of  their  creation.^ 

The  question  then  arises,  can  a  municipal  corporation, 
through  its  authorized  agent,  lawfully  become  a  party  to 
commercial  paper?  This  question  is  only  difficult  to  answer 
when  there  is  no  express  grant  of  power,  and  the  power,  if 
it  exists  at  all,  must  be  implied.  Unless  some  provision 
of  the  State  constitution  intervenes,  it  cannot  be  doubted 
that  the  State  legislature  may  grant  such  a  power  to  any 
municipal  or  public  corporation.  The  cases,  in  which  this 
question  called  for  an  answer,  are  at  variance,  some  holdino- 
that  the  municipal  corporation  has  such  an  implied  power, ^ 

1  "  It  is  a  well  settled  rule  of  construction  of  grants  by  the  legisla- 
ture to  corporations,  whether  public  or  private,  that  only  such  powers 
and  rights  can  be  exercised  under  them  as  are  clearly  comprehended 
■vvithin  the  words  of  the  act,  or  derived  therefrom  by  necessary  implica- 
cation,  regard  being  had  to  the  objects  of  the  grant.  Any  ambiguity  or 
doubt  arising  out  of  the  terms  used  by  the  legislature  must  be  resolved 
in  favor  of  the  public."  Minturn  v.  Lame,  23  How.  435,  436.  "  Boroughs 
and  towns  are,  confessedly,  inferior  corporations.  They  act  not  by  any 
inherent  right  of  legislation,  like  the  legislature  of  the  State,  but  their 
authority  is  delegated,  and  their  powers  must  be  strictly  pursued. 
"Within  the  limits  of  their  charier,  their  acts  are  valid;  without  it,  they 
are  void."  Willard  v.  Killingworth,  8  Conn.  247;  Thompson  v.  Lee  Co., 
3  Wall.  320;  Thomas  v.  Richmond,  12  Wall.  349;  Merriam  v.  Moody's 
Executors,  25  Iowa,  1G3;  Nichol  v.  Mayor,  9  Humph.  252;  Leonard  v. 
Canton,  35  Miss.  189;  Douglass  v.  Placerville,  18  Cal.  643;  Wallace  v. 
San  Jose,  29  Cal.  180;  Smith  v.  Madison,  7  Ind.  86;  Memphis  v.  Albany, 
9  Heisk.  518  (24  Am.  Rep.  331). 

*  City  of  Williamsport  v.  Conamonwealth,  84  Pa.  St.  487;  SturteVanj 
V.  City  of  Alton,  3  McLean,  393;  Mullerty  v.  Cedar  Falls,  19  Iowa,  21; 

217 


§     133  MUNICIPAL    CORPORATIONS    AS    PARTIES.        [CH.  VIIi. 

while  others  deny  that  the  public  and  municipal  corpora- 
tions have  such  a  power. ^ 

There  are  two  sub-questions  involved  in  this  discussion: 
First,  whether  a  public  or  municipal  corporation  has  an  im- 
plied power  to  borrow  money,  and  bind  the  community  by 
the  obligation  thus  assumed,  or  whether  such  a  corporation 
can  only  obtain  funds  by  means  of  taxation.  Secondly, 
whether,  if  the  implied  power  to  borrow  money  be  con- 
ceded, it  includes  the  power  to  give  in  evidence  of  the 
money  borrowed  a  negotiable  note  or  bill. 

In  reference  to  the  first  question,  the  authorities  are  di- 
vided. It  is  urged  in  behalf  of  the  denial  to  such  corpora- 
tions of  any  implied  power  to  borrow,  that  public  and 
municipal  cori:)orations  are  established  for  purposes  of  local 
government,  and  the  ordinary  means  by  which  such  pur- 
poses may  be  carried  on  can  be  procured  by  the  exercise  of 
the  governmental  power  of  taxation.  That  being  in  ordi- 
nary cases  a  sufficient  source  of  revenue,  there  is  no  reason 
why  the  power  to  borrow  should  be  implied.  For  powers 
are  only  implied,  when  they  are  necessary  to  attain  the 
ordinary  purposes  for  Avhich  these  corporations  are  created. 
If  an  extraordinary  public  benefit  is  suggested  to  be  needful 
to  any  community,  but  which  can  be  secured  only  by  the  ex- 
ercise of  the  power  to  borrow,  the  legislature  can  be  asked  for 
a  special  grant  of  the  power. ^  Bat,  it  must  be  confessed  that 

City  of  Galena  v.  Corwith,  48  111.  423;  Mills  v.  Gleason,  11  "Wis.  470; 
Bank  of  Chillicothe  v.  Mayor  of  Chillicothe,  7  Ohio,  pt.  II.,  p.  31;  Ket- 
chum  V.  City  of  Buffalo,  14  N.  Y.  35G. 

1  Mayor  v.  Ray,  19  Wall,  4G3 ;  Police  Jury  v.  Britton,  15  Wall.  566; 
Commissioners  of  Shawnee  County  v.  Carter,  2  Kan,  115;  Marcy  v. 
To-.vaship  of  Oswego,  92  U.  S.  637;  Humboldt  Township  v.  Long,  92  U. 
S.  042.     See  cases  cited  in  succeeding  notes. 

2  See,  in  support  of  this  position,  the  opinion  of  Beasley,  Ch.  J.,  in 
Ilackettstown  v.  Swackhamcr,  37  N.  J.  L.  I'Jl;  Agiiew,  C.  J.,  dis- 
senting in  Williamsport  v.  Commonwealth,  St  Pa.  St.  487,  505;  Knapp  v. 
Hoboken,  39  N.  J.  L.  304;  Cause  v.  Clarksville,  5  Dillon  C.  C.  105;  Dil- 
lon's Municipal  Corporations,    §§    117-127.     The   following  opinion  of 

218 


CH.  VIII.]       MUNICIPAL    CORPORATIONS    AS   PARTIES.  §    133 

however  strong  ia  point  of  reason  this  position  may  be,  it  is 
not  supported  by  the  majoritj^  of  the  cases.  The  current  of 
judicial  authority  is  in  fact  running  in  favor  of  the  opposite 
view,  viz.  :  that  a  municipal  corporation,  like  a  private  cor- 
poration, may  exercise  any  power  that  is  suitable  or  needful 
to  the  effectuation  of  the  objects  for  which  it  is  created. ^ 

Bradley,  J.,  in  Mayor  of  Nashville  v.  Ray,  19  Wall.  475,  undoubtedly 
constitutes  the  strongest  argument  that  can  be  advanced  in  favor  of  this 
view.    The  justice  says :  — 

"A  municipal  corporation  is  a  subordinate  branch  of  the  domestic 
government  of  a  State.  It  is  instituted  for  public  purposes  only,  and 
has  none  of  the  peculiar  qualities  and  characteristics  of  a  trading  cor- 
poration, instituted  for  purposes  of  private  gain,  except  that  of  acting 
in  a  corporate  capacity.  Its  objects,  its  responsibilities  and  its  powers 
are  different;  as  a  local  governmental  institution,  it  exists  for  the  bene- 
fit of  the  people  within  its  corporate  limits.  The  legislature  invests  it 
with  such  power  as  it  deems  adequate  to  the  ends  to  be  accomplished. 
The  power  of  taxation  is  usually  conferred  for  the  purpose  of  enabling 
it  to  raise  the  necessary  funds  to  carry  on  the  city  government  and  to 
make  such  public  improvements  as  it  is  authorized  to  make.  As  this  is 
a  power  which  immediately  affects  the  entire  constituency  of  the  muni- 
cipal body  which  exercises  it,  no  evil  consequences  are  likely  to  ensue 
from  its  being  conferred ;  although  it  is  not  unusual  to  afSx  limits  to  its 
exercise  for  any  single  year.  The  power  to  borrow  money  is  different. 
When  this  is  exercised  the  citizens  are  immediately  affected  only  by  the 
benefit  arising  from  the  law;  its  burden  is  not  felt  until  afterwards. 
Such  a  power  does  not  belong  to  a  municipal  corporation  as  an  incident 
of  its  creation.  To  be  possessed  it  must  be  conferred  by  legislation, 
either  express  or  implied.  It  does  not  belong,  as  a  mere  matter  of 
course,  to  local  governments  to  raise  loans,  such  governments  are  not 
created  for  any  such  purpose.  Their  powers  are  prescribed  by  their 
charters,  and  those  charters  provide  the  means  for  exercising  the 
powers;  and  the  creation  of  specific  means  excludes  others.  Indebted- 
ness may  be  incurred  to  a  limited  extent  in  carrying  out  the  objects  of 
the  incorporation.  Evidences  of  such  indebtedness  may  be  given  to  the 
public  creditors.  But  they  must  look  to  and  rely  on  the  legitimate 
mode  of  raising  the  funds  for  its  payment.  That  mode  is  taxation." 
Bradley,  J.,  in  Mayor  v.  Eay,  19  Wall.  475.  Although  the  conclusion 
reached  in  this  opinion  was  made  the  judgment  of  the  court,  one-half  of 
the  members  of  the  court  dissented  from  the  opinion  that  there  was  no 
implied  power  to  borrow. 

1  The  case  of  Williamsport  v.  Commonwealth,  84  Pa.  St.  487,  is  a 

219 


§     133  MUNICIPAL    CORPORATIONS    AS    PARTIES.        [cil.   VIII. 

The  power  to  borrow  money  is  held  to  be  implied,  not  only 
when  there  has  been  no  express  grant  of  such  a  power, 
but   also    when  this  power  has    with  limitations  been  ex- 

Iciidini;  case  ou  tliis  subject.  In  delivering  the  opinion  of  the  court, 
Paxson,  J.,  s;iid  (p.  494)  :  "Taken in  its  broad  sense,  the  power  to  bor- 
row money  and  issue  bonds  therefor  cannot  be  said  to  be  among  the 
implied  powers  of  a  municipal  corporation.  For  general  purposes  such 
power  does  not  exist,  for  tlie  reason  that  it  is  not  necessary  for  the 
objects  for  which  it  was  created.  Tlius  it  has  never  been  contended 
that  a  municipality  may  borrow  money  and  issue  bonds  or  notes  for  ob- 
jects having  no  necessary  relation  to  the  performance  of  municipal 
duties.  To  admit  sucli  a  principle  would  be  destructive  of  such  organ- 
ization and  place  the  taxpayers  of  a  city  at  the  mercy  of  the  first  band  of 
plunderers  wlio  should  happen  to  ol)tain  the  temporary  control  of  its 
affairs.  The  question  for  our  consideration  is  whether  the  power  to 
issue  bonds  is  one  of  the  inherent  povrers  of  a  municipal  corporation  in 
a  limited  sense ;  that  is  to  say,  for  the  purpose  of  providing  for  such 
expenditure  as  is  strictly  genuine  to  the  objects  for  which  such  corpo- 
rations are  created,  we  are  not  without  authorities  that  question,  if  they 
do  not  deny  this  power.  Judge  Dillon,  one  of  the  ablest  writers  upon 
this  branch  of  law,  says  in  bis  treatise  on  the  Law  of  IMunicipal  Bonds,  at 
page  13 :  '  We  regard,  as  alike  unsound  and  dangerous,  that  a  public  or 
mimicipal  corporation  possesses  the  implied  power  to  borrow  money  for 
its  ordinary  purposes,  and  as  incidental  to.that,  the  power  to  issue  com- 
mercial securities.  The  cases  on  this  subject  are  conflicting,  but  the 
tendency  is  towards  the  view. above  indicated.'  The  ground  principally 
relied  upon  by  the  learned  author  and  others  who  take  this  view  of  the 
question,  is  that  the  power  is  a  dangerous  one.  But  showing  that  the 
power  is  dangerous  does  not  prove  that  it  does  not  exist.  Power  is 
always  dangerous  *  *  *  The  dangerous  nature  of  a  power  might  be  a 
persuasive  argument  with  the  legislature  why  it  should  be  denied  to  a 
municipal  corporation,  but  cannot  be  accepted  as  a  conclusive  rcr.sonthat 
it  does  not  exist.  I  am  willing  to  concede  that  the  power  to  issue  muni- 
cipal bonds  is  dangerous.  It  affords  opportunities  to  uuscruijulous  men, 
hungering  for  the  spoils  of  rich  municipalities,  to  enter  into  extravagant 
contracts,  at  ruinous  prices,  by  mortgaging  the  resources  of  the  people 
in  advance.  The  facility  of  placing  municipal  bonds,  at  high  rates  of 
interest,  and  having  many  years  to  run  is  certainly  a  great  inducement 
in  many  cases  to  imwise  and  lavish  expenditure.  It  might  have  been 
better  for  the  legislature  in  the  first  instance  to  have  applied  the  prin- 
ciple *  pay  as  you  go  '  to  such  corporations;  and  to  have  required  them 
to  seek  legislative  sanction  whenever  they  sought  to  incur  obligations 
and  make  expenditures    beyond   their  ability  to  pay  out  of  their  current 

220 


CH.  VIII.]       MUNICIPAL    CORPORATIONS    AS    PARTIES.  §    133 

pressly  granted,  and  it  seems  to  be  necessary  to  make  use 
of  the  power  beyond  the  limits  imposed  in  the  express 
grant  of  the  power  ;  as  where  a  city  charter  expressly  grants 
to  the  municipal  corporation  the  power  to  borrow  whatever 
money  it  may  need,  not  exceeding  a  certain  sum  per  year, 
and  to  issue  bonds  for  the  same.  It  was  held  in  Illinois 
that  under  the  implied  power  to  borrow  money,  the  city 
may  lawfully  borrow  more  money  than  what  is  stated  in 
the    charter.^     This    is    certainly  carrying  the  doctrine  of 

receipts  from  taxation.  Tliis,  however,  is  a  question  with  which  we 
have  no  present  concern.  Our  duty  is  to  declare  the  law  not  to  make 
it.  "  See,  to  the  same  effect.  Bank  of  Chillicothe  v.  Mayor  of  Chillico- 
the,  7  Ohio,  Pt.  II.,  p.  31;  Douglass  v.  Virginia  City,  5  Nev.  147;  Sturte- 
vant  V.  City  of  Alton,  3  McLean,  393;  Mul.arky,  v.  Cedar  Falls,  19  Iowa, 
21;  New  Albany  Bank  v.  Danville,  60  Ind.  504;  Sheffield  v.  Andress,  56 
Ind.  157;  Galena  v.  Corwith,  48  111,  423;  Board  v.  Day,  19  Ind. 
450;  Mells  v.  Gleason,  11  Wis.  470;  Ketchum  v.  City  of  Buffalo, 
14  N.  Y.  356;  Kelly  v.  Mayor  of  City  of  Brooklyn,  4  Hill,  263; 
Clarke  v.  School  District,  3  R.  I.  199 ;  First  Municipality  of  New  Orleans 
V.  McDonough,  2  Robinson,  244;  Clarke  u.  City  of  DeMoines,  19  Iowa,  199; 
Adams  v.  Railroad  Company,  2  Coldw.  645.  Under  the  English  Municipal 
Corporations  Act,  the  issue  of  bonds  for  loans  to  such  corporations  has 
been  held  to  be  valid:  Pallister  v.  Mayor,  etc.,  07  Eng.  C.  L.  (9  C.  B.) 
744;  Payne  V.  Mayor,  etc.,  3  Hurl.  &  N.  572.  See  also  Kendall  v.  King, 
84  Eug.  C.  L.  (17  C.  B.)  483;  Nowell  v.  Mayor,  etc.,  9  Exch.  457.  But 
the  issue  of  promissory  notes  was  held  to  be  invalid  under  that  act: 
Attorney-General  v.  Litchfield,  13  Sim.  547;  Reg  v.  Litchfield,  4  Q.  B.  893. 
1  Breese,  Ch.  J.  said:  "  One  single  question  will,  we  think,  settle  the 
present  difficulty.  The  power  in  the  charter  to  borrow  money  permits 
it  to  be  expended  in  the  useful  and  permanent  improvement  of  the  city. 
Now  suppose  the  whole  amount  [$20,000  per  year]  is  borrowed,  and  all 
expended  in  improvements,  has  the  city  no  power  to  provide  for  its 
existing  debt,  which  may  be  twice  $20,000?  *  *  *  Every  corporation 
or  every  natural  person  has  the  undeniable  and  inherent  right  to  pay  its 
debts  or  provide  for  their  payment ;  to  fund  them  if  that  be  deemed  the 
best  policy,  and  issue  the  necessary  evidence  thereof.  It  will  not  be 
denied  that  municipal  corporations  have  power  to  contract  debts  and  with- 
out limit  unless  restricted  by  their  charters.  Having  this  power,  it  fol- 
lows that  they  can  provide  for  their  payment  in  such  mode  as  they  and 
the  holders  of  the  indebtedness  may  agree  upon.  *  *  *  The  right 
bestowed  by  the  charter  to  borrow  by  no  means  nullifies  the  power,  vital 
to  every  corporation,  to  pay  its  debts  or  provide  for    their   payment  by 

221 


§     134  MUNICIPAL    CORPOUATIOXS    AS    PAIITIES.       [ciI.  VIII. 

implied  powers  to  the  extreme  limits  of  constitutional  and 
statutory  construction.  The  general  rule  of  construction  is, 
that  the  express  grant  of  a  power  with  limitations  neces- 
sarily excludes  any  implication  of  such  a  power  beyond 
the  limitation.  ^ 

It  may  be  well  to  state,  that  the  implied  power  to  borrow 
money  was  in  this  country  conceded  to,  and  exercised  by, 
municipal  corporations  for  many  years,  before  it  was  seri- 
ously questioned.  And  it  is  very  probable  that  it  would  not 
have  been  questioned,  if  the  municipalities  had  not  entered 
upon  a  career  of  reckless  expenditure  of  the  public  funds 
and  credit  in  the  development  of  internal  improvements. 

§  134.  How   far  their   obligations    are    negotiable.  — 

The  second  subsidiary  question  in  this  discussion  is :  Con- 
ceding the  power  to  borrow  money,  can  the  municipal 
corporation  issue,  as  evidences  of  its  indebtedness,  nego- 
tiable instruments,  which  will  not  only  be  assignable  from 
one  person  to  another,  but  which  enable  the  indorsee  to 
hold  the  indorser  liable  as  a  guarantor,  and  to  take  the  in- 
struments free  from  the  equitable  defenses,  that  can  be  set 
up  by  the  corporation  against  the  original  payee,  but  which 
do  not  appear  on  the  face  of  the  instruments. ^     The  author- 

post2)oiiing  their  paymeutto  a  future  day,  and  issuing  evidences  tlicreof. 
We  do  not  think  the  citation  of  any  authority  necessary  to  establish  a 
proposition  so  plain.  A  city  being  in  debt,  which  is  evidenced  by  scrip 
or  promissory  notes,  may  surely  change  the  form  of  the  indebtedness  to 
interest  bearing  bonds,  and  this  without  any  express  authority  in  Its 
charter.  It  is  an  inherent  power  and  vital,  without  which  such  or- 
ganizations could  not  live."     City  of  Galena  v.  Corvvith,  48  111.  423. 

1  It  has  been  held  by  the  Supreme  Court  of  the  United  States  that 
when  the  charter  expressly  grants  the  power  to  borrow  a  certain  sum 
for  general  purposes,  it  does  not  deny  or  take  away  the  implied  power  to 
borrow  in  excess  of  that  amount  for  special  authorized  purposes.  Hitch- 
cock i'.  Galveston,  OG  U.  S.  341;  United  States  I'.  Fort  Scott,  99  U.S. 
152. 

^  For  the  detailed  application  of  this  question  to  corporate  securities, 
see  post,  chap.  XXY.,  on  Coupon  Bonds. 
222 


CH.  VIII.]       MUNICIPAL    CORPORATIONS    AS    PARTIES.  §     134 

ities  seem  to  be  agreed  that  if  the  legislature  expressly 
grants  the  power  to  borrow  money,  the  corporation  may 
issue  therefor  its  negotiable  instruments  of  indebtedness.^ 
But  the  authorities,  whicli  question  the  existence  of  an  im- 
plied power  to  borrow  money,  deny  that  in  any  case,  where 
the  implied  power  must  be  conceded  to  exist,  it  is  necessary 
to  include  in  the  concession  the  power  to  issue  negotiable 
securities.  The  claim  is  made  that  the  latter  power  is  not 
necessary  to  the  full  exercise  of  the  power  to  borrow 
money,  and  should,  therefore,  not  be  implied.^     But  this  is 

1  Seybert  v.  Pittsbur?,  1  Wiill.  272;  Rogers  v.  Burlington,  3  Wall.  654, 
GC6;  Commonwealth  v.  Pittsburg,  34  Pa.  St.  496,  511;  Middleton  v.  Alle- 
ghany Co.,  37  Pa.  St.  241;  Reinboth  v.  Pittsburg,  41  Pa,  St.  278;  Railroad 
Co.  V.  Evansville,  15  Incl.  395,  412;  De  Voss  v.  Richmond,  18  Gratt.  338; 
s.  c.  7  Am.  Law  Reg.  Cx.  s.)  589  ;  Galena  v.  Corwith,  48  111.  423. 

-  "The  purpose  and  object  of  a  municipal  corporation  do  not  ordinarily 
require  the  exercise  of  any  such  power  (of  issuing  commercial  paper). 
They  are  not  trading  corporations,  and  ought  not  to  become  sucli.  They 
ax"e  invested  with  public  trusts  of  a  governmental  and  administrative 
character :  they  are  the  local  governments  of  the  people,  established  by 
them  as  their  representatives  in  the  management  and  administration  of 
municipal  affairs  affecting  the  peace,  good  order,  and  general  well-being 
of  the  community  as  a  political  society  and  district ;  and  Invested  with 
power  by  taxation  to  raise  the  revenues  necessary  for  those  purposes. 
The  idea  that  they  have  the  incidental  power  to  issue  an  unlimited 
amount  of  obligations  of  such  a  character  as  to  be  irretrievably  binding 
on  the  people,  without  a  shadow  of  consideration  in  return  is  the  growth 
of  a  modern  misconception  of  their  true  object  and  character.  If  in  the 
exercise  of  their  important  trusts  tlie  power  to  borrow  money  and  to 
issue  bonds  or  other  commercial  securities  is  needed,  the  legislature  can 
easily  confer  it  under  the  proper  limitations  and  restraints,  and  with 
proper  provisions  for  future  repayment.  Without  such  authority  it  can- 
not be  legally  exercised.  It  is  too  dangerous  a  power  to  be  exercised  by 
all  municipal  bodies  indiscriminately,  managed  as  they  are  by  persons 
whose  individual  responsibility  is  not  at  stake. 

"  Vouchers  for  money  due,  certificates  of  indebtedness  for  services 
rendered  or  for  property  furnished  for  the  uses  of  the  city,  orders  or 
drafts  drawn  by  one  city  officer  upon  another,  or  any  other  device  of  the 
kinds  used  for  liquidating  the  amounts  legitimately  due  to  public  creditors, 
are,  of  course,  necessary  instruments  for  carrying  on  the  machinery  of 
municipal  administration,  and  for  anticipating  the  collection  of  taxes. 

223 


§    134         MUNICIPAL    CORPORATIONS    AS    PARTIES.       [CH.  VHI. 

not  true.  If  the  instruments  which  a  municipal  cor- 
poration can  issue  as  evidence  of  their  indebtedness,  in- 
curred under  the  implied  power  to  borrow,  are  subject  in 
the  hands  of  a  bo7ia  fide  holder  to  the  defect  of  every  hid- 
den defense  that  may  be  set  up  against  the  original  payee, 
the  money  cannot  be  borrowed  so  readily,  or  on  such  rea- 
sonable terras.  Higher  rates  of  interest  or  discounts 
would  be  demanded  as  an  inducement  to  lend  to  such  cor- 
porations. It  would  seem  that  the  power  to  issue  the  ne- 
gotiable instrument  as  an  evidence  of  indebtedness  is  as 
necessary  or  serviceable  to  the  municipal  or  public  corpora- 
tion, as  it  is  to  the  private  corporation  or  the  natural  person.^ 


But  to  invest  such  documents  with  the  character  and  incidents  of  com- 
mercial paper,  so  as  to  make  them  in  the  hands  of  bona  fide  holders 
absolute  obligations  to  pay,  however  irregularly  or  fraudulently  issued, 
is  an  abuse  of  their  true  character  and  purpose.  It  has  the  effect  of  con- 
verting a  municipal  organization  into  a  trading  company,  and  puts  it  in 
tLe  power  of  corrupt  officials  to  involve  a  political  community  in  irro- 
ti'ievable  bankruptcy.  No  such  power  ought  to  exist,  and  in  our  opinion 
no  such  power  does  legally  exist,  unless  conferred  by  legislative  enact- 
ment either  expressed  or  clearly  implied."  Bradley,  J.,  in  Mayors.  Ray, 
19  Wall.  47G,  477.  See,  to  the  same  effect,  Beasley,  Ch.  J.,  in  Hacketts- 
town  V.  Swackharaer,  37  N.J.  L.  191 ;  Agnew,  Ch.  J.,  dissenting  opinion, 
.'1  Williamsport  v.  Commonwealth,  84  Pa.  St.  487,  505;  Knapp  v.  Hobo- 
ken,  39  N.  J.  L.  394;  Gauss  v.  Clarksville,  5  Dill,  C.  C.  165. 

1  Barry  ?;.  Merchant's  Express  Co.,  1  Sandf.  Ch.280;  Curtis  v.  Leavitt, 
:5  N.  Y.  9,  02;  Smith  v.  Law,  21  N.  Y.  29G,  299;  Ketchura  v.  Buffalo,  14 
N.  Y.  356;  Douglass  v.  Virginia  City,  5  Nev.  147;  Municipality?;.  Mc- 
Donough,  2  Rob.  (La.)  242,  250;  Bank  of  Chillicothe  t;.  Chillicothe,  7 
Ohio,  Part  IL,  p.  31;  Sturtevant  v.  City  of  Alton,  3  McLean,  393;  Mul- 
larky  v.  Cedar  Falls,  19  Iowa,  21;  Galena  v.  Corwith,  48  111,  423;  Mills 
V.  Gleason,  11  "Wis,  470;  Clarke  v.  School  District,  3  R.  I.  199;  Adams  v. 
Railroad  Company,  2  Coldw.  (Tenn.)  645;  Clark  v.  Des  Moines,  19  Iowa, 
199.  ''The  foregoing  cases  rest  upon  the  principle,  which  we  think  a 
,  sound  one,  that  Avhere  a  municipal  corporation  has  lawfully  contracted 
a  debt,  it  has  the  implied  power,  unless  restricted  by  its  charter  or  pro- 
hibited by  statute,  to  evidence  the  same  by  a  bill,  bond,  note,  or  other 
instrument;  that  the  power  to  contract  a  debt  carries  with  it  by  neces- 
sary implication  the  right  to  give  an  appropriate  acknowledgment  of  such 
debt,  and  to  agree  with  the  creditor  as  to  the  time  and  mode  of  payment; 
224 


CH.  VIII.]       MUNICIPAL    CORPORATIONS    AS    PARTIES.  §    135 

But  it  must  be  borne  in  mind  that  only  the  bona  fide 
holder  of  commercial  paper  can  claim  to  hold  it  free  from 
equitable  and  other  defenses  not  appearing  on  the  face  of 
the  paper.  No  one  is  or  can  be  a  bona  iide  holder,  who 
has  sufficient  notice  of  defenses  to  put  him  on  his  inquiry 
into  their  character.  When,  therefore,  a  municipal  or 
public  corporation  by  its  ordinance  directs  the  issue  of  a 
certain  amount  of  negotiable  securities,  the  ordinance  being 
a  public  law,  all  those  who  purchase  the  securities  are 
charged  with  notice  of  whatever  appears  in  the  ordinance 
or  in  the  charter,  which  shows  the  issue  of  the  securities  to 
be  beyond  the  authority  of  the  corporation.  For  no  one 
can  take  such  securities  as  a  bona  fide  holder.^ 

§  135.  What  agents  are  authorized  to  hind  the  cor- 
poration. —  It  is  very  well  known  that  the  common  council 
of  a  city  or  town  is  its  legislature,  and  it  therefore  possesses 
the  power  to  authorize  the  execution  and  issue  of  the  obli- 
gations of  the  municipality.  Without  an  express  authoriza- 
tion by  the  council,  no  executive  or  administrative  officer 
can  bind  ^he  corporation  by  the  issue  of  negotiable  se- 
curities in  its  name.     The  mayor  cannot  do  it,^  nor  can  the 

that  in  the  absence  of  any  statutory  provision  tlierc  is  no  rule  of  law  lim- 
iting the  extent  of  the  credit."  Paxson,  J.,  iu  Williamsport  v.  Common- 
wealtli,  84:  Pa.  St.  487,  501.  "  The  power  to  execute  and  issue  bonds, 
contracts  or  other  certificates  of  indebtedness  belongs  to  all  corpora- 
tions, public  as  well  as  private,  and  is  inseparable  from  their  existence. 
It  is  for  this  that  they  hold  a  common  seal.  No  one  would  doubt  that  for 
a  legal  and  authorized  debt  a  municipal  corporation  might  give  i-ts  bond 
under  its  general  corporated  i)owers.  If  a  bond  given  by  such  an  obligor 
l)e  void,  it  is  not  because  of  the  form  of  the  instrument,  nor  because 
general  corporate  powers  do  not  warrant  giving  bonds,  but  because  the 
debt  for  which  the  bond  has  been  given  was  created  without  authority, 
against  law  or  without  law."  Strong,  J.,  in  Commonwealth  ex  rel.  Rain- 
both  V.  Pittsburg,  5  Wright,  284. 

1  See  post^  chapter  on  Rights  of  Bona  Fide  Holders. 

2  Little  Rock  v.  State  Bank,  3  Eng.  (Ark.)  227;  Short  v.  New  Orleans, 
4  La.  Ann.  281'  Goldschmidt  v.  New  Orleans,  5  La.  Ann.  436. 

15  225 


§    13G         MUNICIPAL    CORPORATIONS    AS    PARTIES.       [CH.  VIII. 

trustees  or  selectmen  of  towns  and  villages,^  nor  the  mayor 
and  recorder  of  a  city,^  nor  the  auditor  of  a  city.^  Nor  ia 
there  any  such  implied  power  in  county  judges  or  super- 
visors,* nor  in  the  clerks  of  the  county  courts  and  boards 
of  supervisors,*  nor  in  the  police  jury  of  a  parish.® 

§  13G.  Whether  unauthorized  agents  are  personally 
liable.  — It  is  the  common  rule  of  the  law  of  agency,  that  if 
one  without  authority  represents  himself  to  be  the  agent  of 
another,  or  while  he  is  acting  as  agent  exceeds  the  limits 
of  his  authority,  so  that  his  acts  do  not  bind  the  principal, 
the  agent  is  himself  responsible  to  the  third  person  dealing 
"with  him.  He  is  said  to  guarantee  his  authority  to  act  for 
the  principal.^  But  it  is  different  "with  the  agents  and  of- 
ficers of  governments  and  public  corporations.  Since  their 
power  to  act  for  their  principals  is  a  matter  of  public  law, 
every  one  having  dealings  with  them  is  charged  with  the 
legal  limitations  of  their  agency.  There  is,  therefore,  not 
the  same  reason  to  require  of  the  public  agent  a  guaranty 
that  he  is  acting  with  authority,  for  that  fact  can  be  easily 
ascertained  by  any  one  who  examines  the  law.^  *It  may  be 
Jaid  down  as  a  universal  rule,  that  when  a  public  oflScer, 
acting  under    an  innocent    mistake    of  the  law,   makes  a 

1  Rich  V.  Errol,  51  N.  II.  350;  Lake  v.  Trustees,  4  Deu.  520;  Hubbard 
r.  Towuof  Lyudou,  28  Wis.  674. 

2  Clark  V.  Des  Moines,  19  Iowa  200. 

3  Dana  v.  San  Francisco,  19  Cal.  48G;  People  v.  Gray,  23  Cal.  125; 
Keller  v.  Weeks,  22  Cal.  4C0. 

*  Hyde  V.  County  of  Franklin,  27  Vt.  186;  Daviess  Co.  Court  v. 
Howard,  13  Bush,  102;  People  t;.  Supervisors  El  Dorado  Co.,  11  Cal.  175; 
Chemung  Canal  BanK  v.  Supervisors,  5  Den.  517;  Inhabitants  v.  Weir,  g 
I  lid.  224. 

5  Parcel  v.  Barnes,  25  Ark.  201;  Clark  u.  Polk  Co.,  19  Iowa,  248. 

6  Police  Jury  v.  Britton.  15  Wall.  5C6:  Beannan  v.  Board  of  Police,  42 
23S. 

^  See  ante,  §  84. 

*  Jones,  Indorsee  v.  Le  Torabe,  3  Dall.  384;  Hodgson  v.  Dexter,  1 
Crunch,   345;  Walker  v.  Christian,  21  Gratt.  297. 

226 


CH.  VIII,]       MUNICIPAL    CORPORATIONS    AS    PARTIES.  §     137 

contract  in  the  name  of  the  State  or  of  the  municipal 
corporation,  which  he  was  not  authorized  to  make,  neither 
he  nor  the  State  or  municipality  is  bound  by  the  con- 
tract.^ This  rule  applies  with  its  full  force  to  the  un- 
authorized issue  of  commercial  securities  by  public  agents. 
Another  important  distinction  between  public  and  private 
agents  is,  that  the  powers  of  the  public  agent  are  defined  by 
statute,  and  cannot  be  extended  or  amplified  by  custom,  so 
as  to  enable  such  an  agent,  like  the  private  agent,  to  bind 
his  principal  by  acts  falling  within  the  apparent  scope  of 
the  agent's  authority,  and  without  the  express  limitations. ^ 

§  137.  Form  of  signature  by  public  agents.  —  But  when 
it  is  stated  that  the  public  agent  is  not  personally  liable  on 
negotiable  instruments,  executed  by  him  in  his  official 
capacity,  it  must  be  understood  that  the  fact  of  his  acting 
in  his  official  character  must  appear  upon  the  face  of  the 
instrument,  in  order  to  free  him  from  personal  responsibil- 
ity. If  nothing  appears  on  the  face  of  the  instrument  to 
indicate  the  contrary,  he  is  presumed  to  be  acting  in  his 
personal  character,  and  is  therefore  personally  liable.^  We 
have  already  seen  what  amount  of  technicality  is  observed 
in  determining  whether  the  agent  of  a  private  corporation 
intends  to  bind  himself  or  the  corporation.^  And,  al- 
thouijh  some  of  the  cases,  iijuoringthe  distinction  between 
public  and  private  agents,  apply  the  same  technical  rules 

1  Ogden  V.  Raymond,  22  Conn.  379;  Ives  v.  Hulett,  12  Vt.  314;  Stone 
Huggius,  28  Vt.  617;  Dameron  v.  Irwin,  8  Ired.  L.  421;  Tucker  v.  Jus- 
tices, 13  Ired.  L.  434;  Duncan  v.  Niles,  32  111.  532;  Potts  v.  Henderson,  2 
lud.  327;  Houston  v.  Clay  Co.,  18  Ind.  39C;  Tuclier  v.  Sliorter,  17  Ga. 
(520;  Boardman  v.  Hayne,  29  Iowa,  339;  Hall  v.  Cockrell,  28  Ala.  507; 
Copes  V.  Mathews,  10  Sm.  &  Marsli.  398. 

2  The  Floyd  AccL-ptances,  7  Wall.  6GG;  Whitesides  v.  United  States,  93 
U.  S.  2^7;  Pierce  v.  United  States,  1  N.  H.  270;  Mayer  v.  Eschback,  17 
Md.  282 ;  State  of  Missouri  v.  Bank  of  Missouri,  45  Mo.  528. 

3  Story  on  Agency,  §  30C;  1  Daniel's  Negot  Inst.  §  445. 
*  See  ante,  §§  123-127. 

227 


§     l.)7  MUMCli'AL    COKI'OKATIDNS    AS    I'AIITIES.        [cil.   Alll. 

to  the  tigCDts  of  public  corporulious ;  ^  a  priiiscworthy 
step  is  taken  by  the  other  cases,  in  cutting  away  from  the 
common- Uiw  ruling,  and  holding  that  when  an  official  exe- 
cutes a  negotiable  instrument,  and  adds  his  official  designa- 
tion to  his  signature,  he  undertakes  thereby  to  execute  a 
paper  in  the  name  of  the  public  corporation,  of  which  he  is 
an  officer,  and  does  not  act  in  his  individual  capacity.'' 


1  111  Cahokia  School  Trustees  v.  Rautenburg,  88  111.  219,  the  notes  ran 
"  I  promise  "  and  were  signed  "  A.  &  B.,  trustees."  In  Baylissu.  Peter- 
son, 15  Iowa,  279,  the  note  was  signed  '*  Committeemen  for  the  erection 
of  a  school  house  in  District  No.  1;"  Fowler  v.  Atkinson,  6  Minn.  579, 
("  Trustees  of  School  District  No.  1  ")  ;  Bingham  v.  Stewart,  13  Minn. 
106  (We,  the  trustees  of  School  District  No.  100,"  signed  "A.  B.,  trus- 
tees.") In  these  cases,  the  corporations  are  school  districts,  the  most 
limited  form  of  public  corporations, 

2  luDugau  V.  United  States,  3  Wheat.  172,  a  bill  payable  to  "Thomas 
T.  Tucker,  Ti'easui'er  of  the  United  States "  was  held  to  be  pay- 
able to  the  United  States,  Marshall,  Ch.  J.,  saying:  "If  it  be  gen- 
erally true  that  when  a  bill  is  indorsed  to  the  agent  of  another  for  the 
use  of  his  principal,  an  action  cannot  be  maintained  in  the  name  of  such 
principal  (on  which  point  no  opinion  is  given),  the  government  should 
form  an  exception  to  such  rule,  and  the  United  States  be  permitted  to  sue 
in  their  own  name,  whenever  it  appears  not  only  on  the  face  of  the  in- 
strument, but  from  all  the  evidence,  that  they  alone  were  interested  in 
the  subject-matter  of  the  controversy."  See  also  Balcombe  v.  Northrup, 
9  Minn.  173  (note  payable  to  "  I.  E.  F.  U.  S.,  Indian  agent,  his  successors 
in  office,  or  order,  for  the  use  of  the  Winnebago  tribe,  etc")  ;  Irish  v. 
Webster,  5  Greeul.  171  (to  ''James  Irish,  Land  Agent  of  Maine"), 
United  States  v.  Boyce,  2  McLean,  352 ;  State  v.  Boies,  2  Fairf .  474;  School 
Town  of  Monticello  v.  Kendall,  72  Ind.  208  (37  Am.  Rep.  139,  142,  notes)  ; 
Baker  v.  Chambles,  4  Greene  flowa),  428  ("We,  the  undersigned  direc- 
tors of  School  District  No.  4  promise  "  signed  simply  with  their  names) ; 
Andrews  v.  Estes,  11  Me.  267  (We,  the  undersigned  committee  for  the 
First  School  District,"  etc.,  signed  "A.  B.  &  C,  Committee");  Hodges 
V.  Runyan,  30  Mo.  491  ("The  Presidentof  the  Board  of  School  Trustees, 
promised  in  their  behalf);  McGee  v.  Lararaore,  50  Mo.  425  ("I,  A.  B., 
Director  of  School  Dictrict  No.  2,  promise,"  etc.,  signed  "A.  B.,  direc- 
tor") ;  Randall  v.  Van  Vechter,  19  Johns.  60  (contracts  under  seal  signed 
by  "  A.  B.  C,  a  committee  appointed  by  the  coi-poration  of  Albany  for  the 
purpose");  Fox  v.  Drake,  8  Cow.  191  (contract  signed  by  A.  &  B.  C." 
commissioners  for  building  the  court  house  at  Oswego  village"). 

228 


CH.  VIII.]       MUNICIPAL    CORPORATIONS    AS    PARTIES.  §     138 

§  138.  Drafts  or  warrants  of  one  officer  on  another, 
whether  negotiable. — It  is  a  very  common  custom  for 
officers  of  municipal  and  public  corporations,  who  are  en- 
trusted with  the  power  and  duty  of  making  contracts  for 
the  corporation  which  employs  them,  to  complete  the  con- 
tracts by  executing  and  issuing  drafts  or  warrants  on  the 
disbursing  officer.  The  principal  object  of  these  drafts  or 
warrants  is  to  furnish  the  disbursing  officer  with  the  neces- 
sary vouchers.  They  differ  little  in  character  from  the 
common  forms  of  attestation  of  the  correctness  of  bills  that 
may  be  presented  to  the  corporation.  That  being  the  ob- 
ject of  their  issue,  there  is  no  reason  why  they  should  have 
the  character  of  negotiability.  And  should  the  officer,  au- 
thorized to  issue  the  warrant,  execute  it  in  the  form  of  a 
negotiable  instrument,  he  exceeds  his  powers  and  in  this 
respect    does  not    bind   the   corporation.^     But    while  the 

^  Where  au  auditor  drew  upon  the  treasurer,  Baldwin,  J.,  said:  "We 
think  that  the  plaintiff,  counting  alone  upon  the  county  scrip  or  war- 
rants, as  negotiable  instruments,  evidencing  of  themselves  an  indebted- 
ness on  the  part  of  the  county,  cannot  maintain  his  pretensions.  *  *  * 
The  reason  is  that  the  auditor  had  no  authority  to  draw  a  bill  of  exchange, 
but  he  can  only,  in  certain  cases,  issue  warrants  upon  the  order  of  the 
supervisors,  or  the  allowance  by  the  board,  of  an  account  which  is 
chargeable  as  a  debt  upon  the  county.  The  warrant  is  not  intended  to 
constitute  a  new  debt,  or  evidence  of  a  new  debt,  against  the  county,  but 
is  the  prescribed  means  the  law  has  devised  for  drawing  money  from  the 
county  treasury.  It  may  be  very  true,  that  the  warrant  as  an  open  ac- 
count may  be  assigned,  and  the  assignee  be  protected  as  a  holder  of  a 
claim  against  the  county.  But  this  would  be,  not  because  the  indorse- 
ment of  the  warrant  carried  with  it  the  legal  title  of  the  scrip  to  the 
assignee,  as  an  indorsee  under  the  law  merchant,  but  because  the  trans- 
action would  be,  in  equity,  the  assignment  of  the  debt  on  which  the 
scrip  issued,  and  au  authority  to  the  assignee  to  receive  the  money. 
The  question  here  is,  not  whether  the  county  had  the  power  to  make  a 
bill  of  exchange,  but  whether  the  auditor,  when  under  the  statute  he 
issues  the  warrant,  has  the  power  to  give  it  the  form  and  qualities  of 
such  an  instrument.  We  think  he  has  not,  and  that  the  paper,  as  here 
presented,  has  no  such  effect,  if  indeed  it  was  so  designed."  See  also 
to  the  same  effect,   Camp  v.   Knox  Co.,   3  Lea    (Tenn.),   19'J;   Smith  w. 

229 


§    loS  MUNICIPAL    CORPOUATIONS    AS    PARTIES.        [CH.  VIII. 

authorities  in  the  main  support  the  view  just  exphiined, 
yet  a  few  cases  hohl,  if  the  warrant  be  made  negotiable  in 
form,  by  an  officer  authorized  to  issue  it,  it  will  be  a  good 
negotiable  instrument.^ 

Where  the  warrants  are  held  to  be  vouchers  only,  they 
do  not  bear  interest,  even  after  demand  and  refusal  of  pay- 
ment.- But  where  they  are  regarded  as  negotiable  instru- 
ments, it  is  held  that  interest  begins  to  run  from  the  day 
pa^-ment  was  refused."  ^ 

Cheshire,  13  Gray,  318;  Hydeu.  County  of  Franklin,  27  Vt.  18(5;  Chemung 
Canal  Bauli  v.  Supervisors,  5  Denio,  517;  Wall  v.  County  of  Monroe,  103 
U.  S.  77;  County  of  Ouachita  v.  AValcott,  103  U.  S.  559;  Clark  v.  DfS 
Moines,  19  Iowa,  200;  School  Directors  u.  Fagleman,  76  111.  189;  Stein- 
beck v.  Treasurer,  22  Ohio  St.  U4;  State  v.  Huff,  63  Mo.  288;  Short  r. 
New  Orleans,  4  La.  Ann.  281;  Goldschmidt  v.  New  Orleans,  5  La.  Ann. 
436;  Peoples.  Gray,  23  Cal.  125;  Clark  v.  Polk  Co.,  19  Iowa,  248;  Keller 
V.  Hicks,  22  Cal.  400;  Mayor  v.  Ray,  19  Wall.  478;  Fox  v.  Shipman,  19 
Mich.  218;  Emory  v.  Mariaville,  56  Me.  315;  Sturtevant  r.  Liberty,  40 
Me.  457;  Newell  u.  School  Directors,  68  111.  514;  East  Union  Township 
V.  Ryan,  86  Pa.  St.  459 ;  School  District  v.  Stough,  4  Neb.  357. 

1  In  Kelly  v.  Mayor  of  Brooklyn,  4  Hill,  265,  Cowen,  J.,  said:  "The 
draft  was  signed  and  countersigned  according  to  the  statute,  by  the 
mayor  and  clerk.  There  is  nothing  in  the  statute  expressing  or  implying 
an  inhibition  to  make  the  warrants  negotiable.  *  *  *  Independently 
of  any  statute  provision,  a  corporation  may  issue  negotiable  paper  for 
a  debt  contracted  in  the  course  of  its  proper  business.  Moss  v.  Oakley, 
2  Hill,  205.  This  is  a  power  incident  to  all  corporations,  and  no  provis- 
ion in  its  charter  or  elsewhere,  merely  directing  a  certain  form  in  affirm- 
ative words,  should  be  so  construed  as  to  take  away  the  power.  The 
draft  in  question  was  issued  by  the  agents  of  the  defendants,  acting  ac- 
cording to  the  usual  course  in  such  matters."  See  also  Crawford  County 
V.  Wilson,  7  Ark.  219.  In  Sweet  y.  County  Commissioners,  10  Minn.  107, 
it  was  held  that  the  payment  of  such  a  warrant  to  the  bearer  was  a  good 
defense  to  the  rightful  owner.  And  in  Talty  v.  Freedman's  Ti'ust  Co., 
1  MacArth.  522,  it  was  held  that  notwithstanding  such  a  warrant  is  not 
a  negotiable  instrument  for  other  purposes,  it  is  so  far  negotiable  as  that 
the  payee  cannot  recover  it  of  abonajide  holder,  who  obtained  it  from 
one,  to  whom  it  was  pledged  as  collateral  security,  without  paying  to 
such  holder  the  amount  he  paid  for  it. 

2  Allison  V.  Juniata  County,  50  Pa.  St.  353;  Dyer  v.  Covington  Town- 
ship, 19  Pa.  St.  200. 

2  Commissioners  of  Leavenworth  v.  Keller,  6  Kan.  518. 

230 


CH.  VIII.]       MUNICIPAL    CORPORATIONS    AS    PARTIES.         §     139 

§  139.  Indorsement  or  assignment  of  corporate  drafts 
or  warrants.  — Wherever  the  draft  or  warrant  is  held  to  be 
negotiable,  it  may  be  transferred  by  indorsement,  like  any 
other  negotiable  instrument,  and  the  indorser  is  subject  to 
the  same  liabilities  as  the  indorser  of  a  bill  or  note.^  But 
when  the  character  of  negotiability  is  denied  to  these  in- 
struments, one  who  transfers  one  of  them  does  not  become 
liable  as  an  indorser,  except,  perhaps,  that  he  may  be  made 
to  return  the  consideration  he  received,  if  this  draft  or  war- 
rant proves  to  be  invalid  or  illegal. ^ 

But,  although  as  a  general  rule  these  warrants  are  held  to 
be  non-negotiable,  it  is  universally  conceded  that  they  can, 
in  the  abs^ce  of  express  restrictions,  be  assigned,  like  any 
other  contract,  and  the  assignee  may  recover  of  the  corpo- 
ration in  the  appropriate  action,  whatever  claim  the  assignee 
held  against  it.  But  whether  the  action  can  be  brought  in 
the  name  of  the  assignee  or  in  that  of  the  assignor,  is  differ- 
ently decided  by  the  different  courts.  As  a  matter  of 
course,  if  the  warrant  is  held  to  be  negotiable,  the  indorsee 
can  sue  in  his  own  name.^  But  since  non-negotiable  con- 
tracts were  not  assignable  at  common  law,  the  law  courts  did 
not  recognize  the  assignee,  as  having  any  individual  stand- 
ing in  court,  and  if  suit  is  brought  in  such  a  court  it  must 
be  brought  in  the  name  of  the  assignor.  And  the  courts 
of  equity  would  compel  the  assignors  to  permit  the  use 
of  their  names  in  the  maintenance  of  such  suits.  This  is 
still  the  law  in  all  the  States,  in  which  this  common-law 
rule  has  not  been  changed  by  statute.*     But  in  most  of  the 

1  Bull  V.  Sims,  23  N.  Y.  571. 

2  Keller  v.  Hicks,  22  Cal,  460. 

3  Kelly  V.  Mayor,  4  Hill,  263 ;  Dalrymple  v.  Town  of  Whittingham,  26 
Vt.  345;  Clark  v.  School  Dist.,  3  R.  I.  199;  Moss  v.  Dadley,  2  Hill,  255; 
Justice  V.  Orr,  12  Ga.  137;  Commissioners  of  Leavenworth  v.  Keller,  6 
Kan.  510;  Commissioners  v.  Day,  19  Ind.  450;  Crawford  County  v.  Wil- 
son, 7  Ark.  219.     See  Dively  v.  Cedar  Falls,  21  Iowa,  565. 

*  Hyde  v.  County  of  Franklin,  27  "Vt.  185;  Allison  v.  Juniata  County, 

231 


§     14  )  MLNICllWr,    rOKPORATIONS    AS    PARTIES.        [cil.  VIH. 

States,  the  common-law  ruio  has  now  been  abolished  ;  ami 
there  the  assignees  of  these  corporate  drafts  or  warrants  can 
sue  in  their  own  names;  but  tiiey  cannot  claim  any  privi- 
leges or  exemptions,  to  which  their  assignors  were  not  en- 
titled.^ 


§  140.  Presentment  of  warrants  for  payment.  —  Inas- 
much as  the  warrant  is  an  order  drawn  by  one  corporation 
on  itself,  through  different  agents  or  officers,  it  cannot  be 
treated  as  a  regular  bill  of  exchange ;  and  in  the  case  of 
private  corporations  it  has  been  held  to  be  unnecessar}'  for 
such  a  warrant  to  be  presented  for  payment,  before  the 
corporation  can  be  sued  on  it.^  The  same  •conclusion 
has  been  reached  by  some  of  the  cases  in  reference 
to  the  warrants  of  municipal  and  public  corporations.' 
But  a  different  ruling  has  been  adopted  by  other  cases,  on 
the  ground  ihat  it  was  necessary  to  have  the  warrant  pre- 
sented to  the  disbursing  officer,  in  order  that  he  can  make 
the  proper  arrangement  for  its  payment.  This  would  seem 
to  be  a  very  strong  reason  for  requiring  a  presentment, 
and  the  reason  is  not  confined  to  municipal  corporations. 
All  corporations,  finding  the  use  of  warrants  convenient  or 
necessary,  have  extensive  operations    in  their  charge ;    and 

50  Pa.  St.  353;  Dyer  v.  Covington  Township,  19  Pa.  St.  200;  Smith  v. 
Cheshire,  13  Gray,  318;  Kleiu  v.  Supervisors,  54  Miss.  254. 

-  Sturtevant  V.  Liberty,  40  Me,  459;  Emery  u,  Mariaville,  56  Me.  316; 
Campbell  v.  Polk  Co.,  3  Iowa,  4G7 :  Clark  v.  Des  Moines,  19  Iowa,  199; 
Clark  r.  Polk  Co.,  19  Iowa,  2tS  See  Int.  Bank  v.  Franklin  County,  65 
Mo.  105,  in  which  it  was  lield  that  if  there  be  a  statutoiy  form  of  assign- 
ment, it  must  be  observed. 

^  See  ante,  §  128. 

3  Steel  V.  Davis  County,  2  G.  Green  (Iowa),  4G0.  See  Miller  v  Thomp- 
son, 3  Man.  &  G.  576;  Faircbilcl  v.  Railroad  Co.,  15  N.  Y.  337;  Bull  v. 
Sims,  23  X.  Y.  570;  Justices  v.  Orr,  12  Ga.  137;  Ilarvey  v.  W.  P.  S.  Co., 
1  Doug.  (Mich.)  193;  Clark  v.  Polk  Co.,  19  Iowa,  247;  Dana  v.  San  Fran- 
cisco, 19Cal.  486. 

232 


f  II.  A  III]       MUNICIPAL    C'OKPORATIONS    AS    PARTIES.  §     141 

if  the  warniut  is  not  required  to  be  presented,  its  value  in 
the  facilitation  of  the  corporate  business  is  greatly  im- 
paired.^ 

§    141.  Warrants  payable  out  of  particular  fund.  —  If 

a  warrant  is  directed  to  be  paid  out  of  a  particular  fund,  it 
creates  a  charge  against  that  particular  fund,  and  not  against 


1  In  Varner  v.  Nobleborough,  4  Greenl,  126,  where  the  selectmen 
drew  upon  the  town  treasurer,,  RIelleu,  C.  J.,  said:  "The  selectmen 
were  the  agents  of  the  town,  drawing  the  order  on  their  account  on  the 
town's  banker.  The  case  may  be  justly  compared  to  that  of  a  draft  by 
a  man  on  his  banker,  or  a  note  payable  at  his  banker's,  or  by  his  agent. 
In  which  cases  it  seems  settled  that  the  draft  or  note  must  be  presented 
at  the  place  appointed  But  in  addition  to  the  authority  of  decided  cases, 
so  nearly  resembling  this  in  principle,  a  strong  argument  against 
the  present  action  arises  out  of  the  general,  — perhaps  we  may  say,  the 
universal  —  mode  of  conducting  the  affairs  of  a  town  in  the  settlement 
of  accounts  and  payment  of  debts  due  from  the  corporation  to  individuals. 
Persons  transacting  business  according  to  an  established  and  well- 
known  usage,  are  presumed  to  assent  to  such  usage  and  contract  in  refer- 
ence to  it.  Now  it  is  universally  understood  that  selectmen,  who  draw 
an  order  on  behalf  of  the  town  in  favor  of  any  of  their  creditors,  have  not 
the  funds  of  the  town  in  theii;  hands,  but  that  they  are  in  possession  of 
the  treasurer.  When  any  creditor  of  the  town  receives  an  order  on  the 
treasurer  for  the  amount  due  to  him,  he  must  be  considered  as  under- 
standing these  facts  and  assenting  to  this  mode  of  receiving  payment, 
and  as  accepting  the  order  under  an  implied  engagement  to  conform  to 
the  establislied  usage,  and  present  the  order  to  the  treasurer  for  pay- 
ment. Good  faith  requires  him  to  do  this,  and  the  law  considers  him 
as  promising  so  to  do.  If,  on  presenting  the  order,  payment  be  refused, 
the  town  which  drew  the  order  on  itself  must  be  answei-able  instanter, 
for  the  reason  before  assigned.  But  no  sound  reason  can  be  given  why 
a  town  should  be  subjected  to  the  perplexity  and  costs  of  an  action,  be- 
fore the  payee  of  an  order  will  give  himself  the  trouble  to  do  his  duty 
and  request  payment  of  the  money  due  him  according  to  the  terms  of  it. 
"We  have  no  reason  to  believe  but  that  the  contents  of  the  order  would 
have  been  promptly  paid  on  application  at  the  treasury.  Justice,  as 
well  as  law,  are  against  the  plaintiffs  according  to  the  facts  before  us.  " 
See  also  Pease  v.  Cornish,  19  Me.  193;  East  Union  v.  Ryan,  86  Pa.  St. 
io'J;  Dalrymple  v.  Whittinghani,  26  Yt.  346;  Central  v,  Willcoxen,  3  Col. 
5C6;  Kelly  v.  Mayor,  4  Hill,  265. 

233 


^     142  MUNICIPAL    COKPOKATIONS    AS    PARTIES.       [cil.  Mil. 

the  corporation  in  general.^  But  a  distinction  is  made  by 
the  authorities  between  making  a  warrant  payable  only 
out  of  a  particular  fund,  and  indicating  the  source  from 
which  the  money  is  to  come.  In  the  latter  case,  it  is  held 
that  the  warrant  creates  a  general  charge  against  the  cor- 
poration.^ 

§  142.  Suit  on  original  indebtedness. — Because  it  is 
,uio  custom  of  a  municipal  or  public  corporation  to  liqui- 
date its  indebtedness  by  the  issue  of  warrants  on  its  treas- 
urer, is  no  reason  why  the  creditor  is  compelled  to  accept 
payment  in  that  form.^  He  may  refuse  to  accept  anything 
but  legal  tender.  But  if  he  does  accept  the  warrant,  his 
acceptance  of  it  constitutes  an  implied  consent  to  this  mode 
of  payment,  and  he  could  not  afterward  demand  payment  of 
the  debt,  without  producing  the  warrant  or  offering  satis- 
factory proof  of  its  destruction  or  its  loss.*  And  if  in  any 
case  payment  should  be  made,  without  a  cancellation  of  the 
warrant,  a  bona  fide  holder  could  not  recover  on  the  war- 
rant in  any  State  where  the  warrant  is  denied  to  be  a 
neijotiable  instrument.'' 


1  Lake  v.  Trustees,  4  Den.  520  C"  and  charge  the  same  to  acconnt  of 
Union  Avenue) ;  Kingsberry  v.  Pettis  County,  48  Mo.  207  (payable  out 
of  "  the  road  and  canal  fund  ").  But  if  the  particular  fund,  out  of  -fthich 
the  -warrant  was  to  be  paid,  fell  short  because  of  the  peculation  or  mis- 
application of  an  officer,  the  holder  of  the  warrant  will  have  his  appro- 
priate claim  against  the  general  funds  of  the  corporation,  to  the  amount 
of  the  particular  fund  thus  lost  through  the  wrongful  acts  of  the  officer. 
State  V.  Pilsbury,  30  La.  Ann.  705. 

2  Pease  V.  Cornish,  19  Me.  191  ("it  being  his  proportionate  part  of 
i he  surplus  revenue  fund")  ;  Kelley  t?.  Mayor,  4  Hill,  2G3  ("For  award 
No.  7,  and  charge  to  Bedford  Road  Assessment  "). 

3  Benson  v.  Carmel,  8  Greenl.  110;  Willoy  v.  Greenfield,  30  Me, 
4.-i2. 

<  Commissioners  of    Floyd    County  v.    Day,  19  lud.    451;    Sweet    v 
Carver  County,  IG  Jlinn.  107;   Crawford  County  v.  Wilson,  7  Ark.  219. 
*  Chauniug  Canal  Bank  v.  Supervisors,  5  Den.  517. 

234 


CH.  VIII.]       MUNICIPAL    CORPORATIOXS    AS    PARTIES.  §     142 

But  if  the  warrant  has  been  issued  without  authority,^ 
or  it  has  been  presented,  and  payment  refused,  then  it  is 
held  that  suit  may  be  brought  on  the  original  indebted- 
ness. And  where  the  officer  had  neither  an  express  nor  an 
implied  authority  to  issue  the  warrant,  it  cannot  be  made 
even  the  prima  facie  ground  of  recovery.^ 

1  Allisou  V.  Juniata  County,  50  Pa.  St.  353.  See  Dana  v.  San  Fran- 
cisco, 79  Cal.  491. 

*  Allison  V.  Juniata  County,  50  Pa.  St.  353. 

235 


CHAPTEE    IX. 

TRUSTEES,    GUARDIANS    AND    PERSONAL    REPRESENTATIVES 

AS  PARTIES. 

Section  145.  Trustees  and  guardians  as  parties. 
l-tG.  Personal  representatives  as  parties. 

147.  "Wliat  consideration  necessar}-   to   bind   personal  repre- 

sentatives. 

148.  Tlie  executor  or  admiuisti'ator  as  payee  and  iudorser. 

§  145.  Trustees  and  Guardians  as  parties.  — Trustees 
and  guardians  have  not  the  power  to  bind  the  estates  they 
have  in  charge  by  any  note  or  bill  which  they  may  attempt 
to  issue  in  their  representative  capacity.  And  they  will  be 
personally  liable  on  any  commercial  paper  which  they  may 
issue,  even  though  they  stipulate  in  the  paper  that  they  are 
acting  as  trustee  or  guardian.^  But,  although  the  trustee 
or  guardian  will  be  personally  liable  on  a  note  or  bill,  even 
where  it  has  been  given  on  a  consideration  accruing  to  the 
estate,  yet  in  such  a  case,  as  between  himself  and  the  es- 
tate, he  could  lay  claim  to  reimbursement  to  the  amount  of 
the  benefit  derived  therefrom  by  the  estate. ^     So,  also,  if 

1  Poster  V.  Puller,  6  Mass.  58;  McGavock  v.  Whitfield,  45  Miss.  452: 
ShifE  V.  Sliiff,  20  La.  Ann.  2G0;  Tlialclier  v.  Dinsmore,  5Mass.  29"J; 
Conner  v.  Clark,  12  Cal.  1G8;  Hills  v.  Banister,  8  Cow.  31.  But  see 
Taylor  r.  Slieltou,  30  Conn.  122.  And  in  the  suit  on  such  paper,  it  will 
be  no  error  to  allege  that  it  is  the  individual  paper  of  the  trustee  or 
guardian.     See  Robertson  v.  Banks,  1  Smcdes  &  I\l.  CGG. 

2  Poole  V.  Williams,  42  Ga.  539;  Gibson  v.  Irby,  17  Tex.  173;  Mc- 
Daniel  v.  Mann,  25  Tex.  101.  But  in  Louisiana,  it  njay  be  shown  by 
parol  evidence  that  the  paper  was  issued  for  the  benefit  of  the  estate ; 
and  when  this  fact  is  established  by  parol  evidence  or  otherwise,  the  es- 
tate will  be  charged  with  its  payment,  instead  of  tlie  trustee  or  guardian. 
Johnson's  Succession,  4  La.  Ann.  253;  Leonard  u.  Hudson,  12  La.  Ann 
840;  Lapeyrs  v.  Weelis,  28  La.  Ann.  6G4. 

236 


CH.  IX.]       PERSONAL    REPRESENTATIVES    AS    PARTIES.        §    145 

the  guardian  or  trustee  promises  to  pay  the  note  or  other 
commercial  paper  out  of  the  funds  of  the  estate,  he  will 
only  be  liable  if  there  are  such  funds,  and  he  fails  to  make 
the  appropriation  of  them  which  he  has  promised.  But 
such  a  limitation  of  the  liability  of  the  maker  would  destroy 
the  negotiability  of  the  paper. ^ 

In  the  same  manner  it  has  been  held  that  drafts,  signed 
by  commissioners  as  such,  are  binding  upon  them  individu- 
ally.^  The  same  rule  has  been  followed  in  the  case  of  a 
note  indorsed  or  signed  by  some  one  as  "  receiver."  ^ 

But  when  a  note  or  bill  is  made  payable  to  a  trustee  or 
guardian,  as  such,  the  authorities  are  at  variance  in  respect 
to  the  character,  in  which  he  takes  the  paper. .  According 
to  some  of  the  authorities,  the  express  description  of  the 
payee  as  trustee  or  guardian,  makes  it  impossible  for  any 
one  to  acquire  the  rights  of  a  bona  fide  holder,  after  a  mis- 
appropriation of  the  paper  by  the  fiduciary  payee.  Any 
transfer  of  the  paper  will  be  made  subject  to  the  trust.* 
And  the  authorities  are  all  ag-reed  that  the  trustee  or  suard- 
ian  cannot  pass  a  good  title  to  paper,  payable  to  him  in  his 
representative  capacity,  in  liquidation  of  his  own  private 
debts.  The  indorsee  in  such  a  case  would  take  the  paper 
charged  with  the  trust.* 

On  the  other  hand,  if  a  note  is  made  payable  to  a 
guardian  as  such,  the  debts  of  the  ward  constitute  a  good 
set-off  in  an  action  on  the  note.^  But  when  the  commer- 
cial paper,  so  misappropriated,  passes  into  the  hands  of 

1  1  Parsons'  N.  &  B.  90;   1  Daniel's  Negot.  Inst.,  §  271. 

2  Eaton  V.  Bell,  5  B.  &  Ad.  34. 

3  Towne  v.  Rice,  122  Mass.  67.  Seeposf,  on  the  subject  of  receiver's 
cei'tificates. 

*  Third  Nat.  Bank  v.  Lange,  51  Md.  138;  Sturtevant  v.  Jaques,  14 
Allen,  523;  ShaTT  v.  Spencer,  100  Mass.  382.  In  the  last  case  the  paper 
was  a  certificate  of  stock. 

*  Coons  V.  Kendall,  27  La.  Ann.  443;  Baughn  v.  Shackleford,  48  Miss. 
255. 

8  Nickerson  v.  Gilliam,  29  Mo.  456. 

237 


§     lit!       TEUSONAL    KKl'KESENTATIVES    AS    PARTIES.       [CH.  IX. 

an  innocent  purchaser,  "who  has  no  actual  notice  of  the 
fraud,  it  is  held  by  many  cases  in  opposition  to  the 
cases  cited  above,  that  the  bona  fide  holder  takes  the  paper 
free  from  the  trust,  and  he  is  not  charged  with  constructive 
notice,  because  the  original  payee  has  been  designated  as 
trustee  or  guardian.^  And  to  such  an  extent  do  the  courts 
go  in  recognizing  tlie  proprietary  interest  of  the  guardian 
or  trustee  in  the  paper  made  payable  to  him  as  such,  that 
they  hold  he  can  sue  upon  it  in  his  own  name,  and  in  his 
own  right,  even  though  the  term  of  his  office  has  expired ;  ^ 
and  that  after  his  death  suit  can  be  brought  on  it  by  his 
executor.^  But  if  a  note  is  made  payable  to  the  ward, 
the  guardian  cannot  surrender  it  for  a  worthless  security.* 

If  a  note  or  bill  is  made  payable  to  the  guardian  individ- 
ually, although  the  ward  may  show  that  the  note  was  based 
upon  a  consideration  moving  from  his  estate,  yet  in  cage 
the  maker  of  the  note  becomes  insolvent,  it  has  been  held 
that  the  guardian  cannot  prove,  in  order  to  throw  the  loss 
on  the  estate,  that  the  note  was  taken  by  him  as  guardian.^ 

It  has  also  been  held  that  where  the  payee  was  described 
as  "the  lawful  attorney  of  A.,  widow  of  D.,  deceased," 
he  could  sue  on  it  in  his  own  name.^ 

§  146.  Personal  representatives  as  parties.  —  The  ex- 
ecutor or  administrator  of  a  decedent  has  no  power  to  bind 
the  hitter's  estate  by  any  note  or  bill  which  he  may  make 
in  his  representative  capacity.^     So,  also,  is  it  impossible 

'  Thorton  v.  Rankin,  19  Mo.  193;  Fountain  v.  Anderson,  33  Ga,  372; 
Westmoreland  v.  Foster,  60  Ala.  448.  See  Field  v.  SchiefEelin,  7  Johns. 
Ch.  150. 

2  Zachary  v.  Gregory,  32  Tex.   452;  Bingham  v.  Calvert,  13  Ark.  399. 

3  Chitwood.u.  Cromwell,  12  Heisk.  G58. 
*  Smith  V.  Dibfell,  31  Tex.  239. 

«  Knowltonv.  Bradley.  17  II.  11.  458. 
e  Austell  v.  Rice,  5  Ga.  472. 

^  Curtis  V.  National  Bank,  39  Ohio  St.  579;  Lynch  v  Kirby,  65  Ga.  279; 
238 


CH.  IX.]   PERSONAL  REPRESENTATIVES  AS  PARTIES.   §  146 

for  the  executor  or  administrator  to  bind  the  estate  by  the 
acceptance  of  a  bill  drawn  in  settlement  of  a  claim  against 
the  estate.^  In  all  such  cases,  the  executor  or  administra- 
tor is  personally  liable,  even  though  the  signature  is  stated 
in  the  most  explicit  manner  to  have  been  made  in  his  rep- 
resentative character.^ 

But  the  giving  of  a  note  by  the  executor  or  administra- 
tor for  a  debt  of  the  estate  does  not  release  the  estate  from 
liability  on  the  original  indebtedness,^  unless  the  note  has 
been  accepted  as  absolute  payment  of  the  original  debt.* 
And  if  the  executor  or  administrator  expressly  limits  his 
obligation  to  payment  out  of  the  assets  of  the  estate,  his 
liability  does  not  extend  beyond  the  obligation  to  appropri- 
ate the  funds  of  the  estate  to  the  payment  of  this  debt.*^ 

Funderburk  v.  Goroam,  46  Ga.  296.  The  estate  is  not  bound,  even  when 
the  executor  gives  his  note,  in  the  renewal  of  the  note  of  the  testator,  or 
in  payment  of  goods  purchased  by  him  under  a  testamentary  power. 
Cornthwaite  v.  First  Nat.  Bank,  57  Ind.  2C8;  Erwin  v.  Carroll,  1  Yerg. 
144 ;  Christian  v.  Morris,  50  Ala.  585. 

1  Wisdom  V.  Becker,  52  111.  342. 

■*  Tassey  v.  Church,  4  Watts  &  S.  346;  Funderburk  v.  Gorham,  46  Ga. 
296;  McFarlin  v.  Stinson,  56  Ga.  396;  Harrison  v.  McClelland,  57  Ga.  531; 
Winthrop  u.  Jarvis,  8  La.  Ann.  434;  Beatty  v.  Tete,  9  La.  Ann.  129; 
Kirkman  v.  Benham,  28  Ala.  501 ;  Christian  v.  Morris,  50  Ala.  585;  Corn- 
thwaite V.  First  Nat.  Bank,  57  Ind.  268;  Rittenhouse  v.  Ammerman,  64 
Mo.  197;  Erwin  v.  Carroll,  1  Yerg.  144;  Gregory  v.  Leigh,  33  Tex.  813; 
Aspinwall  v.  Wake,  10  Bing.  55;  McElderry  v.  Chapman,  2  Port.  (Ala.)33; 
Trydn  v.  Oxley,  3  Iowa,  289;  Davis  v.  French,  20  Me.  21;  Sims  v.  Still- 
well,  3  How.  (Miss.)  176;  Walker  v.  Patterson,  36  Me.  273;  McKinney  ??. 
Peters,  Dallam,  545;  Kessler  v.  Hall,  64  N.  C.  60;  Livingston  v  Gaussen, 
21  La.  Ann.  286;  Wightman  v.  Townroe,  1  M.  &  S.  412. 

^  Douglas  V.  Eraser,  2  McCord  Ch.  105;  Dunne  v.  Deery,  40  Iowa,  251, 

*  Yerger  v.  Foote,  48  Miss.  62;  Erwin  v.  Canol,  1  Yerg.  144;  Corn- 
thwaite V,  First  Nat.  Bank,  57  Ind.  269;  Carter  v.  Thomas,  3  Ind.  213; 
Wisdom  V.  Becker,  52  111.  346.  Where  the  only  consideration  to  the  note 
of  the  administrator  or  executor  is  the  possession  of  assets  of  the  estate, 
it  is  held  that  action  may  always  be  brought  against  the  estate,  even  on 
the  note.  Faxon  v.  Dyson,  1  Cranch  C.  C.  441;  Dixon  v.  Ramsey,  1 
Cranch  C.  C.  472. 

*  Child  V.  Monins,  2  Brod.  &  B.  460;  Ridout  v.  Bristow,  1  Tvrw.  90;  1 

239 


§    147       I'ERSONAL    KEPRE8ENTATIVKS    AS    PARTIES.        [CH.  IX. 

But  in  this  case,  the  instrument  is  not  negotiable,  for  the 
reason  that  it  is  payable  out  of  a  particular  fund.  ^ 

§  147.  AVhat  consideration  necessary  to  bind  personal 
representatives. —  If  there  is  no  new  consideration  sup- 
porting the  promise  of  the  executor  or  administrator,  like 
any  other  promise,  it  is  void  and  not  binding.  And  the 
note  of  an  administrator  was  held  to  be  void  for  the  want 
of  a  consideration,  which  was  declared  to  be  "  for  value 
received  by  A.  (the  intestate)  and  his  heirs."  ^  The  ex- 
press declaration  of  an  impossible  consideration  rebut- 
ted all  presumptions  of  the  existence  of  a  sufficient  con- 
sideration. But  as  a  general  rule  the  law  will  presume 
a  sufficient  consideration  in  all  such  cases,  until  the  con- 
trary is  shown  to  be  true;  at  least,  it  is  alwaj's  presumed 
that  the  executor  or  administrator  has  sufficient  assets  of 
the  estate  in  his  hands,  when  he  made  the  note  or  bill.^ 
But  this  presumption  may  be  rebutted  by  proper  testi- 
mony ;  and  if  the  note  or  bill  is  not  supported  by  any  other 
consideration,  the  personal  representative  cannot  be  held 
liable  on  it.  His  liability  is  limited  in  such  a  case  to  the 
amount  of  assets  in  his  possession.* 

Cromp.  &  J.  231 ;  King  v.  Thorn,  1  T.  R.  480;  Serle  v.  Waterworth,  4  M. 
&  W.  9;  s.  c.  6Dovvl.  684;  Liverpool  Borough  Bank  v.  Wallier,  4  T)e  G.  & 
J.  24;  Bank  of  Troy  v  Topping,  9  Wend.  273;  Snead  v.  Coleman,  7  Grat. 
303;  Carters.  Sanders,  2  How.  (Miss.)  851;  Kirkmant;.  Benham,  28  Ala. 
501.  Merely  describing  himself  as  "  executor  "  or  "  administrator  "  is, 
however,  not  sufficient  to  impose  this  limit  on  his  liability.  Tryon  v. 
Oxley,  3  G.  Greene,  (Iowa),  289. 

1  See  ante,  §  2G,  and  cases  cited  in  preceding  note. 

2  Ten  Eyck  v.  Vanderpoel,  8  Johns.  93. 

s  Bank  of  Troy  v.  Topping,  13  Wend.  557;  Rittenhouse  v.  Ammerraan, 
64  Mb.  107. 

*  Davis  V.  French,  20  Me.  21;  Walker??.  Patterson,  36  Me.  273;  Bank 
of  Troy  v.  Topping,  13  Wend.  273;  Ruclcer  t\  Wadlington,  5J.  J.  Marsh- 
238;  Byrd  v.  Ilolloway,  6  Sra.  &  M.  199;  Steele  v.  McDowell,  9  Sm.  &  M. 
193;  Rittenhouse  v.  Ammermau,  C4  Mo.  107. 
240 


CH.  IX.]       PEKSOiVAL    REPRESENTATIVES    AS    PARTIES.       §     148 

Some  other  consideration  than  the  original  indebtedness 
of  the  decedent  is  always  necessary.  But  where  the  note 
of  the  decedent  is  surrendered  and  cancelled,  and  espe- 
cially where  the  executor  or  administrator,  in  making  his 
note  as  a  substitute  for  the  note  of  the  deceased,  has  the 
time  of  payment  extended,  or  receives  some  other  indul- 
gence, there  is  sufficient  consideration  present  to  make  the 
obligation  absolute,  and  independent  of  the  possession  of 
assets.^  But  if  the  note  or  other  instrument  of  indebted- 
ness is  negotiable,  the  question  of  consideration  can  only 
be  inquired  into,  as  a  defense,  as  long  as  the  paper  has  not 
passed  into  the  hands  of  an  indorsee  for  value  and  without 
notice.  As  against  such  an  indorsee,  the  presumption  of 
consideration  becomes  conclusive.^ 

§  148.  The  executor  or  administrator  as  payee  and  in- 

dorser.  —  Where  a  note  or  bill  is  made  payable  to  an 
executor  or  administrator  as  such,  he  has  his  election  to 
treat  it  as  assets  of  the  estate  or  as  his  own  property.  If 
he  treats  the  paper  as  assets,  he  can  sue  on  it  in  the  charac- 
ter of  an  executor,  and  join  in  the  same  action  counts  upon 
the  promises  made  to  the  executor  in  his  life  time.^  And 
if  the  executor  or  administrator  should  die  or  resign  from 
his  office  without  bringing  suit  on  such  paper,  the  adminis- 
trator debonis  non  is  the  proper  party  to  bring  the  action.* 
But  if  the  executor  or  administrator  should  elect  to  treat 

1  Thompson  v.  Maugh,  3  Iowa,  342;  Mosely  v.  Taylor,  4  Dana,  543; 
Harrison  v.  McClelland,  57  Ga.  531.     See  Hester  v.  Wesson,  6  Ala.  415. 

2  Bank  of  Troy  v.  Topping,  13  Wend.  273;  Rucker  v.  Wadlington,  5 
J.  J.  Marsh.  238;  Byrd  v.  Holloway,-  6  Sm.  &  M.  199;  Steele  t?.  McDowell, 
9Sm.  &M.  193.     See  posf,  §  154. 

3  Bogert  V.  Hertell,  4  Hill,  503;  King  v.  Thorn,  i;t.  R.  487;  Sheets  v. 
Pabody,  6  Blackf.  120;  Fry  v.  Evans,  8  Wend.  530.  See  Baker  v.  Baker, 
4  Bibb,  346;  Hemphill  v.  Hamilton,  11  Ark.  425. 

*  Catherwood  v.  Chapand,  1  B.  &  C.  150  (2  Dowl.  &  R.  271)  ;  Sheets  v. 
Pabody,  6  Blackf.  120;  Court  v.  Partridge,  7  Price,  591;  Leach  u.  Lewis, 
38  Ind.  155. 

16  241 


§     148       PERSONAL    IJKPRESENTATIV^ES    AS    I'AUTIES.        [Cll.   IX. 

^^^luh  pa[)ci-  as  his  own  property,  he  cjin  sue  ou  it  in  his  own 
name.^  And  in  the  event  of  the  death  of  the  executor  or  ad- 
ministrator the  right  of  action  would  pass  to  his  personal 
representative  and  not  to  the  administrator  de  bonis  non  of 
the  estate.^  But,  of  course  in  every  such  case,  the  executor 
or  administrator  is  himself  accountable  to  the  estate,  and 
must  charge  himself  with  the  amount  of  the  paper,  before 
he  can  become  the  absolute  owner  of  it.^ 

AYhere  the  bill  or  note  is  made  payable  to  the  decedent 
durmg  his  life  time,  it  comes  into  the  possession  of  the 
representative,  like  every  other  species  of  personal  prop- 
erty. He  is  required  and  authorized  to  do  with  it,  what- 
ever the  deceased  could  or  should  have  done;  ^  but,  as  a 
matter  of  course,  he  could  bring  suit  on  these  instruments 
only  in  his  representative  capacity. 

Whether  the  note  or  bill  is  made  payable  to  the  decedent 
or  to  the  personal  representative  as  such,  in  either  case  the 
personal  representative  has  the  right  to  transfer  it.  If  the 
instrument  is  non-negotiable,  the  act  of  transfer  is  an  as- 
signment ;  and  if  the  instrument  is  negotiable,  it  can  only 
be  transferred  by  indorsement.^     And  unless  the  personal 

1  Cravens  v.  Logan,  7  Ark.  105;  Thomas  v.  Relfe,  9  Mo.  373;  Gilman 
V.  Horsley,  5  Mart.  (x.  s.)  6G1;  Clampit  v.  NeTvport,;8  La.  Ann.  124;  Car- 
ter V,  Saunders,  2  How.  (Miss.)  831. 

'  Hemphill  v.  Hamilton,  11  Ark.  425;  Cravens  v.  Logan,  7  Ark.  103. 

3  Dunlap  V.  Newman,  47  Ala.  429;  Buiew.  Pollock,  54  Miss.  9. 

<  King  V.  Thorn,  1  T.  R.  487.  And  this  is  also  true  of  a  bill  or  note, 
which  is  made  payable  to  the  deceased,  and  executed  after  his  deatii, 
but  in  ignorance  of  it.  Murrey  v.  East  India  Co.,  5  B.  &  Aid.  (7  E.  C. 
L.  R.J  204 ;  Morse  v.  Clayton,  13  Sm.  &  M.  373.  And  Mr.  Parsons  thinks 
this  would  also  be  the  case,  if  it  were  done  with  knowledge  of  the 
death  of  the  payee,  since  this  could  not  be  done  with  any  other  intention 
than  to  place  it  in  the  hands  of  the  personal  representative.  1  Parsons' 
N.  &  B.  154.     But  see  Valentine  v.  Hollomau,  63  N.  C.  475. 

5  Rowlinsonr.  Stone,  3Wils,  1;  Cahoun  v.  Moore,  11  Vt.  604;  Grace 
V.  Hannah,  6  Jones  L.  94;  Cryst  v.  Cryst,  1  Smith  (Iiid)?  370;  Morse  v. 
Clayton,  13  Sm.  &  M.  373;  Taylor  v.  Surget,  14  Hun,  IIG;  Owen  v. 
242 


CH.  IX.]       PERSONAL    REPRESENTATIVES    AS    PARTIES.       §     148 

representative  exempts  himself  by  an  express  limitation  he 
becomes  personally  liable  as  an  indorser,  if  payment  should 
be  refused.^  But  an  executor  or  administrator  cannot  in 
any  case  transfer  notes  and  bills  payable  to  himself  as 
such  or  to  the  decedent,  in  payment  of  a  debt  of  his 
own,  or  in  payment  of  property  purchased  by  him. 
And  where  he  has  attempted  to  do  this,  the  notes  and 
bills  thus  illegally  disposed  of  can  be  recovered  of  any 
indorsee  who  takes  them  with  notice  of  the  fraud. ^  It  is 
not  necessary  that  the  indorsee  should  have  actual  notice, 
in  order  to  destroy  his  good  faith.  He  is  charged  with 
notice  of  the  trust  by  the  fact  that  the  instruments  are 
made  payable  to  the  personal  representative  as  such.^ 

It  is  the  general  rule  that  if  a  note  or  bill  is  made  pay- 
able to  a  decedent,  any  one  of  his  representatives  may 
indorse  it  without  the  others  joining  in  the  act.*  But  it 
has  been  held  that  if  a  note  or  bill  is  payable  to  the  per- 
sonal representatives,  all  must  join  in  the  indorsement.^ 

An  indorsement  is  of  no  value,  unless  there  has  been  a 
delivery  of  the  paper.  It  is  altogether  nugatory  without 
delivery.  Where,  therefore,  a  payee  indorses  the  paper 
and  dies  without  delivery,  his  personal  representative 
cannot  pass   title,  merely   by  delivering    the   paper.     He 

Moody,  29  Miss.  79;  Makepeace  v.  Moore,  10  111.  474;  Hanrick  v.  Craven, 
39  Incl.  241;  Clark  v.  Moses,  50  Ala.  326. 

1  Foster  v.  Fuller,  6  Mass.  58. 

2  Scott  V.  Searles,  7  Sm.  &  M.  498;  Booyer  v.  Hodges,  45  Miss.  78; 
Barwick  v.  White,  2  Del.  Ch.  284;  Miller  v.  Williamson,  5  Md.  219;  Mil- 
ler x;.  Helm,  2  Sm.  &  M.  687;  Makepeace  v.  Moore,  10  111.  474. 

8  Payne  v.  Flouruoy,  29  Ark.  500;  Miller  v.  Williamson,  5  Md.  219; 
Booyer  v.  Hodges,  45  Miss.  78 ;  Miller  v.  Helm,  2  Sm.  &  M.  687. 

*  Hertell  k.  Bogert,  9  Paige,  52;  Wheeler  v.  Wheeler,  9  Cow.  34;  Mos- 
ley  r.  Graydon,  4  Strob.  7;  Sanders  v.  Blaine,  6  J.  J.  Marsh.  446;  Dwight 
t-.  Newell,  15111.  333. 

5  Smith  V.  Whiting,  9  Mass.  334.  See  Johnson  v.  Maugum,  65  N.  C- 
146.     But  see  contra,  Bogert  v.  Hertell,  4   Hill,  492;  1  Parsons'  N.  &B. 

ir.:.,  159, 

243 


§     148       rEKSONAL    KEl'KKiSENTATIVKS    AS    I'AUTIES.        [cil.    IX. 

must  also  indorse  it  himself.^  On  the  other  hand,  if 
the  decedent  has  delivered  the  note  or  bill  with  an 
agreement  to  subsequently  indorse  it,  and  he  either  failed 
or  refused  to  indorse  according  to  the  agreement,  his  per- 
sonal representative  may  in  an  action  for  specilic  perform- 
ance be  compelled  to  make  the  indorsement,  since  the 
delivery  was  sufficient  without  indorsement  to  pass  the 
equitable  title. ^ 

'  Clark  V.  Sigourney,  17  Conn.  511;  Michigan  Ins.  Co.  v.  Lcaven- 
-n-orth,  30  Vt.  11;  Clark  v.  Boyd,  2  Ohio,  5(5;  Taylor  v.  Surget,  21  N.  Y. 
S.  C.  (14  Hun)  116;  Bromage  v.  Lloyd,  1  Exch.  32. 

2  Malbon  v.  Southard,  36  Me.  147;  Smith  v.  Pickery,  Peake,  50;  Wat- 
kins  V.  Maule,  2  J.  &  W.  237. 

244 


•       CHAPTER    X. 

THE  CONSIDERATION. 

Section  151.  The  necessity  of  consideration. 

152.  What  instruments  import  a  consideration. 

153.  What  liabilities  presumed  to  be  included  in  the  consid- 

ation. 

154.  Between  whom  question  of  consideration  may  be  raised. 

155.  Real  and  apparent  relation  of  parties. 

156.  To  whom  consideration  must  be  given. 

157.  When  one  consideration  answers  for  more  than  one  party. 

158.  Accommodation  paper. 

159.  Kinds  of  consideration,  good  and  valuable. 

160.  Donatio  mortis  causa  of  one's  own  paper. 

161.  Subscriptions  to  charital)le  objects. 

162.  Moral  obligations,  when  sufficient. 

163.  Money  considerations  —  Contemporary  loans  and  future 

advances. 

164.  Existing  debts  as  a  consideration. 

165.  Existing  debts,   consideration   for  indorsement  of  com- 

mercial paper. 

166.  Commercial  paper  as  collateral  security. 

167.  When  agreement  for  delay  may  be  implied  as  the  consid- 

eration. 

168.  Every  pledge  of  commercial  paper  founded  upon  sufficient 

consideration. 

169.  The  New  York  decisions. 

170.  Consideration  being  debt  of  another. 

171.  Valuable  considerations  other  than  money. 

172.  Transfer  of  property  —  Contingent  and  equitable  interests. 
172a.  Transfer  of  commercial  paper. 

173.  Contract  for  services. 

174.  Release  of  legal  liabilities  — Compromises. 

175.  Forbearance  and  extension  of  time  of  payment. 

176.  Indemnity  as  a  consideration. 

177.  Illegal  considerations. 

178.  The  effect  of  illegality  on  bona  fide  holders. 

179.  Partial  illegality  of  consideration. 

180.  Effect  oi  a  renewal  on  illegal  considerations. 

245 


§     I'll  Tin-:    CONMDKl'.ATKJN.  [ClI.   X. 

SiXTiox  181.  Equitable  relief  to  maker   on   ac-couiit   of   illeiral  consid- 
eration. 

182.  Wliat  are  illegal  cousi derations. 

183.  Compounding  of  crimes  and  misdemeanors. 

184.  Contracts  with  alien  enemies  and  iu  aid  of  rebellion. 

185.  Confederate  currency. 

186.  Bribery. 

187.  Lobbying. 

188.  Wagers. 

189.  Option  contracts,  when  illegal. 

190.  Contracts  in  restraint  of  trade. 

191.  Contracts  iu  restraint  of  marriages. 

192.  Contracts  for  tne  procurement  of  marriages  and  divorces. 

193.  Contracts  in  fraud  of  creditors. 
194;.  Maintenance  and  champerty. 

195.  Offenses  against  morality  and  religiou. 

196.  Usury. 

197.  Violations  of  the  banking  acts. 

198.  Other  illegal  considerations  —  Knowledge  of  illegal  intent. 

199.  How  illegal  considerations  may  "be  purged. 

200.  Inadequacy  of  consi^leration. 

201.  Failure  of  consideration,  total  and  partial. 

202.  Failure  in  title. 

203.  Failure  in  value. 

204.  Failure  by  non-performance  of  agreement. 

205.  Failure  of  consideration  after  its  delivery. 

§  151.   The  necessity  of  consideration.  —  It  is  the  uu- 

failinof  rule  of  the  Eno;lish  and  American  law  that  no  exc- 
cutory  contract  can  be  enforced  in  the  courts,  unless  it  be 
supported  by  a  valuable  consideration.^  Hence,  iu  order 
that  a  negotiable  instrument  may  in  England,  and  in  this 
country,  be  enforced   between  the  original  parties,  it  must 

1  Tenny  v.  Prince,  4  Pick.  385;  s.  c.  7  Pick.  243;  Lang  v.  Johnson,  4 
Foster  (N.  H.),  302;  Washington  Bank  i-.  Farmer's  Bank,  4  Johns.  Ch. 
62;  Aldridge  v.  Turner,  1  Gill  &  J.  427;  Littlejohn  t\  Patillo,  2  Hawks, 
302;  Doebler  v.  Waters,  30  Ga.  344;  Lowe  v.  Bryant,  32  Ga.  235;  Gay  v. 
Botts,  13  Bush,  299;  Travis  v.  Duffan,  20  Tex.  49;  Bailey  v.  Walker,  29 
Mo.  407;  Eagle  Mfg.  Co.  r.  Jennings,  29  Kan.  657;  Culver  v.  Banning,  19 
Minn.  303;  Reynolds  v.  Burlington,  etc.,  R.  R.  Co.,  11  Neb.  186;  Hendy  v. 
Kier,  59  Cal.  138;  Currie  v.  Misa,  L.  R.  10  Ex.  153;  Thomas  v.  Thomas,  2 
Q.  B.  851;  Edgeware  Highway  Board  v.  HarroAV  Dist.  Gas  Co.,  L.  R.  10 
Q.  B. 92. 

246 


CH.  X.]  THE    CONSIDERATION.  §     152 

be  founded  upon  a  valuable  consideration.  Although  the 
doctrine  of  consideration  is  not  known  to  the  systems  of 
jurisprudence  of  continental  Europe,  and  to  other  systems 
derived  from  the  Roman  law,  in  the  general  character 
which  it  has  in  our  own  system,  yet  the  main  principle  of 
the  doctrine  is  recognized,  at  least  in  regard  to  commercial 
paper,  so  that  it  may  be  safely  said  that  the  law  of  the  en- 
tire civilized  world  requires  all  commercial  instruments  of 
indebtedness  to  be  based  upcn  a  valuable  consideration.^ 
Accommodation  paper,  as  long  as  it  remains  in  the  hands  of 
the  original  parties,  cannot  be  enforced  anywhere. 

§  152.  What    instriiments    import    a  consideration.  — 

According  to  the  English  and  American  common  law,  every 
species  of  commercial  paper  imports  a  consideration,  so 
that  a  consideration  need  not  be  expressly  proved,  in  order 
■  to  sustain  an  action  on  such  paper.  Although  it  was  once 
held  to  be  necessary  to  have  in  the  body  of  the  instrument 
an  express  acknowledgment  of  consideration,  in  order  to 
raise  the  presumption  of  consideration,^  it  is  now  generally 
held,  in  England^  and  in  the  United  States  to  be  unneces- 
sary.* Not  only  is  this  the  case,  where  the  instrument  has  all 
the  characteristics  of  a  negotiable  instrument,  but  a  paper 
has  also  been  held  to  import  a  consideration,  although  it 
may  lack  one  of  these  characteristics;  for  example,  when 

1  See  §  152. 

2  Cramlington  v.  Evaus,  1  Show.  5. 

3  Popplewell  V.  Wilson,  1  Stra.  264;  Claxton  v.  Swift,  2  Show.  496; 
Graut  V.  DaCosta,  3  M.  &  S.  351;  Macload  v.  Snee,  Ld.  Raym.  1481. 

*  Mandeville  v.  Welch,  5  Wheat.  277;  Keadall  v.  Galvin,  15  Me.  131; 
Townshend  v.  Derby,  3  Mete.  363;  Dean  v.  Carruth,  108  Mass.  242; 
Goshen  Turnpike  Co.  V.  Hurtin,  9  Johns.  217;  Hughes  v.  Wheeler,  8  Cow. 
83;  Uuderhill  v.  Phillips,  10  Hun,  591;  Kinsman  v.  Birdsell,  2  E.  D. 
Smith,  395;  Hook  v.  Pratt,  78  N.  Y.  371;  Peasley  v.  Boat\n-ight,  2  Leigh, 
195;  Hubble  v.  Fogartie,  3  Rich.  413;  Hanley  v.  Lang,  5  Port.  154;  Murry 
V.  Clayborn,  2  Bibb,  300;  Matlock  v.  Livingston,  9  Sm.  &,  M.  489;  People 
V.  McDermott,  8  Cal.  288. 

247 


§     152  THE    CONSIDERATION.  [CH.  X. 

the  words  "or  order,"  "or  bearer"  have  been  omitted 
from  an  otherwise  good  negotiable  instrument.*  But  this 
would  be  different,  if  the  omission  was  so  serious  as  to  take 
away  from  the  paper  the  character  of  negotiability  alto- 
gether, as,  for  example,  where  it  was  directed  to  be  paid 
conditionally  or  out  of  a  particular  fund.  In  such  a  case, 
the  consideration  would  have  to  be  averred  and  proved,  at 
least,  if  the  paper  did  not  contain  the  words  *'  value  re- 
ceived," or  some  other  express  acknowledgment  of  consid- 
reration.2  But  where  the  instrument  is  non-ueffotiable,  and 
not  under  seal,  there  is  no  presumption  of  consideration, 
"^.unless  the  instrument  contains  the  words  "  value  received" 
or  some  other  express  acknowledgment  of  the  consideration.^ 

By  statute,  in  some  of  the  States,  notably  Arkansas,* 
Missouri,^  and  Pennsylvania,^  it  is  required  that  all  prom- 
issory notes  must  contain  the  w^ords  "  for  value  received," 
in  order  to  make  them  negotiable. 

The  note  or  bill  does  not  necessarily  presume  a  considera- 
tion existing  prior  to  its  execution,  but  it  does  import  a 
consideration  that  is  at  least  contemporaneous.^ 

1  Haydock  v.  Lynch,  2  Ld.  Raym  1563;  Josceline  v.  Lassere,  10  Mod. 
294 ;  Averett's  Adm.  v.  Booker,  15  Gratt.  1C9. 

2  Atkinson  v.  Manks,  1  Cow.  691 ;  De  Forest  v.  Frary,  6  Cow.  151 ; 
Josceline  v.  Lassere,  10  Mod.  294,  317;  Haydock  v.  Lynch,  2  Ld.  Raym. 
1563;  Averett's  Admru.  Booker,  15  Gratt.  169;  Belderback  v.  Burlingame, 
27  111.  338;  Frank  v.  Irgens,  27  Minn.  43. 

3  Boune  v.  Ward,  61  Me.  191;  Walrad  w.  Petrie,  4  Wend.  575;  1  Par- 
sons' N.  &  B.  226 ;  Courtney  v.  Doyle,  10  Allen,  123 ;  Peasley  v.  Boatwright, 
2  Leigh,  198;  Averett's  Admr.  v.  Booker,  15  Gratt.  165. 

*  In  Arkansas  the  words  "value  received  "  are  not  necessary  to  the 
negotiability  of  the  instrument,  but  are  required  in  order  to  recover  cer- 
tain statutory  damages.     Rev.  Stat.  Ark.  (1874),  §§  568,  556. 

«  Rev.  Stat.  1879,  §  545,  Rev.  Stat.  (1835),  298,  §  7;  Beaty  v  Anderson, 
5  Mo.  447;  Macy  v.  Kendall,  33  Mo.  164;  Bailey  r.  Smock,  61  Mo.  213; 
Stix  V.  Matthews,  63  Mo.  371. 

6  The  act  of  1797,  — see  Purdy  Dig.  (1872),  p.  1173,  §  1,  — appliesonly 
to  negotiable  notes  "  bearing  date  in  the  city  or  county  of  Philadelphia." 

'  Johnson  v.  Lane's  Trustees,  11  Gratt.  553. 
248 


CH.  X.]  THE    CONSIDERATION.  §    154 

§  153.  What  liabilities  presumed  to  be  iucluded  in  the 
consideration.  —  If  there  is  no  proof  to  the  contrary,  the 
execution  of  a  note  is  held  to  support  the  presumption  that 
it  constitutes  a  settlement  of  all  demands  between  the 
parties,  after  a  complete  accounting,  the  amount  of  the 
note  being  the  balance  found  to  be  due  by  the  maker  to 
the  payee.  But  this  is  at  best  a  very  weak  presumption, 
and  is  rebutted  by  the  slightest  evidence,  indicating  a  more 
limited  consideration.^ 

-  §  154.  Between  whom  question  of  consideration  may 
be  raised.  — It  is  a  general  rule  that  the  defenses  not  ap- 
parent on  the  face  of  commercial  instruments  can  only  be 
set  up  against  original  parties  and  those  subsequent  in- 
dorsees "who  are  not  holders  for  value  and  without  notice.^ 
Applying  this  rule  to  the  matter  of  consideration,  it  may 
be  stated  that  the  question  of  consideration  can  be  raised  as 
defense  only  between  the  original  parties  to  the  transac- 
tion, and  those  subsequent  holders  of  the  instrument  who 
take  it  with  notice  or  without  value.  As  between  such 
parties,  any  defense,  showing  that  the  consideration  was 
insufficient,  will  be  admissible  to  defeat  the  action;  for  ex- 
ample, that  the  consideration  was  illegal,^  or  fraudulent ; 
or  that  it  was  given  under  a  mistake.^ 

1  Lakev.  Lysou,  6  N.  Y.  461;  Sherman  v.  Mclntyre,  14  N.  Y.  S.  C. 
(7  Hun)  592;  De  Freest  v.  Bloomingdale,  5  Denio,  304;  Dutcher  v.  Por- 
ter, 63  Barb.  20;  Graves  v.  Shulman,  59  Ala.  406.  Aud  consideration  is 
never  presumed  to  include  notes  or  other  instruments  of  indebtedness, 
only  open  and  unsettled  accounts.     Tisdale  v.  Maxwell,  58  Ala.  40. 

2  For  a  general  discussion  of  the  application  of  this  rule,  see  chapter 
XIV.,  the  Rights  of  Indorsees  of  Bills  and  Notes,  and  Chapter  XVII.,  the 
Defenses  to  Actions  on  Bills  and  Notes. 

8  Edmond  v.  Groves,  2  M.  &  W.  642;  Bingham  v.  Stanley,  2  Q.  B.  117; 
Holden  v.  Cosgrove,  12  Gray,  216;  Shirley  v.  Howard,  53  111.  455. 

*  Morton  v.  Rogers,  12  Wend.  484. 

s  Forman  v.  Wright,  11  C.  B.  481;  Southall  v.  Riggs  11  C.  B.  481; 
Thomas  v.  Thomas,  7  Wis.  47G. 

249 


§  'loi  THE    COXSIDEKATION.  [CII.   X. 

As  ;i  general  proposition,  it  may  be  stated  that  the  want 
of  a  sufficient  consideration  may  he  pleaded  as  a  defense  in 
an  action  between  the  maker  and  pa}ee  of  a  note ;  ^  the 
drawer  and  payee  of  a  bill ;  ^  the  drawer  and  accei)tor,'' 
and  the  indorser  and  the  immediate  indorsee  of  a  ])ill  or 
note.*  On  the  otiier  hand,  such  defenses  will  not  prevail 
in  actions  between  indorsees  and  the  maker  or  drawer,^  be- 
tween the  payee  and  acceptor  of  a  bill,®  and  between  the 
indorsee  and  a  remote  indorser,^  unless  it  can  be  further 
shown  in  evidence  that  the  indorsee  or  payee  is  not  a  holder 
for  value  and  without  notice. 

In  such  cases,  it  must  not  only  be  proved  that  the  paper 
did  not  rest  originally  upon  a  sufficient  consideration,  but 
also  that  the  plaintiff  is  not  a  bona  fide  holder  for  value.* 

^  Puget  de  Bras  v.  Forbes,  1  Esp.  117;  Jeffries  v.  Austin,  2  Stra.  674. 

2  Spurgiu  V.  McPlieeters,  42  Ind.  527;  McCulloch  v.  Hoffroau,  17  N. 
y.  S.  C.  (10  Him),  133. 

3  Thomas  v.  Thomas,  7  Wis.  476;  Spurgin  v.  McPheeters,  42  lud. 
527. 

■*  Holiday  v.  Atkinson,  5  B.  &  C.  501 ;  Abbott  v.  Hendricks,  1  Man.  & 
G.  791;  Easton  v.  Pratchett,  1  Cromp.  M.  &  G.  798;  2  Crorap.  M.  &  G, 
542;  Barnett  v.  Offermau,  7  Watts,  130;  Clement  v.  Keppard,  15  Pa.  St. 
Ill ;  Bank  of  Ohio  Valley  v.  Lockwood,  13  W.  Va.  392;  Spurgin  v.  Mc- 
Pheeters, 42  lud.  527;  Klein  v.  Kcyes,  17  Mo.  326. 

5  Price  V.  Keen,  40  N.  .J.  L.  332;  Etheridge  v.  Gallagher,  55  Miss.  464; 
Mechanics,  etc.,  Bank  v.  Crow,  60  N.  Y.  85;  Commissioners  v.  Clark,  94 
U.  S.  285;  Collins  v.  Gilbert,  94  U.  S.  757  j  Davis  v.  Bartlett,  12  Ohio  St. 
537;  Ducrsou's  Admr.  i;.  Alsop,  27  Gratt.  248;  Sloan  ??.  Union  Banking 
Co.,  G7  Pa.  St.  479;  Goodman  v.  Siraonds,  20  How.  343;  Bank  of  Pitts- 
burg, 22  How.  96;  Murray  u.  Lardner,  2  Wall.  110;  Kellogg  v.  Curtis,  69 
Me.  212;  Smith  v.  Braine,  16  Q.  B.  244;  Curamings  v.  Thomson,  18  Minn. 
252;  Organ  Co.  v.  Boyle,  10  Neb,  409. 

6  Hoffman  v.  Bank  of  Milwaukee,  12  Wall.  181;  Laflin  &  R.  Powder 
Co.  V.  Sinsheimer,  48  Md.  411 ;    Marsh  v.  Low,  55  lud.  271. 

t  Ethridge  v.  Gallagher,  55  Miss.  464. 

8  Thiedemann  v.  Goldsmith,  1  DeGex,  F..  &  J.  4;  Hunter  v.  Wilson,  19 
L.  J.  Exch.  8;  4  Exch.  489;  United  States  v.  Bank  of  Metropolis,  15  Pet. 
393;  Swift  v.  Tyson,  16  Pet.  1;  Hoffman  v.  Bank  of  Milwaukee,  12  Wall. 
181;  Craig  v.  Sibbett,  15  Penn.  240;  Boyd  v.  McCanu,  10  Md.  118; 
Howell  V.  Crane,  12  La.  Ann.  126;  AVatsou  ?;.  Flanagan,  14  Tex.  354 ; 
250 


CH.  X.]  THE    CONSIDERATION.  §    154 

And  it  is  the  general  rule  in  Ensjland  and  in  the  United 
States  that  the  want  of  original  consideration,  when 
proven,  does  not  throw  upon  the  plaintiff  the  burden  of 
showing  that  he  is  a  bona  fide  holder  for  value, ^  unless  the 
paper  is  payable  to  bearer ;  and  in  this  case  it  has  been 
held  that  the  absence  from  the  face  of  the  paper  of  evidence 
of  the  fact,  that  the  plaintiff  is  a  transferee  and  not  the 
original  payee,  throws  upon  him  the  burden  of  proving 
that  fact. 2 

Where  the  instrument  is  supported  by  a  consideration,  it 
is  no  defense  to  an  action  by  the  indorsee  against  the 
maker,  the  drawer,  the  acceptor  or  any  prior  indorser,  ex- 
cept the  immediate  indorser,  that  the  plaintiff  is  not  a 
holder  for  value.  The  want  of  consideration  for  the  trans- 
fer by  indorsement  is  a  good  defense  only  in  an  action  by 
the  indorsee  against  his  immediate  indorser.^ 

Spurgin  v.  McPheeters,  42  Ind.  527;  Robinson  v.  Reynolds,  2  Q.  B.  (42 
E.  C.  L.  R.)  196.       . 

i  Commissioners  v.  Clark,  94  U.  S.  285;  Collins  v.  Gilbert,  94  U.  S. 
757;  Goodman  v.  Simouds,  20  How.  343;  Bank  of  Pittsburg  v.  Neal,  22 
How.  9G;  Murray  u.  Larduer,  2  Wall.  110;  Whittaker  v.  Edmonds,  1 
Mood.  &  R.  366;  Mills  v.  Barber,  1  Mees.  &  W.  425;  Smith  v.  Braine,  16 
Q.  B.  244;  Fletcher  v.  Cashee,  32  Me.  587;  Baxter  v.  Ellis,  57  Me.  180; 
Kellogg  V.  Curtis,  69  Me.  212;  Duerson's  Admr.  v.  Alsop,  27  Grat.  248; 
Harger  v.  Worrall,  69  N.  Y.  370;  Mechanics,  etc..  Bank  v.  Crow,  60 N.  Y. 
85;  Wilson  V.  Lazier,  11  Gratt.  478;  Davis  v.  Bartlett,  12  Ohio  St,  537; 
Ellicott  V.  Martin,  6  Md.  509;  Knight  v.  Pugh,  4  Watts  &  S.  445;  Sloan 
V.  Union  Banking  Co.,  67  Pa.  St.  479;  Grenaus  v.  Wheeler,  6  Tex.  515; 
Cummings  U.Thompson,  18  Minn.  252;  Mathews  v.  Poythreas,  4  Ga.  287; 
Magee  v.  Badger,  34  N.  Y.  247;  Belmont  Branch  Bank  v.  Hoge,  35  N.  Y. 
65;  Holeman  v.  Hobson,  8  Humph.  127;  Cropsey  v.  Averill,  8  Neb.  157; 
Organ  Co.  v.  Boyle,  10  Neb.  409.  See  contra^  Mayor  of  Wetumpka  v. 
Wetumpka  Wharf  Co.,  63  Ala.  611. 

2  Bissell  V.  Morgan,  11  Cush.  198;  1  DaniePs  Negot  Inst.,  §  814a. 

3  Middlebury  v.  Case,  6  Vt.  165;  Shane  v.  Lowry,  48  Ind.  205;  Fred- 
erick V.  Winans,  51  Wis.  472;  McWilliams  v.  Bridges,  7  Neb.  419;  Kelly 
V.  Pember,  35  Vt.  183;  Rickle  v.  Dow,  39  Mich.  91;  Byers  v.  Harris,  9 
Helsk.  652. 

251 


§    155  THE    CONSIDERATION.  [CH.  X. 

§  155.  Real  and  apparent  relation  of    parties.  — The 

real  relation  of  the  parties  does  not  always  appear  on  the 
face  of  the  paper  ;  and  wherever  the  apparent  relation  of 
the  parties  differs  from  the  real,  it  is  always  competent  for 
the  purpose  of  admitting  or  excluding  the  defense  of  con- 
sideration, to  show  by  parol  evidence  what  the  true  rela- 
tion of  the  parties  is.  Thus,  the  name  of  the  payee  and 
indorsee  is  often  left  blank,  and  the  blank  filled  up  after- 
wards with  the  name  of  a  subsequent  holder,  thus  making 
him  appear  as  the  payee  or  prior  indorsee.  • 

In  all  such  cases  it  is  competent  for  him  to  show  that  he 
is  not  the  original  payee  or  immediate  indorsee,  and  thus 
exclude  the  defense  of  want  of  consideration  from  his  action 
on  the  instrument.^ 

In  the  issue  of  a  bill  of  exchange  for  the  purpose  of  re- 
mitting money  to  a  distant  place,  there  are  very  frequently 
four  persons  who  have  to  do  with  its  execution  and  issue, 
although  the  bill  docs  not  show  on  its  face  more  than  three. 
The  three  appearing  on  its  face  are  the  drawer,  the  payee 
and  the  acceptor.  The  possible  fourth  party  is  the  re- 
mitter, he  who  procures  the  draft  of  the  bill,  and  has  it 
made  payable  to  the  payee,  in  satisfaction  of  some  debt  or 
other  liability,  or  as  a  gift.  That  is,  if  A.  wants  to  trans- 
fer a  sum  of  money  to  B.,  living  at  a  distant  place,  he  goes 
to  a  banker  of  his  town,  C,  and  procures  from  him  a  bill 
of  exchange,  drawn  by  him  on  D.,  a  banker,  living  at  B.'^s 
domicile,  or  at  some  mercantile  center,  and  made  payable 
to  B.  In  such  a  case,  the  original  consideration  for  the 
bill  moved  from  A.,  and  if  it  failed  for  any  reason,  the 
question  could  be  raised   in  any  action  between   A.  and 

1  Hoffman  v.  Bank  of  Milwaukee,  12  Wall.  193;  Arbouin  v.  Anderson, 
1  Q.  B.  498;  Munroe  v.  Bordier,  8  C.  B.  862;  Horn  v.  Fuller,  6  N.  H.  511 ; 
Brummel  v.  Enders,  18  Gratt.  905;  Frank  v.  Lidieufeld,  33  Gratt.  378; 
Pindar  v.  Barlow,  31  Vt.  539;  Nelson  v.  Cowing,  6  Hill,  336;  Rich  v. 
Starbuck,  51  Ind.  87;  Glasscock  v.  Rand,  14  Mo.  550. 
252 


CH.  X.]  THE    CONSIDERATION.  §     155 

C.  ;  but  since  B.,  the  payee,  was  not  a  party  to  the  original 
transaction,  C.  could  not  set  up  the  want  of  consideration 
as  against  the  payee,  B.,  unless  B.  is  shown  to  have  taken 
the  bill  without  paying  value  for  it.  Where  B.  has  paid 
value,  he  is  a  subsequent  holder,  who  takes  the  paper  free 
from  the  defense  of  want  of  consideration.  But  if  B.  is  a 
donee,  instead  of  a  bona  fide  holder,  he  cannot  enforce  the 
bill  against  the  drawer,  C.^  But  this  is  only  true  when  the 
remitter  is  not  the  agent  of  the  payee.  If  the  remitter  is 
the  agent  of  the  payee,  and  procures  the  bill  in  the  capacity 
of  an  agent,  the  payee  is  an  original  party,  and  want  of 
consideration  ma}'  be  pleaded  against  the  payee. ^ 

A  similar  state  of  facts  may  arise  in  the  issue  of  a  promis- 
sory note.  For  example,  if  A.  procures  C.  to  make  a  note 
payable  to  B.,  in  satisfaction  of  a  claim  B.  has  against  A., 
it  would  be  no  defense  to  an  action  by  B.  that  no  consid- 
eration moves  from  A.  to  C.  But  if  there  is  no  consider- 
ation between  A.  and  B.,  then  B.  is  not  a  bona  fide  holder 
for  value,  and  cannot  therefore  plead  immunity  from  the 
defense  of  Avant  of  consideration  between  A.  and  C.^  But 
where  the  consideration  moving  from  A.  to  C.  is  illegal,  not 
only  must  there  be  a  consideration  moving  from  A.  to  B., 
but  B.  must  also  be  ignorant  of  the  fact  that  the  original 
consideration  was  illegal.* 

1  Munroe  v.  Bordier,  8  C.  B.  (65  E.  C.  L.  R.)  862. 

^  In  Puget  V.  De  Bras,  1  Esp.  117,  the  plaiutiff,  living  in  Holland, 
directed  his  agents  in  London  to  collect  money  owing  to  him,  and  remit 
to  him.  The  agents,  in  accordance  with  the  custom  of  London,  bought 
of  the  defendant  bills  on  Holland  in  favor  of  the  plaintiff  on  the  17tli  of 
February,  with  the  understanding  that  tliey  were  to  be  paid  for  on  the 
next  post-day,  which  was  February  21.  The  bills  were  forwarded  on 
the  latter  day  to  the  plaintiff,  but  on  the  20th  the  London  agents  failed. 
The  coiirt  held  that  the  plaintiff  could  not  recover. 

3  South  Boston  Iron  Co.  v.  Brown,  63  Me.  139;  Aldrich  v.  Stockwell, 
9  AUen,  45;  Railroad  v.  Chamberlain,  44  N.  H.  497;  Yeatman  v.  Mattison, 
59  Ala.  382;  Lea  v.  Cassen,  61  Ala.  312. 

*  Baker  v.  Collins,  9  Allen,  253.     In  this  case  the  original  considera- 

253 


§     l.')t>  THE    CONSIDEKATIOX.  [CII.  X. 

It  may  also  be  shown  that  the  (h-awer,  instead  of  the  ac- 
ceptor, is  the  primary  debtor.  The  presumption  always  is 
that  the  acceptor  is  the  primary  debtor;  and  as  against  a 
subsequent  holder  for  value,  the  presumption  is  conclu- 
sive. Only  when  an  action  is  instituted  on  the  bill  between 
the  drawer  and  acceptor,  is  it  possible  to  show  that  the 
drawer  is  the  debtor  and  the  acceptor  is  the  creditor,  as 
when  the  drawee  accepts  for  the  accommodation  of  the 
drawer.^ 

.If  the  original  consideration  is  illegal  or  fraudulent,  the 
original  payee  cannot  procure  the  superior  title  of  an  in- 
dorsee for  value  by  indorsing  the  paper  to  one,  who  in 
turn  indorses  back  to  him.  The  want  of  consideration  may 
be  pleaded  in  defense  of  an  action  by  him,  even  though  the 
indorsements  from  and  to  him  "were  made  in  good  faith. ^ 

§  156.  To  whom  consideration  must  be  given.  —  Al- 
though the  consideration,  at  least  when  it  assumed  the  form 
of  an  affirmative  benefit  generally,  moves  to  the  promisor, 
yet  that  is  not  necessary.  It  will  be  a  sufficient  consider- 
ation for  a  promise,  if  some  benefit  is  bestowed  upon  a 
third  person  in  reliance  upon  the  promise.  For  example, 
A.  may  give  his  note  to  B.  in  consideration  of  C.  being 
furnished  with  articles  of  value,  or  being  released  from  a 
debt  which  he  owes  to  B.-^  On  the  same  grounds,  it  has 
been  held  that  a  public  officer  may  enforce  a  note  given  to 

tion  was  a  debt  contracted  by  the  sale  of  intoxicating  liquors  in  violation 
of  the  law. 

1  Turner  v.  Browden,  5  Bush,  216;  Pillano  v.  Van  Mierop,  3  Burr, 
1663.     See  Stark  v.  Alford,  29  Texas,  2G0;  Trego  v.  LoTvery,  S  Neb.  238. 

2  Sawyer  v.  Wisewell,  9  Allen,  42;  Kost  v.  Bender,  25  Mich.  510;  Tod 
V.  Wick,  36  Ohio  St.  387.  See  post,  chapter  on  Rights  of  Bona  Fide 
Holders. 

3  Rutland  V.  Brister,  53  Miss,  683;  Hapgood  v.  Policy,  35  Vt.  649; 
Kracht  v.  Obst,  14  Bush,  34;  Good  v.  Martin,  95  U.  S.  90;  Gay  v.  Mott, 
43  Ga.  252;  Crawford  v.  Shaw,  18  Ind.  495;  Hoxie  v.  Hodges,  1  Ore. 
251;  Kinsman  v.  Birdsall,  2  E.  D.  Smith,  395. 

254 


CH.  X.]  THE    CONSIDERATION.  §     157 

him  in  consideration  of  some  debt  due  to  the  State,  county 
or  city.^  But  in  such  cases,  it  is  held  that  the  consideration 
must  be  known  to  the  promisor,  in  order  to  support  the 
promise. 2 

§  157.  When  one  consideration  answers  for  more  than 
one  party.  —  Not  only  may  the  promise  of  one  be  sup- 
ported by  a  consideration  moving  to  another,  as  in  the  case 
of  a  guarantor,  but  the  same  consideration  will  support  the 
promises  of  all  who  are  induced  thereby  to  assume  obliga- 
tions. Co-makers  of  negotiable  in.struments,  whether  as 
joint  principals  or  as  principal  and  surety,  are  almost  invari- 
ably bound  by  one  consideration ;  and  it  has  been  held  that 
a  joint  note  implies  a  joint  consideration.^  This  is  like- 
wise the  case  with  one  who  indorses  for  another's  accom- 
modation, if  made  when  or  before  the  loan  was  negotiated; 
the  indorsement  constitutes  a  part  of  the  original  agree- 
ment, and  needs  no  independent  consideration.* 

In  every  case,  where  parties  join  in  the  assumption  of  the 
same  liability  as  co-makers  of  a  note,  or  of  different  liabili- 
ties arising  out  of  the  same  transaction,  as  maker  and  in- 
dorsers,    the    promises   of  all   must  be    made  before   the 

1  Livingstone  v.  Hastie,  2  Caines,  246;  Joy  v.  Phillips,  29  Me.  255; 
Kingsbury  v.  Ellis,  4  Cusli.  578 ;  County  of  Appling  v.  McWilliams,  69 
Ga.  840.  But  see,  contra,  Kendrlck  v.  Crowell,  38  Me.  42;  Hunter  v. 
Field,  20  Oliio  340;  Crowell  v.  Osborne.  14  Vroom,  335. 

2  Ellis  V.  Clark,  110  M^vss.  392;  Pratt  v.  Hedden,  121  Mass.  116.  But 
see  Harrington  v.  Brown,  77  N.  Y.  72,  in  which  a  surety  signed  a  note 
two  years  after  its  execution  and  delivery;  and  the  consideration  proved 
was  the  promise  of  the  maker  at  the  time  that  the  note  was  delivered 
that  this  third  person  should  sign  it  as  surety.  It  was  held  that  the 
surety  was  bound,  although  he  did  not  know  of  the  maker's  promise. 

3  Kinsman  v.  Birdsall,  2  E.  D.  Smith,  395.  See  Hapgoodv.  Polley,  35 
Vt.  649;  Hoxie  v.  Hodges,  1  Ore.  251. 

*  Austin  V.  Boyd,  24  Pick.  64;  Leonard  v.  Vredenburgh,  8  Johns.  29; 
Bailey  v.  Freeman,  11  Johns.  220;  Rogers  v.  Kneeland,  10  Wend.  218; 
s.  c.  13  Wend.  114;  DeWolf  v.  Raband,  1  Pet.  476;  Simons  v.  Steele,  36 
N.  H.  73;  Leonard  v.  Sweetzer,  IG  Ohio,  1. 

255 


§     157  THE    CONSIDERATION.  [CII.  X. 

consideration  is  executed,  in  order  that  one  consideration 
may  support  all  the  promises.  An  executed  consideration 
cannot  support  a  subsequent  promise.  For  example,  if, 
after  the  debt  is  contracted  and  the  note  delivered,  the 
maker  should  procure  the  signature  of  another  on  the  note, 
whether  as  co-maker,  surety  or  indorser,  this  later  signa- 
ture does  not  create  any  liability  in  respect  to  the  parties 
in  immediate  privity  with  the  obligor,  unless  it  is. supported 
by  a  fresh  consideration.^  But  indorsements  for  accommo- 
dation, as  well  as  joint  executions  of  negotiable  instruments 
are  presumed  to  have  been  made  contemporaneous  with  the 
execution  of  the  notc.^ 

"Where  the  subsequent  indorsement  or  signing  of  the 
paper  is  made  in  performance  of  a  previous  promise  made 
to  the  payee  as  an  additional  inducement  for  the  loan  or 
other  consideration  of  the  note,  it  is  held  that  this  prior 
promise  is  a  sufficient  consideration  to  support  the  liability 
created  by  the  subsequent  indorsement  or  signature.'  This 
previous    promise  may  be  made  by  the  maker  of  a  note,* 

1  Clopton  V.  Hall,  51  Miss,  482;  Brenner  v.  Gundersheimer,  14  Iowa, 
82;  Mecorney  v.  Stanley,  8  Cush.  85;  Union  Bank  v.  Willis,  8  Met.  504; 
Good  17.  Martin,  95  U.  S.  90;  Grossman  v.  May,  68  Ind.  242;  Green  v. 
Jones,  7  Jones,  681 ;  Stone  v.  Wnite,  8  Gray,  589 ;  Green  v.  Thornton,  4 
Jones,  230;  Bebee  v.  Moore,  3  McLean,  387;  Tenney  v.  Price,  4  Pick. 
385;  Joslyn  v.  [Collinson,  26  111.  61;  Pfeiffer  v.  Kingsland,  25  Mo.  60; 
Green  v.  Shepherd,  5  Allen,  589;  Williams  v.  Williams,  67  Mo.  661; 
Briggs  V.  Downing,  48  Iowa,  550;  Clark  v.  Small,  6  Yerg,  418;  Ware  v. 
Adams,  24  Me.  177;  Sawyer  v.  Fernald,  59  Me.  500;  Harwood  v.  Johnson, 
20  111.  307. 

2  Benthall  v.  Judkins,  14  Met.  2«5. 

3  Moies  V.  Bird,  II  Mass.  436;  McNaughtr,  McClaughry,  42  N.  Y.  22; 
Williams  v.  Perkins,  21  Ark.  18;  Harrington  v.  Brown,  77  N.  Y.  72.  But 
see  Howard  v.  Jones,  10  Mo.  App.  81. 

*  Harrington  v.  Brown,  77  N.  Y.  72 ;  Moies  v.  Bird,  11  Mass.  436.  But 
see  Howard  v.  Jones,  10  Mo.  App.  81.  In  Harrington  v.  Brown,  supra, 
it  was  held  that  the  surety  need  not  know  of  this  previous  promise  of 
the  maker.  But  see,  contra,  Pratt  v.  Hedden,  121  Mass.  116;  Ellis  v. 
Clark,  110  Mass.  392. 
2.56 


CII.  X.]  THE    CONSIDERATION.  §     158 


/ 


or  by  the  surety;  auel  in  that  case  it  is  not  necessary  for  the 
maker  to  have  known  of  this  promise  of  the  surety.^ 

The  admission  of  the  indorser,  who  signs  after  the  deliv- 
ery of  the  instrument,  that  he  had  received  collateral  secu- 
rity for  indorsing,  will  not  be  sufficient  to  sustain  his 
liability. 2 


§  158.  Accommodation  paper. — When  one  lends  his 
mercantile  credit  to  another  by  signing  his  name  to  an  in- 
strument in  the  character  of  maker,  drawer,  acceptor  or 
indorser,  the  instrument,  so  far  as  such  signature  is  con- 
cerned, is  called  accommodation  paper.  The  obligation, 
arising  out  of  this  signature,  is  assumed  for  the  accommoda- 
tion of  the  other  person,  and  is  not  supported  by  any  con- 
sideration moving  to  the  person  so  signing.  Therefore,  as 
between  the  accommodating  and  the  accommodated  proof 
of  the  want  of  consideration  would  defeat  the  action.  The 
accommodation  paper  is  a  mere  blank,  has  no  value,  until  it 
has  been  negotiated,  when  it  becomes  enforceable  by  the 
holder  for  value  against  all  the  accommodation  indorsers.^ 
And  until  it  has  been  negotiated,  the  accommodation  in- 
dorser may  rescind  his  obligation,  and  demand  a  surrender 
of  the  instrument  or  a  cancellation  of  his  signature.* 

1  Hawkes  v.  Phillips,  7  Gray,  284;  McNaught  v.  McClaugliry,  42  N.  Y. 
22;  Williams  v.  Perkins,  21  Ark.  18. 

2  Tenney  v.  Price,  7  Pick.  243. 

■^  French  v.  Bank  of  Columbia,  4  Cranch,  59,  141;  Violett  v.  Patton, 
5  Cranch,  142;  Yeaton  v.  Bank  of  Alexandria,  5  Cranch,  49;  Stephens  v. 
Monongahela  N.  B.,  88  Pa.  St.  157;  Faut  v.  Miller,  17  Gratt.  47;  Robert- 
son V.  Williams,  5  Munf.  381;  Bank  of  Ohio  Valley  v.  Lockwood,  18  W. 
Va.  392 ;  Downes  v.  Eichardson,  5  Barn.  &  Aid.  674 ;  Whitworth  v. 
Adams,  5  Rand.  342;  May  v.  Boisseau,  8  Leigh,  164. 

4  May  V.  Boisseau,  8  Leigh,  164;  Smith  v.  WyckofE,  3  Sandf.  Ch.  79 
Dogan  V.  Dubois,  2  Rich.  Eq.  85.  And  a  subsequent  holder  cannot  re- 
cover of  the  party  so  revoking  his  signature,  if  he  had  notice  of  the 
revocation,  before  he  paid  for  the  note.  Dogan  v.  Dubois,  supra;  May  v. 
Boisseau,  supra. 

n  257 


§     l.")8  THH    CONSIDEKATION.  [cil.  X. 

Inasmuch  us  the  aulhority  given  to  the  accommodated 
party  to  bind  the  others  by  a  negotiation  of  the  pa})er,  is 
of  the  nature  of  a  power  of  attorney,  it  has  been  held 
that  the  death  of  the  accommodating  party  revokes  his  sig- 
nature, when  it  occurs  before  the  negotiation  of  the  paper. ^ 
It  seems  to  be  doubtful  whether  there  is  such  an  implied 
revocation  of  the  signature  ;  ^  but  it  is  certainly  true  that  the 
death  of  the  accommodating  party  cannot  operate  as  a  revoca- 
tion as  against  a  bona  fide  holder  for  value. ^  The  fact  that 
the  holder  for  value  knows  that  the  instrument  is  accom- 
modation paper  does  not  affect  the  liability  of  the  accom- 
modation indorser  or  acceptor,  for  the  money  paid  out  in 
negotiation  of  the  paper  is  sufficient  consideration  to  bind 
all  those  who  have  already  signed.*  And  it  seems  that  no 
objection  can  be  raised  to  the  title  of  the  bona  fide  holder 
for  value,  because  the  paper  had  been  negotiated  after  ma- 
turity.^ But,  of  course,  no  action  can  be  maintained  on  ac- 
commodation paper  by  one  who  is  a  holder  without  value 
and  with  notice.® 

The  accommodation  paper  may  also  be  pledged  as  secur- 
ity, unless  restrictions  are  placed  upon  its  use  ;  and  the 
pledgee  is  deemed  to  be  a  holder  for  value,  and  may  sue 
the  accommodating   parties  on  the  paper. ^     But  where  the 

1  Smith  V.  Wyckoff,  3  Sandf.  Ch.  94. 

2  Williams  v.  Bosson,  11  Ohio,  66. 

3  Clark  V.  Thayer,  105  Mass.  216. 

4  Smith  V.  Knox,  3  Esp.  47;  Charles  v.  Marsden,  1  Taunt.  224;  Fentum 
V.  Pocock,  5  Taunt.  193;  Jewell  v.  Parr,  16  C.  B.  684;  L.  R.  2  Exch.  56; 
Grant  v.  Ellicott,  7  Wend.  227;  Brown  u.  Mott,  7  Johns.  361;  Arnold  v. 
Sprague,  34  Vt.  402;  Best  v.  Nokoihis  Nat.  Bank,  76  111.  608;  Washing- 
ton Bank  v.  Kaum,  15  Iowa,  53;  Thatcher  v.  West  River  N.  B.  19  Mich. 
106;  Spurgeonr.  McPheeters,  42  Ind.  527;  Cady  u.  Shepherd,  12  Wis.  713; 
Harris  v.  Bradley,  7  Ycrg.  310;  Hawkins  v.  Neal,  60  Miss.  256;  Kracht 
V.  Obst,  14  Bush,  34;  Austin  v.  Boyd,  24  Pick.  64. 

«  Seyfert  v.  Edison,  16  Vroora,  393. 

6  Powers  V.  French,  1  Hun,  582;  Brooks  v.  Hay,  23  Hun,  372;  Robert- 
son V.  Williams,  5  Muni.  381. 

^  Matthews  v.  Rutherford,  7  La.  Ann.  225;  Washington  Bank  v.  Krum, 
258 


CH.  X.]  THE    CONSIDERATION.  §     159 

accommodation  paper  has  been  pledged  as  security,  only 
the  amount  of  money  actually  due  and  secured  by  it  can  be 
recovered  of  the  parties  to  the  paper. ^  And  where  such 
paper  is  pledged  to  secure  the  payment  of  an  existing  debt, 
a  fresh  consideration  is  needed  to  support  the  liability  of 
the  parties  to  the  paper ;  but  the  surrender  of  other  secur- 
ity would  be  a  suflScient  consideration.^ 

§  159.   Kinds  of  consideratiou,  good    and  valuable. — 

Considerations  are  divided  by  the  writers  upon  contracts 
into  two  principal  classes,  good  and  valuable.  A  good 
consideration  is  the  natural  love  and  affection  of  near  rela- 
tions, which  prompts  the  promises  and  bestowals  of  bene- 
fits. And  a  valuable  consideration  may  be  anything  which 
has  a  pecuniary  value.  It  is,  therefore,  either  money  or 
money's  equivalent.  But  a  note  or  other  instrument  of  in- 
debtedness can  only  sustain  an  action,  when  it  is  based  on 
a  valuable  consideration.  A  good  consideration,  natural 
love  and  affection,  is  not  sufficient  to  support  any  execu- 
tory contract,  except  in  deeds  under  the  statute  of  uses.^ 
A  note  or  bill  or  check,  given  by  a  father  to  his  son,  or  by 
the  son  to  an  aged  parent,  in  consideration  of  natural  love 
and  affection,  cannot  be  sued  on,  as  long  as  it  does  not 
pass  into  the  hands  of  a  holder  for  value.*     And  where  a 

15  Iowa,  53;  Appleton  v.  Donaldson,  3  Pa.  St.  386.  Knowledge  of  the 
character  of  the  paper  will  not  affect  the  title. of  the  pledgee,  or  of  the 
purchaser  from  the  pledgee.     Ransom  v.  Turley,  50  Ind.  273. 

1  Atlas  Bank  v.  Doyle,  9  R.  I.  76;  Gordon  v.  Boppe,  55  N.  Y.  665;  Bu- 
chanan V.  International  Bank,  78  111.  500. 

-  Depeau  v.  Waddington,  6  Whart.  219. 

=*  Tiedeman,  Real  Prop.,  §  iU. 

*  Milnes  v.  Dawson,  5  Exch.  948;  Hill  v.  "Wilson,  L.  R.  8  Ch.  App. 
894;  Holliday  v.  Atkinson,  5  B.  &  C.  401;  s.c.  8  D.  &  R.  163;  Tate  v. 
Hilbert,  2  Ves.  Jr.  Ill;  Woodbridge  v.  Spooncr,  3  B.  &  Aid.  235;  Mullen 
V.  Rutland,  55  Vt.  77;  Parker  v.  Carter,  4  Munf.  273;  Rice  v.  Rice,  68 
Ala.  216;  Johnson  v.  Griest,  85  Ind.  503;  Hill  v.  Buckminster,  5  Pick. 
391;  Pennington  v.  Gittiugs,  2  Gill  &  J.  208;  Fink  v.  Cox,  18  Johns.  145; 

259 


§     I'iO  THE    CONSIDERATION.  [cU.  X. 

note,  given  in  consideration  of  love  and  affection,  is  sur- 
renderetl  for  another  note,  the  want  of  a  valuable  consider- 
ation will  render  the  latter  note  invalid.^  And  as  a  matter 
of  course,  any  commercial  instrument,  supported  only  by  a 
good  consideration,  ma}' be  revoked  and  cancelled. ^ 

But  it  has  been  held  that  a  request,  written  at  the  bottom 
of  a  note,  that  the  payee  will  accept  the  note  as  an  expression 
of  friendship,  is  not  conclusive  that  the  note  was  without 
consideration,  although  the  note  was  sealed  up  and  the 
pa^'ee  was  requested  not  to  open  it  until  his  death. ^  The 
want  of  consideration  cannot  be  proved  by  evidence  of  the 
pecuniary  condition  of  the  payee  or-  of  any  other  party.* 

§    IGO.   Donatio  mortis   causa  ol    one's    own   paper. — 

Although  it  has  been  held  by  a  few  early  cases  that  the 
maker  of  commercial  paper  may  make  a  valid  gift  of  such 
paper  to  take  effect  on  his  death,  based  upon  a  good  con- 
sideration,^ it   is  the  generally  accepted  rule  of  law  that 

Hamor  v.  Moore,  8  Ohio  St.  239;  Kirkpatrick  v.  Taylor,  43  111.  207.  lu 
Edwards  v.  Davis,  1(5  Johns.  282,  the  note  was  given  by  a  son  for  neces- 
saries which  had  been  furnished  to  the  father.  In  West  v.  Gavins,  74 
Ind.  265,  the  note  was  given  to  offset  an  inequality  in  the  will  of  the 
maker,  and  in  Foust  v.  Board  of  Publication,  8  Lea,  552>  to  aid  a  church 
in  the  furtherance  of  its  charitable  interests.  See  also  Hardin  v. 
"Wright,  32  Mo.  452;  Harris  v.  Harris,  69  Ind.  181;  Peabody,  Guardian,  v. 
Peabody,  69  Ind.  556. 

1  Copp  V.  Sawyer,  6  N.  H.  386;  Hill  v.  Buckminster,  5  Pick.  391.  But 
see  contra,  Dawson  v  Keartou,  3  Sm.  &  Giff.  iS6. 

2  Simmons  v.  Cincinnati  Sav.  Soc,  31  Ohio  St.  457;  Second  Nat.  Bank 
V.  Williams,  13  Mich.  282;  Hewitt  v.  Kaye,  L.  R.  6  Eq,  198. 

3  Dean  v.  Carruth,  108  Mass.  242. 

*  Hartman  v.  Shaffer,   71  Pa.  St.  312. 

fi  In  Bowers  v.  Ilurd,  10  Mass.  427,  where  the  note  was  left  in  escrow, 
to  be  delivered  at  the  maker's  death,  and  to  operate  as  a  legacy,  over- 
ruled by  Hill  V.  Buckminster  5  Pick.  391.  See  also  Wright  v.  Wright,  1 
Cow.  598.  In  Worth  v.  Case,  42  N.  Y.  362,  a  note  without  consideration 
was  delivered  by  the  maker  to  the  payee  in  a  sealed  envelope,  with  in- 
structions not  to  open  until  the  maker's  death;  and  the  note  was  held  to 
be  binding  upon  the  estate  of  the  maker,  even  as  against  the  payee. 
260 


CH.  X.]  THE    CONSIDERATION.  §    161 

such  a  gift  does  not  differ  in  character  from  an  ordinary 
gratuitous  promise,  and  is  therefore  invalid,  because  it  is 
not  supported  by  a  valuable  consideration.^  But  if  there 
is  a  valuable  consideration  in  addition  to  that  of  love  and 
affection,  the  note  will  be  good ;  and  if  a  part  of  the  note  is 
based  upon  the  valuable,  and  a  part  upon  the  good,  con- 
sideration, only  the  latter  part  of  the  note  will  be  void.^ 
It  is  also  held  in  Louisiana,  that  since  a  check  is  there  con- 
sidered to  be  the  equivalent  of  money,  i.e.,  that  the  check 
operates  as  an  assignment  ^ro  tanto  of  the  fund  on  deposit,^ 
the  drawer  may  make  an  absolute  gift  of  his  check,  and 
the  check  will  not  be  revoked  by  the  death  of  the  drawer.* 

§  161.   Subscriptions    to    charitable    objects. — It    has 

been  frequently'  held  by  the  courts  that  a  note  or  other  com- 
mercial instrument,  given  for  the  furtherance  of  some  char- 
itable object,  to  found  a  college  or  hospital,  to  support  a 
church  and  its  pastor,  and  the  like  —  is  binding  upon  the 
maker  ;^  some,  on  the  ground  that  the  donees  have  incurred 
responsibilities  in  reliance  upon  the  payment  of  the  notes  ;^ 
and  others,  because  two  or  more  joined  in  the  subscription, 
and    the    promise   of   one    subscriber    is    declared   to    be 

1  Loring  v.  Sumner,  23  Pick.  98;  Carr  v.  Silloway,  111  Mass.  24;  War- 
ren V.  Durfee,  126  Mass.  338;  Flint  v.  Pattee,  33  N.  H.  520;  Halley  v. 
Adams,  16  Vt.  206;  Smith  v.  Kittridge,  21  Vt.  238;  Raymond  v.  Sellick, 
10  Conn.  480;  Craig  v.  Craig,  3  Barb.  Ch.  76;  Harris  v.  Clark  2  Barb.  94; 
s.  c.  3  N.  Y.  93;  Plielps  v.  Plielps,  28  Barb.  121 ;  Plielps  v.  Pond,  23  N.  Y. 
69;  Whitaker  v.  Wliitaker,  52  N.  Y.  368. 

2  Parisli  V.  Stone,  14  Pick.  198;  "Woodbridge  v.  Spooner,  3  B.  &  Aid. 
235;  Forbes  v.  Williams,  15  Bradw.  305. 

3  See  post,  §  452. 

<  Burke  v.  Bishop,  27  La.  Aan.  465.     See  post,  §  448. 

5  Trustees  of  Orphan  School  v.  Fleming,  10  Bush,  234;  Collier  v.  Bap- 
tist Educational  Society,  8  B.  Hon.  68;  Roohe  i'.  Roanoke  Seminary,  56 
Ind. 198. 

«  Amherst  Academy  v.  Cowles,  6  Pick.  427;  Simpson  College  t?.  Bryan, 
50  Iowa,  293. 

261 


§     1(;2  THE    CONSIDERATION.  [CH.  X. 

the  consideration  for  the  promise  of  the  other. ^  But  the 
authorities  are  not  agreed,  and  there  are  cases,  which  deny 
that  such  a  note  or  obligation  is  binding. ^ 

§  lt)2.  3Ioral  obligations,  when  siiflftcient.  —  As  has 
been  already  explained,  a  mere  moral  obligation  can  never 
be  a  sufficient  consideration  for  a  note,  not  even  when  the 
obliiration  arises  out  of  the  bestowal  of  benefits,  in  reli- 
ancc  on  the  promise  of  remuneration.  This  is  true  in  all 
cases,  where  the  obligation  to  pay  is  void  according  to  the 
law.  Whenever  public  policy  interdicts  a  contract,  it  is 
declared  to  be  absolutely  void,  and  the  moral  obligation 
arising  out  of  the  void  contract  cannot  support  a  subsequent 
promise  to  pay  ;  but  if  the  contract  is  interdicted  or  invali- 
dated, not  on  account  of  public  policy,  but  for  the  protec- 
tion of  one  individual  from  the  overreaching  of  another, 
the  contract  is  declared  to  be  only  voidable  at  the  instance 
of  the  person  for  whose  protection  the  law  interposed  its 
prohibition.^ 

r  Thus,  the  debts  of  a  married  woman,  being  absolutely 
void  at  law,  cannot  be  made  the  consideration  of  her  notes, 
executed  by  her  after  her  husband's  death,  at  least  in  those 
States,  where  the  common-law  disability  of  coverture  still 
exists.'*  On  the  other  hand,  a  promissory  note  made  by 
one,  after  reaching  his  majority,  for  debts  contracted  dur- 

1  George  v.  Harris,  4  N.  H.  533;  Roberts  v.  Cobb,  31  Hun,  158. 

2  Boutell  V.  Cowdiu,  9  Mass.  254,  where  the  uote  was  given  for  the 
benefit  of  a  church  and  for  the  support  of  its  pastor;  Pratt  v.  Trustees 
of  Baptist  Society,  93  111.  475,  where  the  note  was  given  for  the  pur- 
chase of  a  church  bell. 

3  Eastwood  V.  Kenyon,  11  Ad.  &  El.  (39  E.  C.  L.  K.)  438;  Littlefield  v. 
Shee,  2  Barn.  &  Adol.  811. 

<  Littlefield  v.  Shee,  2  B.  &  Ad.  811;  Hayward  v.  Barker,  52  Vt.  429. 
But  sec,  contra,  Goulding  v.  Davidson,  26  N.  Y.  604;  Barton  v.  Beer.  35 
Barb.  78;  Hubbard  v.  Bugbee,  55  Vt.  506;  Spitz  v.  Fourth  Nat.  Bank,  b 
B.  J.  Lea,  641. 
262 


CH.  X.]  THE    CONSIDERATION.  §    16^ 

ing  infancy/  or  given  for  an  usurious  debt,  either  before 
or  after  the  repeal  of  the  law  against  usury ,^  have  been 
sustained  as  binding  on  the  promisors. 

It  has  also  been  held  that  the  note  of  a  bankrupt  after  his 
discharge  for  an  antecedent  debt  is  bind  ing  on  him,^  although 
it  has  been  maintained,  by  some  of  the  courts  that  the  old 
debt  is  not  a  suflScient  consideration.*  In  the  same  manner 
an  oral  contract,  which  is  invalid  under  the  statute  of 
frauds,  is  a  sufficient  consideration  for  a  promissory  note 
or  bill.^  So,  likewise,  is  a  debt  barred  by  the  statute  of 
limitations.®  So,  also,  the  liability  of  a  surety  on  a  note 
barred  by  the  statute  is  sufficient  consideration  for  a  new 

1  Hawkes  v.  Saunders,  Cowp.  289;  Eastwood  v.  Kenyou,  11  Ad.  &  El. 
(39  E.  C.  L.  K.)  438. 

2  Flight  V.  Reed,  22  L.  J.  Exch.  265;  s.  c.  1  H.  &  C.  (S.  S.)  708;  State 
Bank  v.  Ayres,  2  Halst.  130;  Turner  v.  Hulme,  4  Esp.  11;  Morris  v.  Tay- 
lor, 6  C.  E.  Green,  439,  606;  De  Wolf  v.  Jolinsou,  10  Wlieat.  367. 

3  Way  V.  Sperry,  6  Cusli.  238;  Trueman  v.  Fenton,  Cowp.  544;  Mer- 
riam  v.  Bayley,  1  Cush.  77;  Scouton  v.  Eislord,  7  Johns.  36;  Hockett  u. 
Jones,  70  Ind.  229;  Wiggins  v.  Keizer,  6  Ind.  252;  Erwin  v.  Saunders,  1 
CoTV.  249;  McNair  v.  Gibbert,  3  Wend.  344;  Shippey  v.  Henderson,  14 
Johns.  178.  But  the  note  will  not  be  binding  if  it  is  made  in  pursuance 
of  a  corrupt  agreement  of  the  payee  made  prior  to  the  discharge.  Trum- 
ball  V.  Tilton,  21  N.  H.  129.  See  also  Penn  v.  Bennett,  4  Campb.  205j 
Maxim  v.  Morse,  8  Mass.  127;  Depuy  v.  Swart,  3  Wend.  135;  Moore  v. 
Viele,  4  Wend.  420.  But  see  Snevily  v.  Reed,  9  Watts,  396,  in  which  it 
was  held  that,  although  a  check  given  for  the  debtor's  release  from  im- 
prisonment is  valid,  a  note  for  the  amount  of  the  debt  would  not  be 
binding,  where  the  debt  has  been  discharged  by  a  capias  ad  satisfaciendum. 

*  White  V.  Wardwell,  1  Root  (Me.),  309;  Walbridge  v.  Harron,  18  Vt. 
448. 

*  Jones  V.  Jones,  6  M.  &  W.  84;  Hooker  v.  Knab,  26  Wis.  511;  Rogers 
V.  Stevenson,  16  Minn.  68;  Schneco  v.  Meier,  4  Mo.  App.  566. 

6  Eastwood  V.  Kenyon,  11  Ad.  &  El.  438;  McGrath  v.  Barnes,  13  S.  C. 
328;  Giddings  v.  Giddings,  51  Vt.  221;  Weunall  v.  Adney,  3  Bos.  &  P. 
249;  Hyling  v.  Hastings,  Ld.  Raym.  389;  Latouche  v.  Latouclae,  3  H.  & 
C.  576.  See  contra,  Brierly  v.  Tanner,  28  La.  Ami.  245.  The  ignorance  of 
the  maker  that  the  debt  was  barred  does  not  affect  tlie  question.  Buck- 
ner  v.  Clark,  6  Bush,  168.  But  a  fraudulent  misrepresentation  in  respect 
to  the  running  of  the  statute,  will  invalidate  the  note.  Cross  v.  Herr, 
96  Ind.  9G.     . 

263 


§     1'I'5  THK    CONSIDERATION.  [CH.  X. 

notx.'.^  But  a  })iirred  debt  of  the  father  will  not  be  a  suffi- 
cient consideration  for  the  son's  obligation. - 

A  note  is  also  good,  which  is  given  to  reimburse  one  who 
has  voluntarily  paid  the  debt  of  the  maker. ^  But  although 
a  simple  release  of  a  debt  does  not  destroy'  the  liability  of 
the  debtor,  unless  based  upon  a  sufficient  consideration, 
and  therefore  a  note  given  to  pay  this  debt  so  released  is 
binding  without  any  new  consideration ;  *  yet,  if  the  release 
of  the  debt,  or  of  a  part  of  it,  is  the  result  of  a  compro- 
mise of  disputed  claims,  the  released  debt  cannot  form  the 
consideration  of  any  subsequent  note  or  other  commercial 
instrument.^ 

The  loss  suffered  from  the  payment  of  a  debt  in  the  de- 
preciated Confederate  currency,  during  the  civil  war  of  the 
United  States,  is  not  a  sufficient  consideration  for  a  note 
given  subsequently.^ 

§  163.  Money  considerations  —  Contemporary  loans 
and  future  advances.  —  The  most  common  consideration  of 
contracts  in  general  and  particularly  of  commercial  paper, 
is  money.  There  is  no  doubt  as  to  the  sufficiency  of  a 
money  consideration,  where  the  money  is  paid  over  simul- 
taneously with  the  execution  of  the  paper, ^  or  promised  to  be 

1  Mills  V.  Linnell,  97  Mass.  298.  But  see  contra,  Clark  r.  Hamptou,  1 
Hun,  612,  in  respect  to  the  guaranty  of  a  barred  note. 

2  Clement  v.  Segur,  29  La.  Ann.  798,  overruling  Matthews  v.  Williams, 
25  La.  Ann.  585. 

3  Hayes  v.  Warner,  2  Str.  933;  Stokes  v.  Lewis,  1  T.  R.  20. 

*  See  Willing  v.  Peters,-  12  Serg.  &  R.  177;  Stafford  v.  Bacon,  25 
Wend.  384;  Valentine  v.  Foster,  1  Mete.  520;  Sncvely  v.  Read,  9  Watts, 
396. 

*  Warner  v.  Whitney,  24  Me.  561;  Phelps  v.  Dennett,  57  Me.  491 ; 
Montgomery  v.  Lampton,  3  Mete.  (Ky.)  519;  Hale  v.  Rice,  124  Mass.  292; 
Stafford  v.  Bacon,  1  Hill,  538;  IngersoU  v.  Martin,  58  Md.  67;  Mason  v. 
Campbell,  27  Minn.  54. 

6  Craus  V.  Hunter,  28  N.  Y.  389. 

f  Griswold  v.  Davis,  31  Yt.   390;  Allaire  v.  Hartshorne,  1  Zab.  665; 
Curtis  V.  Mohr,  18  Wis.  645;  Savings  Assn.  v.  Hunt,  17  Kan.  532. 
264 


€H.   X.]  THE    CONSIDERATION.  §     163 

paid  in  the  future.  If  the  promise  to  pay  in  the  future  is 
a  binding  obligation,  the  note  given  in  consideration  of  it  is 
absolutely  binding  to  the  amount  of  the  advances  made  un- 
der this  promise.  A  common  case  of  this  kind  is  the  de- 
posit of  a  note  or  bill  with  a  banker  to  be  discounted  and 
and  drawn  agrainst.  If  the  rio-ht  to  draw  against  it  is  made 
absolute,  it  is  a  sufficient  consideration  to  make  the  banker 
or  bank  a  holder  for  value. ^  But  where  the  obligation  to 
honor  drafts  against  the  amount  of  the  note  or  bill  is  not 
absolute,  the  bank  or  banker  is  only  a  holder  for  value  to 
the  amount  of  the  drafts  that  had  been  honored. ^ 

The  indorsement  of  a  note,  as  a  credit  on  an  unbalanced 
account,  is  founded  upon  a  sufficient  consideration,^  and 
so,  also,  is  a  note  transferred  as  collateral  for  a  fluctuating 
account.  In  such  a  case,  the  transferee  is  a  holder  for 
value  to  the  amount  of  the  balance  at  any  time  found  due.* 
But  the  prima  facie  presumption  is  always  that  the  note 
or  other  paper  is  collateral  only  for  the  balance  due  at  the 
time  it  is  given,  and  this  presumption  must  be  rebutted 
by  evidence  of  an  intention  to  cover  all  future  balances.^ 

The  liability  of  a  surety  is  also  a  sufficient  consideration 
for  an  independent  note  given  to  the  holder  of  the  old  note 
or  other  instrument  of  indebtedness;  in  settlement  of  the 
collateral  obligation. "^     And  so,  likewise,  is  the  promise  of 

1  Piatt  V.  Beebe,  57  N.  Y.  339;  Bank  of  N.  Y.  v.  Vauclerhorst,  32  N.  Y. 
653;  Melvinv.  Fellows,  33  N.  H.  401. 

2  Fulton  Bank  v.  Phoenix  Bank,  1  Hall  G19;  McBride  v.  Farmers' 
Bank,  26  N.  Y.  450. 

^  Davenport  v.  Elliott,  10  Kan.  592. 

4  Pease  v.  Hirst,  10  B.  &  C.  122;  s.  c.  5  M.  &  Ry.  99;  Collenridge  v. 
Farquharson,  1  Stark.  259;  Richards  v.  Macey,  14  M.  &  W.  484;  Bank  of 
Metropolis  v.  New  England  Bank,  1  How.  234;  s.  c.  17  Pet.  174. 

^  Byles  on  Bills,  128;  Bosanquet  v'.  Dudman,  1  Stark.  1;  Bolland  r. 
Bygrave,  1  R.  &M.  271.  See  Atwood  v.  Crowdie,  1  Stark.  483;  Wood- 
roffe  V.  Hayne,  1  C.  &  P.  600,  in  which  it  was  held  that  the  balance  of 
account  was  sufficient  to  bind  an  accommodation  acceptor  to  the  payee. 

^  Blankenship  r.  Nimmo,  50  Ala.  506. 

265 


§     1<)4  Tin:    CONSIDERATION.  [CH.  X. 

a  surety,  to  pay  the  debt  for  which  he  is  liable,  a  .sufficient 
consideration  for  the  note  given  to  him  by  the  principal 
debtor.^  So,  also,  will  an  arbitrator's  award  be  a  sufficient 
consideration  for  a  note  given  contingent  on  the  award. ^ 

Not  only  is  a  debt,  contracted  at  the  time,  a  sufficient 
consideration  for  the  instrument  executed  and  delivered  by 
the  debtor  in  testimony  thereof,  but  it  is  likewise  sufficient 
to  make  the  creditor  a  bona  fide  holder  for  value  of  any 
commercial  paper,  payable  to  the  debtor,  or  held  by  him  as 
bearer,  which  he  indorses  over  to  the  creditor  as  collateral 
security.  This  is  but  a  special  application  of  a  very  com- 
mon rule.^ 

§  164.  Existing  debt  as  a  consideration.  —  It  has  been 
generally  held  that  an  existing  debt  is  a  sufficient  considera- 
tion for  a  note  or  other  commercial  instrument.  This  is 
true,  whether  the  existing  debt  is  an  open  account  or  one 
resting  on  an  implied  contract,*  or  whether  it  is  evidenced 
by  an  old  instrument  of  indebtedness,  Avhich  is  surrendered 
for  ihe  new  instrument.  Where  the  two  instruments  are  of 
the  same   character  and  tenor,  the  exchange  is  called  a  re- 


1  Little  V.  Little,  13  Pick.  426. 

2  Woodrow  V.  O'Connor,  28  Vt.  776. 

3  Griswold  v.  Davis,  31  Vt.  390;  Chicopee  Bank  v.  Chapin,  8  Me.  40; 
Williams  V.  Smith,  2  Hill,  301;  Perdon  v.  Jones,  2  E.  D.  Smith,  106; 
Bank  of  N.  Y.  v.  Vanderhorst,  32  N.  Y.  553;  Exchange  Bk.  'v.  Butner,  60 
Ga.  654;  Mechanics'  Association  v.  Ferguson,  29  La.  549;  Louisiana  State 
Bank  v.  Gaienne,  21  La.  Ann.  551 ;  Jenkins  v.  Schaub,  14  Wis.  1 ;  Lyon  v. 
Ewing,  17  Wis.  70;  Curtis  v.  Mohr,  18  Wis.  619;  Bowman  v.  Van  Kusen, 
29  Wis.  219;  State  Savings  Assn.  v.  Hunt,  17  Kan.  532;  Best  v.  Crall,  23 
Kan.  482;  Munn  v.  McDonald,  10  Watts,  270:  Slotts  v.  Byers,  17  Iowa, 
303. 

*  Faulkner  v.  Faulkner,  73  Mo.  327;.E.stes  v.  Simpson,  13Nev.  472; 
Davenport  v.  Elliott,  10  Kan.  592;  Piatt  v.  Beebe,  57  N.  Y.  339;  Bank  of 
N.  Y.  V.  Vanderhorst,  32  N.  Y.  553;  Robson  v.  McKoiu,  18  La.  Ann.  544; 
Grifllths  V,  Parry,  16  Wis.  231 ;  Haycock  v.  Rand,  5  Cush.  26 ;  Brown  v. 
North,  21  Mo.  528;  Hammat  v.  Emerson,  27  Me.  308;  Coburn  v.  Ware,  30 
Me.  202. 

'2m 


CH.  X.]  THE    CONSIDERATION.  §     1(55 

newal.  The  surrender  of  the  old  constitutes  the  considera- 
tion of  the  new  instrument.^  In  the  case  of  renewals,  the 
consideration  of  the  original  paper  is  transferred  to  the  re- 
newal ;^  and  if  the  consideration  was  originally  defective  or 
was  extinguished  by  payment  of  the  original  paper,  the  re- 
newal is  void  for  the  want  of  a  consideration.^  But  where 
a  bill  or  note  is  g-iven  to  an  indorsee  of  a  commercial  instru- 
ment  for  value  and  without  notice,  to  take  up  and  cancel 
the  latter  instrument,  any  defects  in  the  consideration  of  the 
paper  so  cancelled  would  not  affect  the  binding  effect  of  the 
new  note  or  bill,  since  the  defense  of  want  of  consideration 
could  not  be  set  up  against  the  indorsee  even  in  an  action 
on  the  old  paper.* 

§  165.  Existing  debts,  consideration  for  indorsement 
of  commercial  paper.  —  Not  only  is  the  existing  debt  held 
to  be  a  sufficient  consideration  for  the  execution  or  ac- 
ceptance of  commercial  paper,  but  also  for  the  indorse- 
ment of  commercial  paper;  at  least,  when  the  transfer 
by  indorsement  is  made  in  payment  of  the  debt,^  whether 
the  written  evidence  of  the  debt  is  surrendered,  or  only 

1  Swift  V.  Tyson,  16  Pet.  1 ;  Townsley  v.  Samrall,  2  Pet.  170;  Brown  v. 
Leavitt,  31  N.  Y.  113;  Mechanics'  Bank  v.  Crow,  60  N.  Y.  85;  Cowing  v. 
Altmau,  71  N.  Y.  435;  O'Keefe  v.  Handy,  31  La.  Ann.  832;  Dunn  v.  Weston, 
71  Me.  270;  Howard  v.  Hinchley  Iron  Co.,  04  Me.  93;  Montrose  v.  Claris, 
2  Sandf .  115;  Pratt  v.  Coman,  37  N.  Y.  440;  Hodge  v.  First  Nat.  Bank,  22 
Gratt.  51;  Meyer  u.  Spence,  9  Mo.  App.  590;  Muirhead  v.  Kirkpatrick,  21 
Pa.  St.  237;  Gates  v.  Union  Bank,  12  Heisk.  325;  Lott  v.  Dysart,  45  Ga. 
355. 

2  Howard  v.  Hinckley  Iron  Co.,  64  Me.  93;  Gates  v.  Union  Bank,  12 
Heisk.  325. 

3  Smith  V.  Taylor,  39  Me.  242.  •- 
*  Estep  V.  Burke,  19  Ind.  87. 

5  Swift  V.  Tyson,  16  Pet.  1;  Emanuel  v.  White,  34  Miss.  5C ;  Brown  v. 
Leavitt,  31  N.  Y.  113;  Mechanics'  Nat.  Bank  v.  Crow,  60  N.  Y.  85; 
Mayer  r.  Mode,  14  Hun,  155;  Struthers  v.  Kendall,  41  Pa.  St.  214;  Cole 
V.  Saulpaugh,  48  Barb.  104;  Pond  v.  Waterloo  Agric.  Works,  50  Iowa, 
695;  Ives  v.  Farmers'   Bank,  2  Allen,  23r, ;  Norton  v.  Waite,  20   Me.  175; 

2<M 


§     lt;5  THE    rONSIDERATION.  [CH.  X. 

cancelled.^  It  is  also  a  sufficiont  consideration,  wliere 
the  paper  is  transferred  in  part  j)ayment  of  an  existing 
debt.'-  The  surrender  of  the  right  of  action  on  the  ex- 
isting debt  entirely  or  in  part,  is  in  every  such  case  the 
consideration    for    the    indorsement  of   the    paper. ^     But 

Homes  r.  Smjth,  IGMe.  117;  Smith  v.  Van  Loan,  IG  Wend.  659;  Cecil  Bank 
V.  Ileakl,  25  Mo.  5G2 ;  Marbled  Iron  Works  v.  Smith,  4  Duer,  362;  Gould  v. 
Scgof,  5  Duer,  2G0;  Stevonsou  r.  Ilylaud,  llMlnu.  198;  Williams  v.  Little, 
UN.  II.  GO ;  Rus.sell  v.  Iladduck,  8  111.  233;  Bardsloy  v.  Delp,  88  Pa.  St,  420 : 
Eobinson  r.  Lair,  31  Iowa,  0;  McCaskey  v.  Shermau,  24  Conn.  605;  Boml 
V.  Central  Bank,  2  Ga.  92;  Barney  v.  Earlc,  13  Ala.  106;  Soule  v.  Shotwell, 
62Mi.'^s.  236;  Bank  of  St.  Albans  v.  Gilliland,  23  Wend.  311;  Bank  of 
Sandusky  V.  Scoville,  24  Wend.  115, 

1  Bank  of  Salina  v.  Babcock,  21  Wend.  499,  Nelson, C.  J:  "The  court 
ought  not  to  speculate  about  the  probability  of  reviving  these  canceled 
securities  in  case  the  paper,  upon  the  strength  of  which  they  were  can- 
celed, should  turn  out  to  be  unavailable,  much  less  ought  we  to  go  into 
a  calculation  of  the  chances  of  revival  as  the  ground  of  defeating  the 
substituted  security.  It  is  enough  that  the  plaintiffs  in  good  faith 
charged  over  and  canceled  them  according  to  usage  and  held  them 
merely  to  be  sent  home.  This  is  parting  with  value  in  the  strictest 
sense  of  the  term."  See  also  Dixon  v.  Dixon,  31  Vt.  450.  But  see 
Clothier  v.  Adriance,  51  N.  Y,  322. 

2  Purchase  v,  Mattison,  3  Bosw.  310. 

3  Phoenix  Ins.  Co.  v.  Church,  81  N.  Y.  225,  Andrews,  J. :  "  In  view  of 
this  long  line  of  authorities  it  must  be  regarded  as  the  settled  doctrine 
iu  this  State  that  the  surrender  by  the  creditor  of  the  past  due  notes  of  a 
debtor,  upon  receiving  from  him  in  good  faith,  before  maturity,  the  note 
of  a  third  person  in  place  of  the  note  surrendered,  constitutes  the  credi- 
tor a  holder  for  value  of  the  note  thus  taken  and  protects  him  against 
the  defenses  and  equities  of  the  antecedent  parties,  and  that  it  is  im- 
material whether  the  note  surrendered  was  given  for  goods  sold  or 
money  loaned,  or  under  circumstances  which  would  leave  the  original 
debt  represented  by  the  note  in  existence  enforceable  against  the  delator, 
or  whether  by  surrendering  the  note,  the  creditor  parted  with  his  entire 
right  of  action."  See  also  Mix  v.  Nat.  Bank,  91  111.  20;  Worcester  Nat. 
Bank  v.  Cheney,  87  111.  602;  Manning  v.  McClure,  36  111.  490;  Bu.sh  v. 
Peckard,  3  Harr.  385;  Carlisle  z;.  Wisliart,  11  Ohio  172;  Bostwicku.  Dodge, 
1  Doug.  (Mich.)  413;  Stevens  v.  Campbell,  13  Wis.  315;  Braush  v. 
Scribner,  11  Conn.  388;  Kellogg  v.  Fancher.  23  Wis.  21 ;  Bank  of  Republic 
V,  Carrington,  5  R.  I.  516;  Mayberry  v.  Morris,  62  Ala.  IIG;  Vatterlien  v. 
Howell,  4  Sneed,  441 ;  King  v,  Doolittle,.l  Head,  77;  Worraley  v.  Lowry,  1 

268 


CH.  X.]  THE    CONSIDERATION.  §    165 

there  are  a  few  authorities  which  deny  that  there  is  in  such 
such  cases  any  consideration  sufficient  to  make  the  in- 
dorsee a  holder  for  value. ^ 

The  New  York  cases  make  a  distinction  between  abso- 
lute and  conditional  security  holding  that  only  Avhen  the 
payment  is  absolute,  is  the  indorsee  of  the  paper,  with 
which  the  payment  is  made,  a  holder  for  value.  They  hold 
that  when  a  note,  or  check,  or  other  commercial  instru- 
ment is  delivered  to  the  creditor  in  payment  of  the  original 
note  or  bill,  and  the  latter  instrument  is  not  canceled  and 
delivered  up,  the  creditor  intending  to  hold  on  to  his  or- 
iginal rights  of  action,  until  it  can  be  ascertained  Avhether 
the  instrument  taken  in  payment  is  paid  or  not,  the  credi- 
tor is  not  a  holder  for  value,  and  is  not  protected  against 
the  equities, 2  the  conclusion  of  the  courts  resting  on  the 
claim  that  the  conditional  payment  differs  in  nothing  from 
a  pledge  of  commercial  paper  as  collaterals.  But  those 
courts,  which  recognize  the  pledgee  of  commercial  paper  to 
be  in  every  instance  a  holder  for  value,  do  not  recognize 
this  distinction  between  absolute  and  conditional  payment 
as  at  all  essential ;  and  wherever  it  is  recognized  at  all, 
the  conditional  payment  has  been  held  to  be  a  sufficient 
consideration.^ 


Humph.  468;  Reddick[y.  Jones,  6  Ired.  107;  Hodges  v.  Black,  8  Mo.  App. 
389;  May  v.  Quinby,  3  Bush,  96;  Mclinight  v.  Knisley,  25  Ind.  336. 

1  Buhrman  v.  Bayles,  21  N.  Y.  S.  C.  (14  Huu)  608;  Weaver  v. 
Border,  49  N.  Y.  293;  Smiths.  DeWitts,  6  D.  &  R.  120;  Ingerson  -y. 
Starkweather,  Walker,  346;  Ingram  v.  Morgan,  4  Humph.  66;  Cardwillu. 
Hicks,  37  Barb.  458;  Scott  v.  Ocean  Bank,  23  N.  Y.  289. 

2  Phoenix  Ins.  Co.  v.  Church,  81  N.  Y.  218;  Bright  v.  Judson,  47  Barb. 
29;  Farrington  v.  Frankfort  Bank,  24  Barb.  554;  New  York  Exch.  Co.  v. 
De  Wolf,  3  Bosw.  86. 

3  In  Currie  v.  Misa,  L.  R.  10  Exch.  153,  Lush,  J.,  said:  "  The  title  to 
a  bill  on  account  of  a  pre-existing  debt,  and  payable  at  a  future  day,  does 
not  rfest  upon  the  implied  agreement  to  suspend  his  remedies.  The 
true  reason  is  that  given  by  the  court  of  Common  Pleas  in  Belshaw  v. 
Bush    (11   C.  B.  191),  as  the  foundation  of  the  judgment  in  that  case, 

269 


§     !()(]  THK    CONSIDERATION.  [CH.  X. 

§  intj.   Commercial  paper  as  collateral  security. — But 

wbeu  the  paper  is  transferred,  not  for  the  purpose  of  mak- 
ing an  absolute  payment  of  an  existing  debt,  but  merely 
to  secure  its  payment  in  the  future,  it  is  difficult  to  state 
what  the  conclusions  of  the  authorities  are;  and  the 
grounds  of  these  conclusions  vary  with  the  facts  of  each 
case.  But  in  respect  to  some  of  the  cases,  the  authorities 
are  agreed.  If  commercial  paper  is  transferred  as  collat- 
eral security  for  an  existing  debt,  and  at  the  time  that  it  is 
transferred,  other  security  is  surrendered,  the  surrender  of 
the  latter  makes  the  creditor  a  holder  for  value  of  the 
paper  indorsed  by  him.^  The  surrender  of  one  collateral 
is  a  good  consideration  for  the  transfer  of  another,  even 
though  the  former  is  worthless  and  the  debt  is  not  yet  due.^ 
There  is  a  specially  strong  consideration  for  the  new  collat- 
erals, where  not  only  the  prior  securities,  but  also  the 
written  evidence  of  the  existing  debt,  are  surrendered, 
when  the  new  collaterals  are  indorsed.^  So,  also,  where 
at  the  same  time,  the  creditor  agrees  to  give  further  time 
to  the  debtor.     Forbearance  to  sue  is  a  good  consideration 

namely  that  a  negotiable  security  given  for  such  a  puipose  is  a  condi- 
tional payment  of  the  debt,  the  condition  being  that  the  debt  revives, 
if  the  security  is  not  realized.  This  is  precisely  the  effect  which  both 
parties  intended  the  security  to  have;  and  the  doctrine  is  as  appli- 
cable to  one  species  of  security  as  to  another,  to  a  check  payable  on 
demand  as  to  a  running  bill  or  a  promissory  note  payable  to  order  or 
bearer." 

1  Meads  v.  Merchants'  Bank,  25  N.  Y.  143;  Justh  v.  Nat.  Bank  of 
Commonwealth,  5S  N.  Y.  478;  Chrysler  w.  Reno  is,  43  N.  Y.  209;  Park 
Bank  v.  "Watson,  42  N.  Y.  490;  Le  Breton  v.  Pierce,  2  Allen,  8;  Allaire  v. 
Hartshorne,  1  Zab.  GC5;  Stevens  v.  Campbell,  13  Wis.  375;  First  Nat. 
Bank  v.  Bentley,  27  Minn.  87;  Knox  v.  Clifford,  38  Wis.  G51 ;  Nichols  v. 
Bate,  10  Yerg.  429;  Mohawk  Bank  v.  Corey,  1  Hill,  513;  Youngs  v.  Lee, 
12  N.  Y.  551 ;  Pratt  v.  Comau,  37  N.  Y.  440;  Heath  v.  Silverthorn  Mining 
Co.,  39  Wis.  146. 

2  Park  Bank  v.  Watson,  42  N.  Y.  490.  See  Stevens  v.  Corn  Exch- 
Bank,  3  Huu,  150;  Huff  v.  Wagner,  63  Barb.  215. 

3  Emanuel  r.  White,  34  Miss.  56. 

270 


I 


CH.  X.]  THE    CONSIDERATION.  ^    ^^(^ 

in  itself.^  The  following  quotation  from  the  opinion  of 
the  court  in  the  leading  case  of  Goodman  v.  Simonds,^  will 
aptly  serve  to  present  the  strong  grounds  upon  which  these 
rulings  are  based.  In  the  settlement  of  an  existing  debt, 
already  due,  prior  securities  were  surrendered  on  the  re- 
ceipt of  new  notes  of  the  debtor,  secured  by  a  bill  which 
matured  twelve  or  fifteen  days  after  the  notes.  Clifford, 
J.,  said:  "When  the  settlement  was  made  the  new  notes 
were  given  in  payment  of  the  prior  indebtedness,  and  the 
collaterals  previously  held  were  surrendered  to  the  defend- 
ant, and  the  time  of  payment  was  extended  and  definitely 
fixed  by  the  terms  of  the  notes,  showing  an  agreement  to 
give  time  for  the  payment  of  a  debt  already  overdue,  and 
a  forbearance  to  enforce  remedies  for  its  recovery;  and 
the  implication  is  very  strong  that  the  delay  secured  by  the 
arrangement  constituted  the  principal  inducement  to  the 
transfer  of  the  bill.  Such  a  suspension  of  an  existing  de- 
mand is  frequently  of  the  utmost  importance  to  a  debtor, 
and  it  constitutes  one  of  the  oldest  titles  of  the  law  under 
the  head  of  forbearance,  and  has  always  been  considered  a 
sufficient  and  valid  consideration.'^     The  surrender  of  other 

1  Kingsland  v.  Pryor,  33  Ohio  St.  19;  Worcester  Nat.  Bank  v.  Cheney, 
87  111.  602;  Grocers'  Bank  v.  Penfleld,  7  Hun,  279;  Manning  v.  McClure, 
36  111.  4:98 ;  Benman  v.  Millison,  58  111.  36 ;  Francia  v.  Joseph,  3  Edw.  Ch. 
182;  Paulette  v.  Brown,  40  Mo.  54;  Webster  v.  Bainbridge,  13  Hun,  180; 
Holzworth  V.  Koch,  26  Ohio  St.  83;  York  v.  Pearson,  G3  Me.  587;-  Thomp- 
son V.  Gray,  63  Me.  228;  Fellow  v.  Prentis,  3  Denio,  520;  Atkinson  v. 
Brooks,  26  Vt.  574;  Mix  v.  Nat.  Bank,  91  111.  20;  Andrews  v.  Marrett,  58 
Me.  539;  Swift  v.  Tyson,  16  Pet.  1;  Okie  v.  Spencer,  2  Whart.  253.  For- 
bearance to  issue  an  attachment  has  been  held  to  be  insufficient.  Boone 
V.  Tharp,  Iowa  (1884),  ;  Gates  v.  National  Bank,  100  U.  S.  239. 
See  Fenonille  v.  Hamilton,  35  Ala.  319.  An  agreement  "  to  allow  the 
loan  to  remain  a  little  longer  "  too  indefinite  to  be  a  sufficient  consider- 
ation.    Atlantic  Nat.  Bank  v.  Franklin,  55  N.  Y.  235. 

2  20  How.  243. 

3  Ettingr.  Vanderlyn,  4  Johns.  237;  Morton  v.  Burr,  7  Ad.  &  El.  19; 
Baker  V.  Walker,  14  Mees.  &  Wels.  465;  Jennison  v.  Stafford,  1  Gush.  168; 
Walton  V.  Mascall,  13  Mees.&  Wels.  453;  Wheeler  v.  Slocum,  16  Pick.  62. 

271 


§     1G()  THE    CONSIDERATION.  CH.  X.] 

instruments,  although  held  as  collateral  security,  is  also  a 
good  consideration;  and  this,  as  well  as  the  former  proposi- 
tion, is  now  generally  admitted,  and  is  not  open  to  dis- 
pute. ^ 

"  It  seems  now  to  be  agreed  that,  if  there  was  a  present 
consideration  at  the  time  of  the  transfer,  independent  of 
the  previous  indebtedness,  a  party  acquiring  a  negotiable 
instrument  before  its  maturity  as  a  collateral  security  to 
a  pre-existing  debt, without  knowledge  of  the  facts  which 
impeach  the  title  as  between  the  antecedent  parties,  thereby 
becomes  a  holder  in  the  usual  course  of  business,  and 
that  his  title  is  complete,  so  that  it  will  be  unaffected 
by  any  prior  equities  between  other  parties  —  at  least  to 
the  extent  of  the  previous  debt  for  which  it  is  held  as  col- 
lateral.^ And  the  better  opinion  seems  to  be  in  respect  to 
parol  contracts,  as  a  general  rule,  that  there  is  but  one 
measure  of  the  sufficiency  of  a  consideration,  and  conse- 
quently whatever  would  have  given  validity  to  the  bill  be- 
tween the  original  parties  is  sufficient  to  uphold  a  transfer 
like  the  one  in  this  case.  We  are  not  aware  that  the  prin- 
ciple, as  thus  limited  and  qualified,  is  now  the  subject  of 
serious  dispute  anywhere,  and  that  is  amply  sufficient  for 
the  decision  of  this  cause."  ^ 

^  Citing  Dupeaii  v.  Waclclincton,  6  Whart.  220;  Hornblower  v.  Proud,  2 
Barn.  &  Aid.  327;  Rideout  r,  Bristow,!  Cromp  &.  Jer.  231;  Bank  of  Salina 
V.  Babcock,  21  Wend.  499;   Youngs  v.  Lee,  12  N.  Y.  551. 

2  Citing  White  v.  Springfield  Bank,  3  Sand.  (S.  C.)  222;  New  York  M. 
Iron  Work.s  v.  Smith,  4  Duer,  362. 

3  In  Atkinson  v.  Brooks,  2C  Vt.  574,  Eedfleld,  C.  J.,  said:  "  The  trans- 
action possesses  both  the  cardinal  ingredients  of  a  valuable  considera- 
tion; it  is  a  detriment  to  the  promisee,  and  an  advantage  to  the  promisor. 
And  it  is  no  satisfactory  answer  to  say,  that  the  party  wlio  takes  such 
a  bill  or  note  is  in  the  same  condition  he  was  before.  This  is  by  no 
means  certain.  He  has  for  the  time  foregone  the  collection  of  his  debt, 
and  in  such  matters  time  is  of  the  essence  of  tlie  transaction.  And  the 
debtor  thereby  gains  —  it  may  be  more  or  less  but  of  necessity  some  time 
\b  thereby  gained;  and  in  sucli  matters  this  is  always  accounted  an  ad- 
vantage, and  is  often  of  the  most  vital  consequence  to  tlie  debtor." 

272 


CH.  X.]  THE    CONSIDERATION.  §     167 

§  167.  When  agreement  for  delay  may  be  implied  as 
the  consideration.  —  Not  only  would  forbearance  be  a 
sufficient  consideration  to  make  the  indorsee  of  collaterals 
a  holder  for  value,  when  the  forbearance  is  provided  for  by 
express  agreement;  but,  also,  when  it  can  be  fairly  implied 
from  the  nature  of  the  transaction.  And  it  has  been  held 
in  more  than  one  case,  that  when  collaterals  are  given  for 
securing  the  payment  of  an  overdue  debt,  there  is  an  im- 
plied agreement  for  delay  in  payment  until  the  collaterals 
mature.  If  an  agreement  for  delay  is  not  to  be  implied  in 
such  a  case,  it  is  difficult  to  see  what  reason  can  be  assigned 
for  the  transfer  of  the  collaterals.  Embarrassed  debtors  are 
not  in  the  habit  of  furnishing  collateral  security  for  their 
overdue  obligations,  unless  they  expect  to  gain  some  bene- 
fit. Circumstances  may  exist,  under  which  it  would  not 
be  fair  to  imply  an  agreement  for  delay  from  the  fact 
that  the  debt  was  already  due  when  the  collateral  was 
given;  as,  for  example,  when  for  the  sake  of  friendship  an 
insolvent  debtor  may  wish  to  secure  one  of  his  creditors. 
But  these  circumstances  are  unusual;  and,  as  a  general  rule, 
the  debtor  does  expect  forbearance  to  sue,  as  a  result  of 
giving  the  security.^     But  there  are  authorities  which  deny 

1  In  Manning  v.  McClure,  36  111.  498,  Lawrence,  J.,  said:  ''It  is  said 
that  the  position  of  the  indorsee,  in  cases  of  this  kind,  is  not  different 
from  that  of  a  general  assignee  for  the  benefit  of  creditors.  What  we 
have  already  said  shows  wherein,  in  our  opinion,  the  difference  consists. 
In  the  case  of  a  general  assignment,  there  is  no  ground  for  priesuming 
forbearance  as  one  of  the  objects,  or  any  implied  agreement  to  forbear 
on  the  part  of  the  creditors.  Indeed,  these  general  assignments  are  or- 
dinarily made  without  the  wish  or  knowledge  of  the  creditors,  and  where 
the  object  is  not  fraud  it  is  generally  to  secure  an  equal  distribution  of 
the  assets.  The  assignee  is  a  mere  trustee  to  collect  what  may  be  due 
the  assignor  for  the  benefit  of  his  creditors.  We  have  stated  why,  in 
our  opinion,  the  equity  is  with  the  indorsee,  to  wit,  that  by  the  almost 
universal  usage  of  the  world  of  commerce,  a  transaction  of  this  sort  is 
understood  by  the  parties  to  imply  further  forbearance  on  the  pre-exist- 
ing debt,  and  thus  the  indorsee  is  lulled  into  a  false  security  by  means 
of  an  instrument  which  the  person  sought  to  be  held  liable  has  made  and 

18  273 


§     1(J7  THE    rONSIDKKATIOX.  [CH.  X. 

that  there  is  any  implied  agreement  for  delay,  when  col- 
lateral security  not  yet  due  is  given  for  an  overdue  debt.^ 
And  it  seems  that  in  no  case  is  an  agreement  for  delay  ever 
implied,  whore  the  amount  of  the  collateral  is  less  than  that 
of  the  debt. 2 

It  has  also  been  held  that  the  agreement  for  delay  can- 
not be  implied  from  the  fact  that  the  collateral   matures 


put  into  circulation."  Blancliard  v.  Stevens,  3  Cush.  168,  Dewey,  J.: 
"  All  of  the  cases,  those  of  the  New  York  courts  inclusive,  concur  in  this, 
that  if  the  party  receiving  the  note  parts  with  anything  valuable,  he  is 
entitled  to  enforce  the  payment  of  the  note,  irrespective  of  the  equities 
as  between  the  original  parties.  But  may  you  not  as  well  show  a  legal 
consideration  by  showing  forbearance  to  act  as  by  showing  an  act  done? 
A  damage  to  the  promisee  is  all  that  is  necessary  to  show  a  considera- 
tion for  a  promise ;  and  ought  not  the  same  rule  to  apply  in  protection 
of  a  note  transferred  to  him?  If  the  party  had  not  received  the  note  as 
collateral  security,  he  might  have  pursued  other  remedies  to  enforce  se- 
curity or  payment  of  his  debt.  He  might  have  obtained  other  securities 
or  perhaps  payment  in  money.  It  is  a  fallacy  to  say  that,  if  the  plaintiffs 
are  defeated  in  their  attempt  to  enforce  the  payment  of  these  notes,  they 
are  in  as  good  a  situation  as  they  would,  have  been  if  the  notes  had  not 
been  transferred  to  them.  That  fact  is  assumed,  not  proved,  and,  from 
the  very  nature  of  the  case,  is  matter  of  entire  uncertainty.  The  con- 
venience and  safety  of  those  dealing  in  negotiable  paper  seem  to  require 
and  justify  the  rule  that  when  a  person  takes  a  negotiable  note  not  over- 
due or  apparently  dishonored,  and  without  notice,  actual  or  otherwise, 
of  want  of  consideration  or  other  defense  thereto,  whether  in  payment 
of  a  precedent  debt,  or  as  collateral  security  for  a  debt,  the  holder  would 
have  the  legal  right  to  enforce  the  same  against  the  parties  thereto,  not- 
withstanding such  defense  might  not  have  been  effectual  as  between  the 
original  parties  thereto."  See  also  to  the  same  effect,  Worcester  Nat. 
Bank  v.  Cheney,  87  111.  602;  Lewis  v.  Rogers,  2  Jones  &  S.  C4;  Thomp- 
son V.  Gray,  G3  Me.  228;  Okie  v.  Spencer,  2  Whart.  253.  See  generally 
in  reference  to  the  implied  extension  of  time  of  payment,  Taylor  v.  Allen 
30  Barb.  294;  Eisner  v.  Keller,  3  Daly,  485;  Andrews  v.  Marrett,  58  Me. 
539;  Hart  v.  Hudson,  6  Duer,  304;  Fellow  v.  Prentiss,  3  Denio,  520; 
Bring  v.  Clarkson,  1  B.  &  C.  14;  Kendrick  v.  Lomax,  2  Cr.  &  J.  405. 

1  Moore  v.  Ryder,  65  N.  Y.  438;  Sawyer  v.  Moran,  3  Tenn.  Ch.  36; 
Richardson  v.  Rice,  Tenn.  (1878)  ;  Bowman  v.  Van  Kureu,  29 
Wis.  220. 

2  Michigan  State  Bank  v.  Leavenworth,  28  Vt.  209;  Redfleid  &  Bige- 
low's  Lead.  Cases,  203. 

274 


Cir.  X.l  THE    CON.SIDERATIOX.  §     1G8 

after  the  debt,  when  the  transfer  was  made  before  the  debt 
falls  due.  The  debt  must  be  overdue,  when  the  collateral 
is  indorsed,  in  order  to  raise  the  implication  of  an  agree- 
ment for  delay. ^  And  the  reasoning  against  the  implica- 
tion of  such  an  agreement  becomes  stronger,  when  the 
collateral  matures  before  the  debt.  There  cannot  possibly 
be  an  implied  agreement  under  such  a  state  of  facts.^  If 
the  indorsee  of  such  a  collateral  can  be  at  all  considered  a 
holder  for  value,  it  must  be  on  the  ground  that  the -mere 
pledge  of  a  commercial  instrument  for  an  honest  debt 
makes  the  pledgee  a  holder  for  value. ^ 

§  168.  Every  pledge  of  commercial  paper  founded 
upon  sufficient  consideration.  — Where  there  is  no  express 
or  implied  agreement  for  forbearance,  no  surrender  of 
other  collaterals  and  no  other  specific  consideration  for  the 
transfer  of  commercial  paper  as  collaterals,  it  would  seem, 
from  the  study  of  the  general  subject  of  consideration  in 
the  law  of  contracts,  that  the  indorsee  of  such  paper  can- 
not be  considered  a  holder  for  value.  And  such  'is  the 
conclusion  of  some  of   the  cases.*     But  very  many  of  the 


'  Lewis  V.  Jones,  2  Jones  &  S.  64. 

2  Atkinson  v.  Brooks,  26  Vt.  574,  Redfield,  C.  J.:  "If  one  holds  a  debt 
due  six  months  hence,  and  his  debtor,  as  a  mere  volunteer  service,  indorses 
a  current  note  or  bill  as  collateral  security,  the  collateral  being  due  in  three 
months,  it  could  not  be  made  to  appear  that  such  transaction,  before  the 
indorsee  had  been  at  any  pains  in  the  matter,  Tvas  a  contract  upon  con- 
sideration. The  prior  debt  not  being  due,  the  creditor  could  forego 
nothing,  and  the  debtor  receive  no  advantage  from  the  transaction.  And 
the  agreement  to  apply  the  collateral  upon  a  debt  not  yet  due,  —  being 
without  consideration  —  would  probably,  in  the  first  instance,  be 
revocable  at  will ,  and  so,  also,  as  long  as  the  parties  remained  in  the  same 
situation."     See  also  Bowman  v.  Van  Kuren,  29  Wis.  218. 

3  1  Daniel's  Negot.  Inst.,  §  826.     See  post,  §  168. 

*  Wagner  v.  Simmons,  61  Ala.  143;  Goodman  v.  Simonds,  19  Mo.  106; 
Grant  v.  Kidwell,  30  Mo.  455;  Brainard  v.  Davis,  2  Mo.  App.  490;  Napier 
r.  Elam,  5  Ycrg.  108;  Buhrmau  r.  Baylis,  14  Hun,  608;  Chesbrough  v. 
Wright,  41  Barb.  .28;  Eosa  v.   Brotherson,  10  Wend.  86;  Ontario  Bank 

275 


§     1>)8  THE    COXSIDKKATION.  [CM.   X. 

cases,  both  in  EngluDcl  and  in  this  country,  hold  that  the 
more  pledge  of  commercial  paper,  without  any  specitic 
consideration,  for  an  honest  debt  makes  the  pledgee  a 
holder  for  value ;  on  the  ground  that  the  possession  of  an 
apparently  reliable  collateral  gives  the  creditor  a  sense  of 
security  which  relaxes  his  vigilance  and  prompts  a  leniency 
towards  the  debtor,  which  he  would  not  otherwise  manifest. 
Under  these  circumstances  he  may  have  overlooked  other 
opportunities  for  collecting  the  debt;  and  in  this  way  he 
suffers  a  detriment  which  constitutes  a  sufficient  considera- 
tion for  the  pledge  of  the  collateral. ^ 

V.  Worthington,  12  Wend.  GOO;  Jones  v.  Schreyer,  49  N.  Y.  G74;  Law- 
rence V.  Clark,  36  N.  Y.  128;  Turner  v.  Tredway,  53  N.  Y.  050;  Corn- 
stock  V.  Hier,  73  N.  Y.  269 ;  Farrington  v.  Frankfort  Bank,  24  Barb. 
554;  Cardwell  v.  Hicks,  37  Barb.  458;  Lenheim  w.  Wilmarding,  55  Pa. 
St  73;  Smith  v.  Hoagland,  78  Pa.  St.  252;  Royer  v.  Keystone  Nat.  Bank, 
83  Pa.  St.  248 ;  Riley  v.  Johnson,  8  Ohio,  528 :  Reddick  v.  Jones,  6  Ired. 
107;  Rhea  v.  Allison,  3  Head,  176;  Van  Patton  v.  Beals,  46  Iowa,  62; 
Smith  r.'DeWitts,  6  D.  &  R.  120;  Union  Bank  v.  Barber,  56  Iowa,  559; 
De  La  Chaumette  v.  Bank  of  England,  9  B.  &  C.  208;  Stewart  v.  Small, 
2  Barb.  559. 

1  "  "We  are  of  opinion  that  the  undertaking  of  the  bank  to  fix  the  liability 
of  prior  parties,  by  due  presentation  for  payment,  and  due  notice  in  case 
of  non-payment  —  an  undertaking  necessarily  implied  by  becoming  a 
party  to  the  instrument  —  was  a  sufficient  consideration  to  protect  it 
against  equities  existing  between  the  other  parties,  of  which  it  had  no 
notice.  It  assumes  the  duties  and  responsibilities  of  a  holder  for  value, 
and  should  have  the  rights  and  privileges  pertaining  to  that  posi- 
tion. *  *  *  Our  conclusion,  therefore,  is,  that  the  transfer  before 
maturity  of  negotiable  paper  as  security  for  an  antecedent  debt  merely, 
without  other  circumstances,  if  the  paper  be  so  indorsed  that  the  holder 
becomes  a  party  to  the  instrument,  although  the  transfer  is  without 
express  agreement  by  the  creditor  for  indulgence,  is  not  an  improper 
use  of  such  paper,  and  is  as  much  in  the  usual  course  of  commercial 
business  as  its  transfer  in  the  payment  of  such  debt,"  Harlan,  J., 
in  B.  C.  &  N.  Railroad  Co.  v.  National  Bank  of  Republic,  102  U.  S- 
25.  In  the  same  case  Clifford,  J.,  said:  "Bills  and  notes  of  the  kind 
indorsed  in  blank,  or  payable  to  bearer,  when  transferred  to  an  innocent 
holder,  create  the  same  liability  as  if  indorsed  at  the  time  of  the  trans- 
fer." "  The  holder  is  naturally  lulled  into  security  and  inactivity  by 
crediting  the  face  of  the  note ;  and  he  should  not  be  made  to  suffer  by 
27fi 


CH.  X.]  THE    CONSIDERATION.*  §    169 

§  169.  The  New  York  decisions. — The  decisions  of 
the  New  York  courts,  on  all  the  branches  of  the  question 
which  have  been  discussed  in  the  paragraphs  immediately 
preceding,  are  exceedingly  confusing  and  very  difficult  to 
classify  and  arrange.  A  full  discussion  of  the  variations  of 
opinion,  manifested  by  them,  would  consume  more  space 
than  is  possible  to  devote  to  it,  and  a  brief  statement  must 
suffice,  which  we  quote  from  the  author  of  "  Negotiable 
Instruments."  Mr.  Daniel  has  classified  them  as  follows:^ 
**  The  transferee  has  been  declared  to  be  entitled  to  pro- 
tection as  a  bona  fide  holder  for  value  in  the  following 
instances :  ( 1 )  Where  the  collateral  note  was  taken  for  a 
loan  contracted  on  the  faith  of  its  transfer ;''  (2)  where 
the   transferee  of   the  note  surrendered  a  security  for  the 

the  maker  for  confldence  which  his  own  promise  created."  1  Daniel's 
Negot.  Inst.,  §  831a.  See  also,  to  the  same  effect,  Maitland  v.  Citi- 
zens' National  Bank,  40  M-d.  540 ;  Straughan  v.  Fairchild,  80  Ind.  598 
Ives  V.  Farmers'  Bank,  2  Allen,  236;  Blum  v,  "Loggins,  53  Tex.  121 
Stoddard  v.  Kimball,  6  Cush.  469;  Chicopee  Bank  v.  Chapin,  8  Met.  40 
Blanchard  v.  Stevens,  3  Cush.  162;  Allaire  v.  Hartshorne,  1  Zab.  665 
Palmer  v.  Richards,  1  Eng.  L.  &  Eq.  529;  Eoxborough  v.  Messick,  6  Ohio 
St.  448;  Bertrand  v.  Barkman,  8  Eng.  (Ark.)  150;  Pi-entice  v.  Zane,  2 
Gratt.  262;  Cullum  v.  Brauck  Bank,  4  Ala.  21;  Payne  v.  Bensley,  8  Cal. 
260.  In  California  the  forfeiture  of  tlie  rights  to  issue  an  attachment, 
which,  by  the  provisions  of  the  statute  law,  resulted  from  the  taking  of 
security,  is  held  to  be  in  all  cases  a  sufficient  consideration  for  the  col- 
lateral. Naglee  v.  Lyman,  14  Cal.  355;  Payne  v.  Bensley,  8  Cal.  260. 
See  Percival  v.  Framptou,  2  C.  M.  &  R.  180;  s.  c.  3  Dowl.  748;  Foster  v. 
Pearson,  1  C.  M.  &  R.  849;  s.  c.  5  Tyrw.  255;  Gates  v.  National  Bank, 
100  U.  S.  239;  Brush  v.  Scribner,  11  Conn.  388;  Bridge  City  Bank  v. 
Welch,  29  Conn.  475;  Quinn  v.  Heard,  43  Vt.  375;  Russell  v.  Splater,  47 
Vt.  273;  Bush  v.  Peckard,  3  Harr.  385;  Outhwite  v.  Miner,  13  Mich.  533; 
Smith  V.  Lockridge,  8  Bush,  4'23;  Savior  v.  Daniels,  37  111.  331;  Bardsley 
V.  Delp,  88  Pa.  St.  420;  Stedman  y.  Carstairs,  97  Pa.  St.  234;  Green  v. 
Kennedy,  6  Mo.  App.  577;  Grocers'  Bank  v.  Penfleld,  69  N.  Y.  502; 
Farmers'  Bank  v.  Willis,  7  W.  Va.  31;  Citizens'  Bank  v.  Payne,  18  La. 
Ann.  222;  Carlisle  ».  Wishart,  11  Ohio,  172. 

1  Daniel's  Negot.  Inst.,  §  831c. 

2  Williams  v.  Smith,  2  Hill,  301 ;  Bank  of  New  York  v.  Vanderhorst, 
32  N.  Y.  553. 

277 


§     IGS)  THE    COXSIDKIIATION.  [CH.  X. 

antecedent  debt;^  (3)  whore  he  received  the  note  in  piiy- 
meut  of  a  previous  note  which  wiis  surrendered  and  can- 
celled;'- (4)  where  he  received  the  note  as  absolute  pay- 
ment of  a  pre-existing  debt  and  not  merely  as  security;  ^ 
(5)  where  he  received  the  note  with  a  valid  agreement  for 
extension  of  time,  or  with  an  agreement  not  to  sue  upon 
a  pre-existing  debt;*  (6)  where  he  received  the  note, 
paj'ing  part  cash,  and  applying  the  residue  in  payment  of 
a  pre-existing  debt;^  (7)  where  he  received  the  note  in 
part  payment  of  the  pre-existing  debt,  surrenderino;  old 
notes  and  taking  new  notes  for  balance;^  (8)  where  he 
received  the  note  and  discontinued  proceedings  upon  an 
execution.^ 

*'  And  the  transferee  has  been  held  not  entitled  to  pro- 
tection as  a  purchaser  for  value  :  ( 1 )  AVhere  the  note  trans- 
ferred w'as  hypothecated  as  security  for  a  pre-existing  debt ;  ^ 
(2)  where  the  note  was  transferred  as  collateral  security, 
and  there  was  an  agreement  for  forbearance  and  the  sur- 
render of  a  collateral  note  previously  held  ;  ^    (3)   where 

1  Bank  of  Saiina  v.  Babcock,  21  Wend.  499;  Park  Bank  v.  Watson,  42 
N.  Y.  490;  Phoenix  Ins.  Co.  v.  Church,  81  N.  Y.  222;  Goodwin  v.  Conkliu, 
85  N.  Y.  21;  Ayrault  v.  McQueen,  32  Barb.  305, 

2  Pratt  V.  Coman,  37  N.  Y.  440;  Brown  v.  Leavitt,  31  N.  Y.  118; 
Clothier  v.  Adriance,  51  N.  Y.  32C;  Youngs  v.  Lee,  12  N.  Y.—  ;  Paddon 
V.  Taylor,  44  N.  Y.  371 ;  Day  u.  Saunders,  1  Abb.  App.  495. 

3  Bank  of  Sandusky  v.  Scoville,  24  Wend.  115;  Bank  of  St.  Albans  r. 
Gilliland,  23  Wend.  311;  Phoenix  Ins.  Co.  v.  Clmrcli,  81  N.  Y.  226;  Gould 
V.  Segee,  5  Duer,  260;  Mayer  v.  Mode,  14  Hun  (21  N.  Y.  S.  C.),155;  New 
York  Marbled  Iron  Works  v.  Smith,  4  Duer,  377;  White  v.  Springfield 
Baud,  3  Sand.  7. 

*  Merchants  &  Farmers'  Bank  v.  Wexson,  42  N.  Y.  438;  Grocers'  Bank 
V.  Panfield,  14  N.  Y.  S.  C  (7  Hun),  279. 

5  Mechanics'  &  Traders'  Bank  v.  Crow,  60  N.  Y.  85. 

6  Chrysler  v.    Renois,  43  N.  Y.  209, 
'  Boyd  V.  Cumming,  17  N.  Y.  101. 

8  Statker  v.  McDonald,  6  Hill,  93.  See  also  Webster  v  Van  Steen- 
burgh,  46  Barb.  312;  Chesbrough  v.  Wright,  41  Barb.  28;  Ontario  Bank 
V.  Worthington,  12  Wend.  600.. 

9  Prancis  v.  Joseph,  3  Edw.  Ch.  182. 

278 


i 


CH.  X.]  THE    COXSIDEKATION.  §     170 

the  note  was  transferred  on  account  of  a  precedent  debt 
(and  a  dishonest  check  surrendered),  with  no  indication 
that  it  was  taken  in  absolute  payment  beyond  that  of  a  re- 
ceipt for  it  in  payment;^  (4)  where  a  time  draft  was  fraud- 
ulently diverted  in  payment  of  a  past  due  debt;  ^  (5)  where 
the  note  was  indorsed  by  the  debtor  of  a  call  loan,  with 
agreement  for  a  little  delay,  but  with  no  definite  extension 
of  time ;  ^  ( 6 )  and  where  the  note  was  taken  in  conditional 
payment,  and  suit  on  pre-existing  debt  dismissed."  * 

§  170.  Consideration  being  debt  of  anotber.  —  Where 
the  debt  of  another  is  intended  to  be  paid  or  extinguished 
by  the  issue  of  a  commercial  paper,  the  debt  would  con- 
stitute a  sufficient  consideration.  AVhen  this  occurs,  it  be- 
comes a  complete  novation,  the  extinguishment  of  the 
existing  debt  being  the  consideration  for  the  new  promise.^ 

1  Phoenix  Ins.  Co.,  v.  Church,  81  N.  Y.  218 ;  Potts  v.  Mayer,  74  N.  Y.  594. 
In  Payne  v.  Cutter,  13  V7encl.  605,  the  note  was  charged  up  in  an  account 
as  payment,  but  the  transferee  was  held  not  to  be  a  holder  for  value.  In 
Bahrmau  t;.Bayles,  14  Hun  (21  N.  Y.  S.C.),  608,  the  note  was  taken  in  pay 
raent  of  a  pre-existing  debt,  but  the  transferee  was  held  not  a  bona  fide 
holder  for  value,  partly  upon  the  ground,  as  it  would  seem,  that  he  was 
chargeable  with  notice  of  circumstances  affecting  its  validity.  In  Schepp 
V.  Carpenter,  51  N.  Y.  G02,  Johnson,  Commissioner,  said :  "  The  existence 
of  the  debt  from  Church  to  the  plaintiff  was  a  sufficient  consideration 
between  them  to  sustain  a  promise  to  pay  it  or  a  transfer  of  property  to 
secure  its  payment,  and  according  to  the  doctrine  which  has  prevailed  in 
this  State  for  many  years,  to  sustain  the  transfer  of  a  note  made  for  the 
debtor's  accommodation  and  general  benefit.  When,  however,  an  ac- 
commodation note  has  been  made  for  a  specific  purpose,  and  has  been 
diverted  to  some  other  purpose,  the  rule  is  different,  and  the  party  as- 
serting a  title  to  it  must  show  himself  to  be  a  bona  fide  holder." 

2  Moore  v.  Ryder,  65  N.  Y.  438. 

3  Atlantic  Nat.  Bank  v.  Franklin,  55  N.  Y.  285. 
*  Warden  v.  Howell,  9  Wend.  173. 

^  Myers  v.  Van  Wagoner,  56  Mo.  115;  Sherwood  v.  Archer,  10  Hun, 
73;  Outhwite  v.  Porter,  13  Mich.  533;  Carpenter  v.  Murphree,  49  Ala.  84; 
Horn?;.  Fuller,  6  N.  H.  512;  South  Boston  Iron  Co.  v.  Brown,  63  Me.  139; 
Railroad  v.  Chamberlain,  44  N.  H.  497 ;  Gillett  v.  Ballon,  29  Vt.  296 ;  Leon- 
ard V.  Duffin,  94  Pa.  St.  218  ••  Maine  Mut.  Ins.  Co.  v.  Blunt,  64  Me.  95;  Sey- 

279 


§     170  THE    CONSIDERATION.  [CH.  X. 

And  the  original  debtor,  havins;  been  discharged  from  liabil- 
ity' by  the  is:<ue  of  a  counuercial  instrument  by  .a  third  per- 
son, may  in  like  manner  bind  himself  on  a  new  note,  issued 
for  the  purpose  of  extinguishing  the  obligation  of  this  third 
person.^  So,  too,  will  the  joint  debt  of  the  maker  and  a 
third  person  be  a  sufBcient  consideration  for  the  separate 
note  of  the  maker.-  So,  also,  is  a  note  binding  upon  the 
maker,  which  is  given  for  the  release  of  his  brother's  laud 
from  an  attachment,-^  and  a  note  by  a  parent  in  payment  of 
the  son's  defalcation.* 

But  the  old  debt  must  be  a  legal  oblisration,  in  order  that 
its  extinguishment  ma}' constitute  a  sufficient  consideration.* 
Forbearance  to  bring  suit  on  the  debt  or  other  liability 
of  one  person  is  always  a  good  consideration  for  the  com- 
mercial paper  of  another.®  It  is  likewise  a  sufficient 
consideration  for  the  indorsement  of  a  surety;^  or  of  a 
guarantor,*  and  for  an  acceptance  of  a  bill  drawn  for  the 

mouri'.  Prescott,  69  Me.  376;  Lines  v.  Smith,  4  Fla.49;  Crofts  v.  Beal,  II 
C.  B.  272;  Nickersou  v.  Hayward,  19  Jolins.  113.  A  note  given  in  settle- 
ment of  a  civil  suit  for  damages  against  tlie  maker's  brother,  is  founded 
upon  sufBcient  consideration.  Smith  v.  Richards,  29  Conn.  232.  The 
fact,  that  the  note  given  In  settlement  of  the  debt  of  another  is  less  in 
amount  than  the  debt,  does  not  affect  the  holder's  title.  Harrod  v.  Black 
1  Duy.  180. 

1  Corapton  V.  Blair,  27  Mich.  397. 

2  Hej-wood  V.  Watson,  4  Bing.  496 ;.s.  c.  1  M.  &  P.  268. 

3  Bradbury  v.  Blake,  2.5  Me.  397; 

*  Popple  V.  Day,  123  Mass.  520. 

«  Bullock  V.  Ogburn,  13  Ala.  346.  But  see  Leonard  v.  Duffln,  94  Pa. 
St.  218,  in  which  the  moral  obligation  of  a  married  woman  was  held  to  be 
a  sufficient  consideration  for  the  note  of  another. 

6  Silvis  V.  Ely,  3  Watts  &  S.  420;  M.  &  F.  Bank  of  Albany  v.  Wixson, 
42  N.  Y.  438;  Abbott  v.  Fisher,  124  Mass.  414;  Randolph  v.  Peck,  I  Hun, 
125. 

'  Bell  V.  Simpson,  75  Mo.  485;  Jennison  v.  Stafford,  1  Cush.  168; 
Rood  V.  Jones,  1  Dougl.  (Mich.)  188;  Hockenbury  v.  Meyers,  5  Vroom, 
347;  Chaddock  v.  Vauuess,  6  Vroom,  518;  Hallr.  Clopton,  56  Miss.  555. 

*  Worcester  Bank  T?.  Hill,  113  Mass.  25;  Howards.  Jones,  13  Mo.  App. 
596 

280 


CH.  X.]  THE    CONSIDERATION.  §     170 

accommodation  of  the  drawer.^  And  where  a  commercial 
instrumeut^given  in  settlement  of  an  existing  debt,  is  pay- 
able in  the  future,  it  is  held  that  forbearance  is  implied.^ 
But  if  there  is  no  extinguishment  of  the  existing  debt,  and 
no  forbearance  or  any  other  new  consideration,  such  as  the 
surrender  of  collateral  security,^  the  note  or  bill  given  for 
another's  debt  is  held  to  be  without  consideration.* 

But  it  would  seem  that  if  the  fact  of  the  creditor  being 
lulled  into  security  by  the  transfer  to  him  of  collateral 
security  is  to  be  considered  a  sufficient  consideration  for 
the  transfer  of  the  security,^  the  same  conclusion  is  ten- 
able in  this  connection.  A  debt  is  in  both  cases  to  be 
secured,  and  there  is  no  difference,  in  the  matter  of  con- 
sideration, between  the  indorsement  and  the  execution  of  a 
commercial  instrument.  If  different  conclusions  in  the  two 
cases  are  to  be  justified,  it  cannot  be  done  except  on  the 
ground  that  for  commercial  convenience  the  pledgee  of 
commercial  paper  is  held  to  be  a  holder  for  value,  notwith- 
standing there  is  no  consideration  present,  of  the  kind  re- 
quired for  the  support  of  the  paper  as  between  the  original 
parties.® 

1  Walker  v.  Sherman,  11  Met.  170;  Pierce  v.  Kittredge,  115  Mass.  374. 

2  Thompsouu.  Gray,  63  Me.  226;  York  v.  Pearson,  63  Me.  587;  Popple- 
well  V.  Wilson,  1  Stra.  264;  Ridout  v.  Bristou,  1  Cromp.  &  J.  231 ;  s.  c.  1 
Tyrw.  84;  Andrews  v.  Marrett,  58  Me.  539;  Munson  v.  Adams,  89  111. 
450;  Garnet  v.  Clarke,  11  Mod.  226;  Baker  v.  Walker,  14  M.  &  W.  405; 
Wilders  v.  Stevens,  15  M.  &  W.  208;  Sowerby  v.  Butcher,  2  C.  &  M.  372; 
s.  c.  4  Tyrw.  320;  Combs,  v.  Ingram,  4  D.  &.  R.  211. 

3  Rust  v.,  Hauselt,  14  Jones  &  S.  22;  Wright  v.  Hughes,  13  lud.  109; 
Brandbury  v.  Blake,  25  Me.  397. 

*  Bingham  v.  Kimball,  17  Ind.  396;  Mansfield  v.  Corbiu,  2  Cush  151; 
Potter  V.  Earnest,  45  Ind.  416;  Cook  v.  Bradley,  7  Conn.  57;  McElven  v. 
Sloan,  56  Ga.  208;  Murphy  v.  Keyes,  7  Jones  &  S.  78.  And  mere  credit- 
ing the  account  of  the  debt  with  the  amount  of  the  paper  has  been  held 
to  be  insufficient.     Stoudenmlre  v.  Ware,  48  Ala.  589. 

5  See  ante,  §  168.  ' 

6  In  Currie  v.  Misa,  L.  R.  10  Exch.  153,  Lord  Coleridge,  Ch.  J.,  says: 
"  It  Is  too  late  to  dispute  that  a  pre-existing  debt  due  to  the  transferee 

281 


§     170  TH!<:    CONSIDKKATION.  [CH.  X. 

It  is  sometimes  thought,  or  ut  least  felt,  that  close  relation- 
ship between  the  debtor  and  the  maker  of  the  commercial 
instrument  does  away  with  the  necessity  of  a  consider- 
ation; as,  for  example,  where  a  father  issues  his  note  or 
bill  in  payment  of  his  sou's  debts,  or  a  son  promises  to 
pay  his  father's  debts.  In  all  such  cases,  if  there  is  no 
specific  consideration  supporting  the  promise,  such  as  the 
extinguishment  of  the  debt,  or  the  forbearance  to  sue,  the 
commercial  instrument  is  not  binding,  notwithstanding  this 
close  relationship.^  But  where  there  is  a  distinct  consider- 
ation, as  where  a  defalcation  by  the  son  is  settled  by  the 
father's  note,  or  the  original  note  or  bill  is  surrendered  and 
canceled  on  receipt  of  the  new  note,  the  new  paper  is  bind- 
ing. ^  For  the  same  reasons,  a  widow  is  not  bound  by  her 
note,  given  to  satisfy  the  bill  of  the  physician  who  attended 
her  husband  in  his  last  illness,  or  to  liquidate  any  other  in- 
debtedness of  her  husband,  if  she  does  not  receive  any 
property  from  her  husband's  estate.'^  And  naturally,  and 
for  stronger  reasons,  the  wife's  note,  given  for  the  debt  of 
her   husband,  without    consideration,  does  not  bind  her.* 

of  a  bill  entitles  him  to  all  the  rights  of  a  holder  for  value.  But  it  seem 
equally  clear  that  this  is  an  exception  to  general  rules,  an  extraordinary 
protection  given  to  such  a  holder  on  grounds  of  commercial  policy  only, 
and  in  order  to  favor  the  unrestricted  use  as  currency  of  negotiable  in- 
struments." 

1  Mansfield  u.  Corbin,  2  Cush.  151;  Potter  r.  Earnest,  45  Ind.  416; 
Cook  V.  Bradley,  7  Conn.  57:  McElven  v.  Sloan,  5<J  Ga.  208;  Murphy  v. 
Keyes,  7  Jones  &  S.  18. 

2  Popple  V.  Day,  123- Mass.  520;  Seymour  v.  Prescott,  69  Me.  376; 
Myers  v.  Van  Wagoner,  56  Mo.  115.  And  even  the  surrender  of  the  note 
made  by  a  father  has  been  held  to  be  insufficient  as  a  consideration  for 
the  sou's  note.     Rowland  v.  Harris,  55  Ga.  141. 

3  Williams  v.  Nichols,  10  Gray,  83;  Hetheriugton  v.  Hixon,  46  Ala. 
297. 

*  Alger  V.  Scott,  54  N.  Y.  14;    Williams  v.  Walker,  18  S.  C  577.     And 

in  those  States  in  which  the    common-law   disability  of  coverture  still 

exists,  a  note  of  a  widow,  given  after   her  husband's  death  for  a  joint 

note  of  botli,  would  be  without  consideration,  and  is  not  binding  upon 

282 


t 


CH.  X.]  THE    CONSIDERATION.  §    1''0 

But  where  the  widow  receives  assets  from  her  husband's 
estate,  she  will  be  bound  by  her  obligations,  issued  in  pay- 
ment of  his  debts,  at  least  to  the  amount  of  the  assets  she 
received.^  In  like  manner,  will  the  executor,  the  adminis- 
trator, and  the  guardian,  not  be  liable  on  their  promises  to 
pay  claims  against  the  estates  they  have  in  charge,  unless 
in  consequence  of  their  promises  the  estate  is  relieved  from 
liability  or  there  is  a  forbearance  to  sue  the  estate.^  But  if 
these  representatives  have  in  possession  assets  of  the  estates, 
they  will  then  be  liable  on  their  notes,  at  least  to  the 
amount  of  the  assets  in  their  possession.^ 

It  has  been  held  that  the  administrator's  note  is  not 
affected  by  the  fact  that  the  debt  of  the  deceased,  for 
which  it  was  given,  is  barred  by  the  statute  of  limitations.* 
On  the  other  hand,  it  was  decided  that  the  moral  obliga- 
tion, arising  out  of  a  barred  debt  of  the  ancestor,  was  not 
a  sufficient  consideration  for  the  note  of  the  heir.^ 

It  is  also  necessary  to  make  the  paper  binding,  for  the 
payee  to  be  connected  with  the  consideration,  i.e.,  since  in 

her  unless  she  had  a  separate   estate,  on   which   it  could   be    charged. 
Coward  v.  Hughes,  1  K.  &  J.  443. 

1  Mull  V.  Van  Trees,  50  Cal.  547.     But  see  Maull  v.  Vaughn,  45  Ala. 
134,  where  her  possession  of  assets,  before  the  administration  upon  the , 
husband's  estate,  was  held  to  be  insufficient  to   support  her  note  for  his 
debts.  ' 

2  In  respect  to  executors  and  administrators,  see  Thompsons.  Maughn, 
3  Iowa,  442;  Ten  Eyck  v.  Vanderpoel,  8  Johns.  120;  Schoomakeru.  Roosa, 
17  Johns.  301;  Bank  of  Troy  v.  Topping,  9  Wend  273;  Kucker  v.  Wad- 
lington,  5  J.  J.  Marsh.  238.  An  agreement  to  forbearance  has  been  im- 
plied from  the  promise  to  pay  interest  on  debt  of  the  deceased  (Childs 
V.  Monin,  2  Brod.  v.  Bing.  460),  and  from  the  act  of  substituting  the  ad- 
ministrator's note  for  that  of  the  intestate.  Harrison  v.  McClellan,  §  57 
Ga.  531.  In  respect  to  guardians,  see  Thatcher  v.  Dinsmore,  Wren  v. 
Hoffman,  41  Miss.  61C;  Coleman  v.  Davies,  45  Ga.  489. 

3  Byrd  v.  HoUoway,  6  Sm.  &  M.  199;  Rittenhouse  v.  Amermau,  G4  Mo. 
197 ;McGrath U.Barnes,  13  S.  C.  323;  Stevenson  v.  Edwards,  27  La  Ann. 
302. 

•   *  Wheatou  v.  Wilmarth,  13  Met.  422. 
5  Didlake  v.  Robb.  1  Woods  C.  C.  G80. 

283 


§    172  THK    CONSIDERATION.  [CH.   X. 

such  cases  there  is  no  benefit  to  the  promisor,  there  must 
be  a  detriment  to  the  i)romisee.  Tlie  debt  of  a  deceased 
person,  leaving  no  lieir  or  representative,  cannot  be  the 
consideration  of  a  note  of  a  third  person.^  And  a  debt  due 
to  a  deceased  person  or  to  a  minor,  will  not  constitute  a  suf- 
ficient consideration  for  a  note  to  the  administrator  of  the 
deceased's  administrator  or  of  the  minor's  guardian. ^  And 
so,  likewise,  a  due  bill  to  the  husband  is  not  a  legal  consid- 
eration for  a  note  to  the  widow.''  But  it  has  been  held 
that  a  note  given,  in  satisfaction  of  a  debt  due  to  a  de- 
ceased person,  to  one  who  expects  to  be  and  is  subse- 
quently appointed  administrator,  with  the  understanding 
that  the  payee  will,  after  his  appointment,  give  the  maker 
a  receipt  for  the  debt  due  to  the  deceased,  is  supported  by 
a  competent  consideration,  notwithstanding  the  payee  and 
prospective  administrator  fails  to  execute 'his  promise.* 

§  171.   Valuable    consideration    other  than  money. — 

There  are  other  sufficient  considerations,  besides  money; 
but  in  order  that  a  consideration  may  be  sufficient  to  make 
the  payee  or  indorsee  of  commercial  paper  a  holder  for 
value,  it  must  have,  if  not  a  monetary,  at  least  a  substan- 
tial value.  In  the  succeeding  sections,  the  more  common 
kinds  of  valuable  consideration  of  this  class  will  be 
enumerated    and    explained. 

§  172.  Transfer  of  property  —  Continjfent  and  equit- 
able interests.  —  It  needs  only  to  be  stated  that  the 
purchase  of  all  kinds  of  property,  both  real  and  personal, 
will  form  a  suflScient  consideration  for  a  note  or  other  com- 

1  Nelson  );.  Serle,  4  M.  &  W.  795,  reversing  Serle  v.  Waterworth,  4 
M.  &  W.  9;  s.  c.  6  Dowl.  684. 

2  Towles  V.  Towles,  21  Vt.  181. 
*  Bryau  v.  Philpot,  3  Ired.  4(57. 

■*  Nelsou  V.  Lovejoy,  14  Ala.  5(58. 
284 


CH.  X.}  THE    CONSIDERATION.  §    172 

mercial  obligation/  even  when  the  right  of  property  pur- 
chased is  contingent  or  equitable  in  character.  Thus,  the 
sale  of  land,  subject  to  a  mortgage-,  is  a  sufficient  consider- 
ation, although  the  right  sold  is  only  an  equity  of  redemp- 
tion? So,  also,  where  the  title  presently  acquired  is  only 
executory,  the  understanding  being  that  the  absolute  title 
is  to  pass  when  the  last  installment  of  the  purchase  money 
is  paid.^  And  so,  likewise,  in  respect  to  any  other  equit- 
able title. ^  The  transfer  of  incorporeal  rights  will  be  as 
good  a  consideration  for  commercial  paper  as  the  transfer 
of  corporeal  property.  Thus,  the  good  will  of  the  business,* 
the  rights  of  corporate  membership,^  a  franchise  and  other 
incorporeal  hereditaments,^  and  a  policy  of  life  insurance,^ 
have  been  frequently  held  to  be  sufficient  considerations. 

Even  Avhen  the  right  is  defeasible  in  character,  its  trans- 
fer will  constitute  a  sufficient  consideration.  Thus  the  pur- 
chase of  a  franchise,  which  had  been  granted  by  a  municipal 
corporation  ultra,  vires,^  or  of  a  lease  which  contains  a  cov- 


1  Kline  v.  Spahr,  56  Ind.  29(3;  Holmes  v.  Ebersole,  12  Ind.  392.  Xot 
only  when  the  paper  is  given  in  payment,  but  also  as  collateral.  Feuby 
V.  Pritchard,  2  Sandf.  151. 

2  Hoyt  V.  Bradley,  27  Me.  2i2;  Fitzgerald  v.  Barber,  13  Mo.  App. 
192. 

3  McMath  V.  Johnson,  41  Miss.  439. 

*  Ervin  v.  Morris,  26  Kan.  664.  In  Washband  v.  Washband,  24  Conn. 
500,  the  note  was  given  for  transfer  to  the  maker  of  improvements 
■which  had  been  erected  on  another's  laud,  with  the  permission  of  the 
owuer. 

'"  Searing  t).  Lye,  4E.  D.  Smith,  197;  Smock  «.  Pierson,-68  Ind.  405. 

^  Thus,  a  note  is  founded  upon  a  sufficient  consideration,  which  is 
given  for  fees  due  by  a  member  to  the  incorporated  society.  Middlesex 
V.  Davis,  3  Met.  133;  Goree  v.  Wilson,  1  Bailey,  597.  But  not  for  fees 
due  to  an  incorporated  society  (Nightingale  v.  Barney,  4  G.  Greene,  106) ; 
nor,  it  seems,  for  dues  to  a  benevolent  association.  Nash  v.  Russell,  5 
Barb.  556. 

'  Carpentier  v.  Minturn,  6  Lans.  56;  Long  v.  Hopkins,  50  Me.  318; 
Swauzerw.  Mayberry,  59  Cal.  91. 

8  Insurance  r.  Cardwell,  65  Ind.  138. 

^  Carpentier  i-.  Minturn,  6  Lans.  56. 

285 


§     17 -Jn  THE    CONSIDKliATIOX.  [CH.   X. 

oiiant  iigaiust  assignment,^  and  other  like  cases  of  condi- 
tional rights,^  have  boon  held  to  be  sufficient  considerations, 
since  an  actually  existing  right  passed,  notwithstanding  it 
was  defeasible.  But  where  no  right  existed,  which  could 
be  passed,  as  where  the  transfer  of  the  right,  or  the  right 
itself,  was  absolutely  void,  there  was  no  consideration  for 
the  commercial  paper  given  in  satisfaction  of  the  attempted 
transfer.^  It  is,  however,  held  that  a  quit-claim  deed  is  a 
sufficient  consideration  for  a  note,  although  the  grantor  has 
no  title  to  convey,  if  the  transaction  is  conducted  and  com- 
pleted in  good  faith.* 

§  172a.  Transfer  of  commercial  paper.  —  Commercial 
paper  being  a  species  of  property,  its  transfer  or  delivery 
will  be  sufficient  consideration  for  some  other  commercial 
instrument  not  only  when  there  is  an  outright  sale  of  the 
paper,  such  as  occurs  daily  on  the  stock  markets  of  the 
world;  but  also  by  the  comparatively  common  transaction 
among  business  men,  of  lending  their  financial  credit  to  each 
other  by  an  exchange  of  their  paper,  A.  giving  to  B.  his 
note,  or  bill,  or  check,  in  consideration  of  a  like  obligation 
from  B.^     In  the  same  manner,  the  surrender  of  one  com- 

1  Spear  v.  Fuller,  8  N.  H.  174. 

2  Hodsdon  v.  Smith,  U  N.  H.  41. 

3  The  transfer  of  a  married  woman's  property,  Fowler  v.  Shearer,  7 
Mass.  14;  the  sale  of  Indian  lauds  to  any  but  Indians,  Vickroy  v.  Pratt, 
7  Kan.  238;  Jarvis  v.  Campbell,  23  Kan.  370;  the  transfer  of  a  liquor 
license  which  is  not  transferable,  Strahn  v.  Hamilton,  38  lud.  57.  Where 
the  right  did  not  exist  at  all.  Long  v.  Hopkins,  50  Me.  318;  Swanzer  v. 
Mayberry,  59  Cal.  91.  Mere  possession  under  a  void  conveyance  will  not 
be  a  sufficient  consideration.     Sorrells  tJ.  McHeury,  38  Ark.  127. 

*  Bonney  v.  Smith,  17  111.  531;  Bachelder  v.  Lovely,  (i'j  Me.  33. 

5  Crowley  v.  Dunlop,  1  T.  R.  565;  Eaton  v.  Carey,  10  Pick.  211;  Buck- 
lers. Buttivant,  3  Ea.st,  92;  Rose  v.  Sims,  1  B.  &  Ad.  521;  Higginsou  v. 
Gray,  6  Met.  212;  Rankin  v.  Knight,  1  Cincin.  515;  Duncan  v.  Gilbert,  5 
Dutch.  521;  Mickles  v.  Colvin,  4  Barb.  304;  Byrne  v.  Schwiug,  6B.  Mou. 
199:  Williams f.  Banks,  11  Md.  198;.  Wooster  v.  Jenkins,  3  Deuio,  187; 
Whittier  v.  Eager,  1  Allen,  499;  Backus  v.  Spaulding,  116  Mass.  418; 
28() 


CH.  X.]  THE    CONSIDERATION.  §    172a 

mercial  obligation  is  a  valid  consideration  for  a  second  obli- 
jratiou  from  the  same  maker; — an  occurrence  which  is 
called  a  renewal  of  commercial  paper,  when  the  substituted 
paper  is  of  the  same  kind  as  the  original  obligation.^ 

As  a  general  proposition,  in  an  exchange  of  commercial 
paper,  each  instrument  constitutes  an  independent  contract; 
one  maker  is  not  merely  a  surety  for  the  other.  The  one 
instrument  is  the  consideration  for  the  other,  and  neither 
can  be  called  accommodation  paper. ^  Nor  does  it  affect 
the  validity  of  either,  if  one  of  them  is  not  paid,  in  conse- 
quence of  the  subsequent  insolvency  of  the  maker;  at  least, 
when  the  other  instrument  has  akeady  passed  into  the 
hands  of  a  holder  for  value. ^  But  as  long  as  both  instru- 
ments remain  in  the  hands  of  the  original  parties,  the 
instrument  remaining  unpaid  may  be  set  up  as  a  counter- 
claim in  an  action  on  the  other  instrument,  if  both  causes 
of  action  have  accrued.*  And  where  the  payment  of  one 
is  made  by  express  condition  to  depend  upon  the  execution 

Leouard  v.  Robbius,  13  Allen,  217;  White  v.  Springfield  Bank,  3  Sauclf. 
222;  First  Nat.  Bank  v.  Tisdale,  84  N.  Y.  655;  Nickerson  v.  Ruger,  84  N. 
y.  675;  Newman  u.  Frost,  52  N.  Y.  422;  Cobb  v.  Tituo,  10  N.  Y.  198;  Bas- 
sett  r.  Bassett,  55  Barb.  505;  Savage  w.  Ball,  2  C.  E.  Green,  142;  Rolfe 
V.  Caslon,  2  H.  BI.  571;  Kent  v.  Lowen,  1  Campb.  179;  Spoonerv.  Gar- 
diner, R.  &  M.  84,  Horublower  v.  Proud,  2  B.  &  Aid.  437;  Adams  v. 
Soule,  33  Vt.  538;  Luke  v.  Fisher,  10  Gush.  271. 

1  First  Nat.  Bank  v.  Tisdale,  84  N.  Y.  655 ;  Baldwin  v.  Van  Deusen, 
37  N.  Y.  487;  Bacon  v.  Holloway,  2  E.  D.  Smith,  159;  Greenwood  v. 
Lowe,  7  La.  Ann.  197.  But  in  all  such  cases,  the  surrender  of  the  old 
instrument  will  not  be  a  valid  consideration  for  the  new,  unless  the  old 
was  itself  founded  upon  a  sufficient  consideration.  See  Mason  v.  Jordan 
13  R.  I.  193. 

2  Dockray  v.  Dunn,  37  Me,  442;  Stickuey  v.  Mohler,  19  Md.  506;  /?j  re 
London,  etc.,  Bank,  L.  R.  9  Ch.  App.  686. 

3  Forward  v.  Harris,  30  Barb.  338;  Holbert  v.  Allen,  4  Fla.  87;  In  re 
Loudon,  etc..  Bank,  L.  R.  9  Ch.  App.  686.  In  the  last  case,  the  holder 
was  the  assignee   in  bankruptcy. 

^  Backus  r.  Spaulding,  116  Mass.  418.  See  Shannon  v.  Langhorn,  9 
La.  Ann.  526. 

287 


§     173  THE    CONSIDERATION.  [CH.  X. 

or  payment  of  tliQ  other,  as  where  a  note  is  given  as  coUat- 
eral  to  secure  an  acceptance  by  the  payee,  the  note  is 
without  consideration  until  the  acceptance  has  been  given 
or  honored.^ 

§  173.  Contract  for  services. — Agreements  to  render 
certain  services,  or  the  actual  performance  of  them,  will 
ordmarily  be  a  sufficient  consideration  for  a  commercial  in- 
strument, the  rendition  of  the  service  being  a  benefit  to  the 
promisor,  and  a  detriment  to  the  promisee.  The  character 
of  these  services  is  as  varied  as  are  the  nature  and  demands 
of  man.  It  seems  that  the  performance  of  any  service, 
which  has  a  real  value,  will  be  a  sufficient  consideration.^ 
Services  rendered  in  procuring  a  pardon  for  a  convicted 
criminal  would  be  a  sufficient  consideration.'  So,  also, 
would  be  a  promise  to  marry  on  the  part  of  the  man  or  the 
woman ;  *  a  promise  to  name  a  child  after  the  maker  of  the 
instrument  ;^  an  agreement  to  submit  a  dispute  to  arbitration 
and  to  abide  by  the  award  ;^  a  promise  to  support  the  maker 

1  Carsou  v.  Hill,  1  McMuU.  7G;  Hall  u.  Henderson,  84  111.  Gil. 

2  Waterhouse  v.  Kendall,  11  Cush.  128;  Cowell  v.  Cornell,  75  N.  Y. 
91;  Walker  u.  Walkpr,  29  N.  Y.  375;  Austell  v.  Rice,  5  Ga.  472;  Legal 
instruction,  Knowl^  v.  Parker,  7  Met.  30,  Easton  v.  Easton,  112  Mass. 
438;  the  location  oT  construction  of  a  railroad,  along  a  certain  line, 
First  Nat.  Bank  v.  Hendrie,  49  Iowa,  402;  Rose  v.  San  Antonio  R.  R.  Co., 
31  Tex.  49;  Wright  v.  Irwin,  35  Mich.  347;  the  location  of  a  public 
school,  Weisuer  f.  McBride,  49  Iowa,  220;  the  emancipation  of  a  slave, 
Thompson  v.  Thompson,  4  B.  Mon.  502;  the  communication  of  valuable 
information,  Chandler  v.  Mason,  2  Vt.  193;  Lucas  v.  Pico,  55  Cal.  126; 
the  resignation  of  an  office,  Peck  v.  Requa,  13  Gray,  407;  the  sales  of 
goods  by  a  factor  or  commission,  Eastman  v.  Brown,  32  111.  53;  Burrill 
V.  Parsons,  71  Me.  282;  Barcus  v.  Elliott,  95  Ind.  GGl. 

3  Meadow  v.  Bird,  22  Ga.  24G;  Thompson  v.  Wharton,  7  Bush,  563; 
McGill  V.  Burnet,  7  J.  .7.  Marsh.  640.    See  Norman  v.  Cole,  3  Esp.  253. 

*  Banfleld  w.   Rumsey,  2  Hun,  112;  Wright  v.  Wright,  54  N.  Y.  437; 
Verplank  V.  Sterry,  12  Jolins.  536. 
^  Wolford  V.  Powers,  85  Ind.  294. 

8  Rumsey  v.  Leek,  5  Wend.  20.  In  this  case  the  note  was  notenforcedr 
2^8 


CH.  X.]  THE    CONSIDERATION.  §    1'3 

or  his  wife:  ^  and,  so,  likewise,  has  a  note  been  held  to  be 
supported  by  a  sufficient  consideration,  which  was  given  by 
an  employer  to  the  employee,  payable  at  the  death  of  the 
former,  in  consideration  of  a  moral  obligation  for  services 
render  ed.- 

In  all  such  cases,  the  services  were  more  or  less  val- 
uable to  the  promisor,  and  the  performance  of  them  con- 
stituted a  detriment  to  the  promisee.  But  it  is  difficult 
to  see  how  the  promise  to  abstain  from  the  use  of  intoxicat- 
ing liquor,  or  from  indulgence  in  any  vice,  can  be  a  suffic- 
ient consideration  for  a  commercial  instrument.  There  is 
in  the  transaction  nothing  but  benefit  to  the  promisee.  The 
promisor  gets  no  benefit,  except  the  spiritual  satisfaction 
of  having  done  srood  to  his  neiorhbor,  which  is  no  consider- 
ation  in  law;  and  the  promisee  suffers  no  detriment,  unless 
the  ungratified  cravings  of  his  nature  be  called  a  detriment. 
But  it  has  been  held  that  such  a  promise  is  a  sufficient  con- 
sideration.^ 

On  the  other  hand,  it  is  difficult  to  see,  why  the  promise 
of  a  lot  owner  to  build  a  hotel  on  the  lot  is  not  a  sufficient 
consideration  for  a  note  given  by  an  inhabitant  of  the  town.* 
But  whatever  the  service  may  be,  it  cannot  be  a  considera- 
tion for  an  instrument  executed  after  th'e  rendition  of  the 
services,  and  not  in  pursuance  of  any  contemporaneous 
agreement  for  compensation.  Services  gratuitously  ren- 
dered, will  never  support  a  subsequent  promise  to  pay  for 
them.^ 


because  the  promise  to  submit  to  arbitration  was  made  by  a  married 
woman,  and  hence  not  binding  upon  her. 

'  Day  V.  Cutler,  22  Conn.  625.  But  see  Cross  v.  Brown,  51  N.  H.  486, 
where  it  was  held  that  a  promise  to  support  was  not  a  valid  considera- 
tion for  an  indorsement  as  against  the  otlier  creditors  of  the  indorser. 

2  Barthe  v.  Succession  of  LaCroix,  29  La.  Ann.  326. 

s  Lindell  v.  Ropes,  60  Mo.  249. 

*  Hogan  V  Crawford,  31  Tex.  633. 

5  Roberts  v.  Frisbie,  38  Tex.  219;  Hulse  w.Hulse,  17  C.  B.  711;  White 

19  289 


§     174  THE    CONSIDERATION'.  [CH.  X. 

It  hiis  iilso  been  held  that  an  executory  contract,  the 
performance  of  "which  has  been  postponed  to  the  future, 
is  a  conditional  consideration,  and  therefore  insuflScient.^ 
But  this  rule  cannot  be  accepted,  if  at  all,  without  serious 
qualifications. 

§  174.   Release  of   legal  liabilities — Compromises. — 

Another  common  consideration  is  the  release  of  legal  liabil- 
ities of  all  sorts:  the  liability  for  torts,  such  as  assault  and 
battery;  ^  for  breaches  of  warranty;  ^  the  liability  to  crim- 
inal proceedings  for  the  offense  of  bastardy,  and  the  sup- 
port of  the  bastard  child.*  A  note  given  to  satisfy  claims 
under  the  bastardy  laws  is  not  affected  by  the  subsequent 
death  of  the  child,  unless  the  note  was  given  merely  for  the 
support  of  the  child ;  ^  nor  would  there  be  any  failure  of 
consideration,  if  the  town  should  afterwards  require  bonds 
of  the  father  for  the  support  of  the  child. ^ 

A  note  was  held  to  be  invalid  which  was  given  for  the 
tort  of  a  third  person,^  if  there  was  no  other  consideration; 
although  it  would  seem  that  the  release  to  the  third  person 
of  his  liability,  being  a  detriment  to  the  promisee,  would 

V.  Hoylinau,  M  Pa.  St.  142.  But  the  promise  to  pay  for  the  services 
may  be  implied  from  the  relation  of  the  parties.  Miller  v.  Mackenzie,  95 
N.  Y.  575. 

1  Drury  v.  Macaulay,  16  M.  &  W.  146. 

2  Walbridge  v.  Arnold,  21  Conn.  425;  Whitenaclc  r.  Ten  Eyck,  2  Green 
Cb.  249. 

3  Lyons  v.  Stephens,  45  Ga.  141;  Byington  v.  Simpson,  134  Mass.  145. 

*  Hays  V.  McFarlan,  32  Ga.  699;  Jackson  v.  Finney,  33  Ga.  512;  Tay- 
lor V.  Dansby,  42  Mich.  82;  Haven  v.  Hobbs,  1  Vt.  238;  Robinson  v. 
Crensliaw,  2  Stew.  &  P.  176;  Merrittv.  Fleming,  42  Ala.  234;  Burgen  v. 
Straugliam,  7  J.  J.  Marsh.  583;  Bunn  v.  Winthrop,  1  .Johns.  329;  Hawk  v. 
Pratt,  78  N.  Y.  371;  Hicks  v.  Gregory,  8  C  B.  378;  .Jennings  v.  Brown, 
9  M.  &  W.  496;   Hook  v.  Haskin,  14  Hun,  398. 

5  Maxwell  v.  Campbell,  8  Ohio  St.  265;  Merritt  v.  Fleming,  42  Ala. 
234;  Hartcr  v.  Johnson,  16  Ind.  271;  Eaton  v.  Burns,  31  Ind.  390. 
•  «  Knight  ^•.  Priest,  2  Vt.  507;  Maxwell  v.  Campbell,  8  Ohio  St.  265. 
'  Coumey  v.  McFarlane,  97  Pa.  St.  361. 
290 


CH.  X.]  THE   CONSIDERATION.  §    174 

be  a  sufficient  consideration.  On  the  other  hand,  it  has 
been  held  that  the  discontinuance  of  bastardy  proceedings 
would  be  a  sufficient  consideration  for  a  note  to  the  father 
of  the  girl.^ 

But  the  liability  must  be  a  legal  one,  in  order  that  its 
release  may  constitute  a  sufficient  consideration.  Since 
seduction,  except  under  a  promise  of  marriage,  does  not 
create  any  legal  liability,  at  least  independently  of  statute, 
a  note  given  to  the  girl  oh  account  of  it  is  void  for  the  want 
of  a  consideration. 2  The  release  of  the  liability  for  breach 
of  the  promise  to  marry  is  a  sufficient  consideration.^  And 
so  also  would  be  the  release  of  legal  rights  issuing  out  of 
contracts  of  all  kinds.*  For  equally  good  reasons,  the  dis- 
continuance of  legal  proceedings  is  a  valid  consideration  for 
a  commercial  instrument.^ 

So,  also,  where  there  are  disputed  claims,  and  the  con- 
tending parties,  for  the  purpose  of  avoiding  the  burden 
and  annoyance  of  litigation,  agree  upon  a  compromise  of 
their  claims,  this  compromise,  involving,  as  it  does,  the  re- 
lease of  rights  that  were  at  least  claimed,  has  been  held  to 
be  an  all-sufficient  consideration    in   a    variety  of  cases.® 

1  Cutter  V.  Collins,  12  Cusli.  223;  but  not  for  a  note  to  a  public  officer, 
unless  it  was  given  with  her  consent.  Wheelwright  v.  Sylvester,  4 
Allen,  59. 

2  Heaps  V.  Durham,  95  111.  583. 

s  Prescott  v.  Ward,  10  Allen,  203. 

*  Crans  v.  Hunter,  28  N.  Y.  389;  Friermood  v.  Rouser,  17  Ind.  461: 
Lea  V.  Cassen,  61  Ala.  312;  Sternbergh  v.  Provoost,  13  Barb.  365; 
McClees  v.  Burt,  5  Met.  198. 

5  Seaman  v.  Seaman,  12  Wend.  381;  Hackett  v.  Pickering,  5  N.  H.  19; 
Boyd  V.  Cummings,  17  N.  Y.  101;  Waterman  v.  Barratt,  4  Harr.  311; 
Shepherd  v.  Watrous,  3  Caines,  166.  But  the  withdrawal  of  a  caveat  filed 
to  an  application  for  a  public  road,  since  the  proceedings  are  of  a  public 
character,  is  not  a  sufficientjconsideration.  Smith  v.  Applegate,  3  Zab. 
352. 

6  Cook  V.  Wright,  30  L.  J.  Q.  B.  321;  s.  c.  1  B.  &  S.  559;  Loughridge 
V.  Donille,  5  B.  &  Aid.  117;  Callisher  v.  Bischoffsheim,  L.  R.  5  Q.  B.  449; 
Anstell  r.  Rice,  5  Ga.  472;  Foster  v  Metts,  55  Miss.  77;  Boone  v.  Boone, 

291 


§    175  THE    CONSIDERATION.  [CH.  X. 

And  it  will  not  aflect  the  value  of  the  compromise,  as  a 
consideration,  if  the  disputed  claim  turns  out  to  be  without 
any  foundation,  as  long  as  both  the  parties  acted  in  good 
faith  in  making  the  compromise.^  But  if  one  of  the  par- 
ties was  not  actinof  in  irood  faith,  and  was  making  claims 
which  he  knew  were  unfounded  and  illegal,  the  com})romise 
of  such  a  dispute  would  fail  to  support  a  commercial  in- 
strument given  in  its  settlement.^ 

§  17.5.   Forbearance  and  extension  of  time  of  paj'uient. 

Another  common  kind  of  consideration  for  the  support  of 
commercial  paper,  and  of  obligations  issuing  out  of  such 
paper,  is  the  forbearance  and  extension  of  the  time  of  pay- 
ment.^ Whether  an  agreement  to  forbear  for  an  indefinite 
period,  as  "  for  a  reasonable  time,"  is  a  sufficient  considera- 
tion, has  been  differently  decided  by  the  courts,  although 
the  weight  of  authority  is  in  favor  of  its  being  sufficient.* 

58  Miss.  822;  Stephens  v.  Spiers,  25  Mo.  386;  Zane  v.  Zaue,  6  Munf.  406; 
Richardson  v.  Comstock,  21  Ark.  68. 

»  Russell  V.  Clark,  3  Hill,  504;  Taylor  U.Patrick,  1  Bibb,  168;  Keefe  y. 
Vogel,  36  Iowa,  87.  See  Northern,  etc.,  Market  Co.  v.  Kelly,  113  U.  S. 
(1884 J  199,  where  the  disputed  question  was  whether  a  corporation 
could  give  a  lease  of  its  property. 

2  Ormsbee  v.  Howe,  34  Vt.  182;  Owsley  v.  Philips,  78  Ky.  516;  Gun- 
ning r.  Royal,  59  Miss.  45;  Dickinson  v.  Lewis,  34  Ala.  638;  Briscoe  v. 
Kinealy,  8  Mo.  App.  26;  Sullivan  v.  Collins,  18  Iowa,  228;  Tucker  v. 
Rouk,  43  Iowa,  80. 

3  National  Bank  r.  Place,  86  N.  Y.  444;  King  v.  Upton,  4  Me.  387; 
Robinson  v.  Gould,  11  Cush.  55;  Baker  v.  Baker,  14  M.  &  W.  465; 
Wheeler  v.  Slocumb,  16  Pick.  52;  Brainard  v.  Harris,  14  Ohio,  107;  AVil- 
cox?;.  Howland,  23  Pick.  167;  Gatzmer  v.  Pierce,  13  Phila.  88;  Muirhead 
V.  Kirkpatrick,  21  Pa.  St.  237;  Callahan  v.  Bancroft,  28  Hun,  584;  Meltzer 
V.  Doll,  91  111.  365;  Atherton  v.  Marcy,  59  Iowa,  650;  Foster  v.  Wise,  27 
La.  Ann.  538 ;  Fuller  v.  Scott,  8  Kan.  25.  But  see  Shealy  v.  Toole,  56  Ga. 
210,  in  which  it  was  held  that  forbearance  is  not  a  sufficient  considera- 
tion for  an  agreement  to  pay  an  increasedrate  of  interest.  See  also,  in 
reference  to  an  agreement  for  compound  interest,  Glasscock  v.  Glass- 
cock, 66  Mo.  627. 

*  Lonsdale  v.  Brown,  4  Wash.  C.  C.  148;  McCelvy  v.  Noble,  13  Rich. 

292 


CH.  X.]  THE    CONSIDERATION  §     175 

But  iu  order  to  be  a  sufficient  consideration,  there  must  be 
an  agreement  to  forbear;  mere  forbearance,  without  the  ob- 
ligation to  forbear,  is  not  sufficient.^ 

On  the  other  hand,  the  agreement  to  forbear  must  in  its 
turn  be  supported  by  an  ample  consideration  ;  otherwise, 
it  is  not  binding  upon  the  creditor. ^  What  is  a  sufficient 
consideration  for  such  an  extension  of  time  is  not  very 
difficult  to  answer.  It  seems  that  almost  any  consideration 
that  would  be  sufficient  for  any  other  contract  will  suffice 
here.  An  agreement  for  an  increased  rate  of  interest^  or 
the  payment  of  interest  in  advance,*  the  payment  of  another 
debt  not  yet  due,^  the  giving  of  increased  security,®  have  all 
been  considered  sufficient  to  support  the  agreement  to  ex- 
tend the  time  of  payment.  And  it  has  been  held  to  be  a 
sufficient  consideration  for  the  aOTeement  to  forbear  suinsf 
on  the  balance  of  a  note,  when  a  part  of  it  was  paid 
after  maturity.^  But  this  can  not  be  considered  a  sound 
opinion. 

The  agreement  of  an  indorser  to  continue  his  liability  on 
the  note  would  be  a  sufficient  consideration  for  an  agree- 
ment to  forbear.^ 


33,0.  Contra,  Atlantic  Nat.  Bank  v.  Franklin,  55  N.  Y.  235.  But  see 
Glasscock  v.  Glasscock,  66  Mo.  627,  in  which  it  was  held  that  an  indefinite 
forbearance  was  insufficient  as  a  consideration  for  an  agreement  to  pay 
compound  interest. 

1  Manter».  Churchill,  127  Mass.  31. 

2  Roberts  v.  Richardson,  39  Iowa,  290;  Costello  v.  Wilhelm,  13  Kan, 
229;  Dilton  v.  Russell,  5  Neb.  484. 

^  Royal  V.  Lindsay,  15  Kans.  591;  Kittle  v.  Wilson,  7  Neb.  76. 

*  Lime  Rock  Bank  v.  Mullett,  34  Me.  547;  Maher  v.  Nanfrom,  86  111. 
513;  Stillwell  v.  Aaron,  69  Mo.  539;  St.  Joseph  Ins.  Co.  v.  Hauck,  71  Mo. 
405.  But  not  the  mere  payment  of  interest  already  due.  Stuber  v. 
Schack,83  111.  191. 

5  Rigsbee  v.  Bowler,  17  Ind.  167. 

6  Gates  V.  Hamilton,  12  Iowa,  50;  Kester  v.  Hulman,  65  Ind.  100. 

^  Turnbull  v.  Brock,  31  Ohio  St.  649.  But  see,  contra,  Pemberton  v. 
Hoosier,  1  Kan.  108. 

s  Third  Nat.  Bank  v.  Blake,  73  N.  Y.  260. 

293 


§     178  THE    COXSIDKKATIOX.  [cil.  X. 

§  17().  ludeiunity  as  a  consideration.  —  It  is  the  prac- 
tice at  times  to  give  to  oue's  surety,  or  to  an  accommodation 
party,  a  note  promising  to  pay  the  sum  of  money,  for 
which  he  has  become  liable,  the  object  being  to  indemnify 
the  accommodation  party  against  any  loss  on  the  acommo- 
dation  paper.  The  indemnity  is  held  in  such  cases  to  be  a 
sufficient  consideration,^  although  it  would  seem  that,  inde- 
pendently of  any  express  agreement,  the  principal  was 
under  an  implied  obligation  to  indemnify  the  accommoda- 
tion party  in  consideration  of  his  accommodation.^ 

§  177.  Illegal  considerations. — Considerations  which 
violate  the  law  are  of  no  force,  and  a  contract  based  upon 
an  illegal  consideration  cannot  be  enforced  in  the  courts,  for 
the  same  and  greater  reasons  than  for  which  it  is  held  that 
the  contract  without  any  consideration  at  all  cannot  be  the 
subject  of  an  action.  Where  the  consideration  is  illegal, 
the  whole  contract  becomes  aif  ected.  There  is  not  only  the 
absence  of  a  sufficient  and  valid  consideration,  but  also  an 
affirmative  cause  of  objection  in  the  diffusive  taint  of  ille- 
gality.    For  this  reason 

§    178.      The  effect  of  illegality  on  bona  fide  holders, — 

is  held  by  the  authorities  to  be  different  from  that  of  the 
mere  insufficiency  of  considerations,  at  least  in  certain 
cases.  Where  the  consideration  is  declared  by  decisions  of 
the  courts  or  by  statutory  enactments  to  be  simply  void  on 
account  of  illegality,  it  does  not  affect  the  validity  of  the 
contract  any  more  than  the  mere  absence  of  a  consideration 
would  affect  it ;  and  the  ho7ia  fide  holder  of  a  commercial 

1  Hazeltine  v.  Guild,  11  N.  H.  390;  Mercer  v,  Lancaster,  5  Pa.  St.  160; 
Rowland  v.  Myer,  3  N.  Y.  290;  Howard  v.  Palmer,  64  Me.  86;  Rutledge 
V.  ToTvnsend,  38  Ala.  706. 

2  But  see,  coKtraBank  of  Mobile  y.  Hall,  6  Ala.  639;  Andrews  ».  McCoy, 
8  Ala.  920. 

294 


CH.  X.]  THE    CONSIDERATION.  §     178 

instrument  avouIcI  nevertheless  be  able  to  maintain  his  action 
upon  it.^  But  where  the  statute,  making  the  consideration 
illegal,  declares  a  contract  founded  on  such  a  consideration 
to  be  absolutely  void,  the  language  of  the  statute  must  be 
given  its  proper  effect,  and  so  the  courts  have  held  that  the 
commercial  paper  founded  on  such  considerations  is  void 
even  in  the  hands  of  bona  fide  holders.^     It  seems  also  to 

1  Town  of  Eagle  v.  Kohn,  84  111.  292;  Grimes  v.  Hillenbrand,  11  N.  Y, 
S.  C.  (4  Hun)  354;  Smith  d.  Columbia  State  Bank,  9  Neb.  34;  (no«e /or 
location  of  county  seat)  Thorne  v.  Yentz,  4  Cal.  321;  {compounding  crime) 
Clark  V.  Ricker,  14  N.  H,  44;  Gorham  v.  Keyes,  137  Mass.  583;  {in  fraud 
of  creditors)  Gordor  v.  Clapp,  113  Mass.  335;  Fay  v.  Fay,  121  Mass.  501; 
Powell  V.  Inman,  7  Jones,  28;  Hamilton  v.  Scull,  25  Mo.  165;  Fenton  v- 
Ham,  35  Mo.  409;  loagers,  Day  v.  Stuart,  G  Bing.  109;  Cuthbert  v.  Haley, 
8  T.  R.  390 ;  Davison  v.  Franklin,  1  B.  &  Ad.  142 ;  Greenland  v.  Dyer,  2  M.  & 
Ry.  422;  George  v.  Stanley,  4  Taunt.  683;  Boultou  v.  Coglan,  1  Bing.  X. 
C.  640;  Atwood  V.  Weeden,  12  R.  I.  293;  usxiry,  Jones  v.  Davison,  Holt 
256 ;  Digrallu.  Wigley,  11  East,  43;  usurious  discount,  Rockwell  v.  Charles, 
2  Hill,  499;  Holmes  v.  "Williams,  10  Paige,  326;  violations  of  liquor  laioSf 
Paton  V.  Coit,  5  Mich,  505;  Doolittle  v.  Lyman,  44  N.  H.  608;  Cottle  v 
Cleaves,  70  Me.  256;  Converse  v.  Foster,  32  Vt,  828.  In  England  and 
Massachusetts,  it  is^now  provided  by  statute,  that  notes  and  bills,  founded 
on  a  consideration  declared  void  by  statute,  are  nevertheless  good  in  the- 
hands  of  bona  fide  holders.  5  &  6  Wm.  IV.  ch.,  41;  8  &a  Vick.,  ch.  109; 
Fitch  V.  Jones,  5  El.  &  Bl.  238 ;  Parsons  v.  Alexander,  5  El.  &  Bl.  263 ;  Hay 
V.  Ayling,  16  Q.  B.  423;  Goldsmith  v.  Hampton,  5  C.  B.  (n.  s.  )94;  Mass^ 
Rev.  Stat.  35,  §  2;  Kendall  v.  Robertson,  12  Cush.  156. 

2  In  Vallet  v.  Parker,  Savage,  C.  J.,  said:  " "Wherever  the  statutes 
declare  notes  void,  they  are  and  must  be  so  in  the  hands  of  every  holder ; 
but  where  they  are  adjudged  by  the  Court  to  be  so,  for  failure  of,  or  the 
illegality  of  the  consideration,  they  are  void  only  in  the  hands  of  the 
original  parties,  or  those  who  are  chargeable  with,  or  have  had  notice 
of,  the  consideration."  Glen  v.  Farmers'  Bank,  70  N.  C.  191;  "Woods  v. 
Armstrong,  54  Ala.  150;  Hatch  v.  Burroughs,  1  Woods,  439;  Smith  v. 
Columbus  N.  B.,  9  Neb.  34;  Bacon  v.  Lee,  4  Clark  (Iowa),  49;  Town  of 
Eagle  V.  Kohn,  84  111.  292;  Bayley  v.  Taber,  5  Mass.  286;  Ramsdell  w. 
Morgan,  16  Wend.  574;  Aurora  v.  West,  22  Ind.  88;  Taylor  u.  Beck,  3 
Rand.  316;  "Weed  v.  Bond,  21  Ga.  195;  the  statute  of  Anne  on  wagers, 
Robinson  v.  Bland,  2  Burr.  1077;  Young  v.  Moore,  1  Willes,  67;  McKin- 
well  V.  Robinson,  3  M.  &  "W.  434;  lottery  tickets,  Thompson  v.  Milligan,  2 
Cranch  C.  C.  207;  Hawkins  v.  Cos,  2  Cranch  C.  C.  173;  Hunt  v.  Knicker- 
bocker, 5  Johns.  .327;  gambling,  Edwards  n.  Dick,  4  B.  &  Aid.  212;  O'Kcefe 

295 


§     ITS  THK    COXSIDERATION.  [CH.  X. 

be  a  gcuenil  rule  of  law,  that  all  contracts,  based  on  a  con- 
sideration which  is  prohibited  by  law  under  a  penalty,  are 
void.  This  rule  has  been  applied  to  commercial  paper  and 
enforced  against  an  innocent  indorsee.^  "Where  the  statute 
provided  that,  for  taking  usurious  interest,  treble  the 
amount  of  interest  shall  be  forfeited  by  the  plaintiff  in  an 
action  on  the  paper,  it  was  held  that  the  statute  applied  to 
an  innocent  indorsee,  who  had  taken  the  paper  in  due 
course  of  trade. '-^  Where  the  illegality  of  the  considera- 
tion docs  not  constitute  a  defense  against  a  bona  fide 
holder,  the  burden  of  proof  will  always  be  on  the  plaintiff 
to  show  that  he  has  taken  the  paper  in  good  faith  and  for 
value.  ^ 


V.  Dunn,  6  Taunt.  315;  stock  gambling,  Barnard  v.  Backhaus,  52  Wis.  593; 
usurtj  (statute  of  Anne),  Lowe  v.  Waller,  Dougl.  736;  Chapman  v.  Black, 

2  B.  &Alcl.  590;  Henderson  v.  Benson,  8  Price,  288;  Wilkie  v.  Roosevelt, 

3  Johns.  Cas.  GG. 

1  Woods  V.  Armstrong,  54  Ala.  150;  Griffiths  v.  Wells,  3  Denio,  22G;  1 
Parsons,  213. 

2  In  Kendal  i;.  Robertson,  12  Cush.  156,  Shaw,  C.  J.,  said:  "The 
former  law  extended  the  entii'e  forfeiture  to  any  holder  of  the  note,  though 
an  iunocer^Jt  indorsee ;  the  natural  conclusion  is,  in  the  absence  of  express 
n"ords  changing  the  operation  of  the  law,  that  it  was  the  intention  of  the 
legislature  to  extend  such  partial  forfeiture  in  like  manner,  and  attach  it 
ds  before  to  the  note,  although  held  by  an  innocent  indorsee  Tvithout  no- 
tice. In  both  cases  the  intention  of  the  legislature  appears  to  have  been 
the  same,  to  suppress  a  mode  of  lending  regarded  as  dangerous  and  in- 
jurious to  society,  by  attainting  the  contract,  and  attaching  the  penal  con- 
sequences to  the  contract  itself,  whenever  set  up  as  a  proof  of  debt." 
See  Wortendyke  v.  Mechan,  9  Neb.  221;  Savings  Bank  t».  Scott,  10  Neb. 
33, 

3  Sistermans^j.Field,  OGray,  331;  Paton  v.  Coit,  5  Mich.  505;  Worteu- 
Jyke  V.  Mechan,  9  Neb.  221;  Savings  Bank  v.  Scott,  10  Neb.  83.  See 
Commissioners  V.  Clark,  94  U.  S.  285;  Collins  t?.  Gilbert,  94  U.  S.  761; 
Kellogg  V.  Curtis,  69  Me.  212;  Duerson  v.  Alsop,  27  Gratt.  249;  Sperry  v. 
Spaulding,  45  Cal.  544;  Sloan  v.  Union  Baukiug  Co.,  67  Pa.  St.  470; 
McClintick  v.  Cummins,  2  McLean,  98;  Johnson  v.  McMurry,  72  Mo.  282; 
Woodhill  V.  Holmes,  10  Johns.  231;  Fitch  v.  Jones,  32  Eng.  L.  &  Eq.  134; 
Smith  V.  Braine,  3  Eug.  L.  &  Eq.  380;  s.  c.  IG  Q  .  B.  244.  See  also  post, 
§303. 

296 


CH.  X.]  THE    CONSIDERATION.  §     179 

§  179.  Partial  illegality  of  consideration. —  As  a  gen- 
eral proposition,  it  may  be  safely  said  that  where  part  of 
the  consideration  is  illegal,  the  entire  commercial  instru- 
ment is  void.  It  is  not  considered  to  be  consistent  with 
public  policy  for  the  courts  to  undertake  the  apportionment 
of  the  contract  between  the  legal  and  the  illegal  considera- 
tion, and  the  avoidance  of  the  whole  contract  is  but  a  mer- 
ited penalty  for  engaging  in  questionable  proceedings.^ 
If  the  instrument  of  indebtedness  is  founded  upon  two  or 
more  distinct  and  severable  considerations,  one  of  which  is 
illegal,  although  there  are  authorities  to  the  contrary, ^  the 
better  opinion  is,  that  no  action  can  be  maintained  on  the 
instrument  for  the  recovery  of  the  legal  part ;  but  since  the 
parts  of  the  consideration  are  separate  and  distinct,  the 
illegality  of  one  part  cannot  affect  the  right  of  action  on 
the  legal  part,  which  exists  independently  of  the  instrument 
of  indebtedness.^ 


1  Kobinson  V.  Bland,  2  Burr.  1077;  Scott  v.  Gilmore,  3  Taunt,  226; 
Chapman  v.  Black,  2  B.  &  Aid.  588;  Cruikshanks  v.  Rose,  5  C.  &  P.  19; 
Owens  V.  Porter,  4  C.  &  P.  367;  Craig  v.  Andrews,  7  Iowa,  17;  Taylor  v. 
Pickett,  52  Iowa,  467;  Quigley  v.  Duffey,  52  Iowa,  610;  Perkins  v.  Cum- 
mings,  2  Gray,  258;  Brigham  v.  Potter,  14  Gray,  522;  Hoyt  v.  Macon,  2 
Col.  502;  Carlton  V.  Woods,  28  N.  H.  292;  Cobnru  v.  Odell,  20  N.  H.  540; 
Barnard  v.  Backhaus,  52  "Wis.  593;  Gardner  v.  Masey,  9.  B.  Mon.  90, 
Hyudes  v.  Hays,  25  B.  Mon.  31;  Deering  v.  Chapman,  22  Me.  488;  Aver- 
beck  V.  Hall,  14  Bush,  505;  Saratoga  Bank  v.  King,  44  N.  Y.  87;  Wood- 
n;fft".  Hinman,  11  Vt.  592;  Gamble  v.  Grimes,  2  Ind.  392;  Everhart  v. 
Packett,  73  Ind.  409;  Snyder  v.  Willey,  33  Mich.  483;  Wisuer  v.  Bard- 
well,  38  Mich.  278;  Wynne  w.Whisenaut,  37  Ala.  46;  Covington  u.  Thread- 
gill,  88  N.  C.  186;  Widoe  v.  Webb,  20  Ohio  St.  431 ;  Wilkins  v.  Riley,  47 
Miss.  306;  Gotten  v.  McKenzie,  57  Miss.  418;  Hyslop  v.  Clarke,  14  Johns- 
465;  Clarke.  Ricker,  14  N.  H.  44;  Chandler  v.  Johnson,  39  Ga.  85;  Kid- 
der V.  Blake,  45  N.  H.  530. 

2  Clopton  V.  Elkin,  46  Miss.  95.     See  Guild  v.  Belcher,  119  Mass.  257;  . 
McGuinness  v.  Bligh,  11  R,  I.  94;  Bron  v.  Becnel,  20  La.  Ann.  254;  s.  c. 
22  La.  Ann.   189. 

3  In  Widoe  v.  Webb,  21  Ohio  St.  431,  the  action  was  on  a  note,  given 
in  settlement  of  an  account,  of  which  some  of  the  items  wei-e  for  intoxi- 
cating liquors  sold  in  violation  of  the  law.     Scott,  C.  J. :  "  With  respect 

297 


§     179  THE    COXSIDERATION.  [CH.   X. 

It  has  been  held  that  where  the  leiral  part  of  the  consid- 
eration exceeds  in  amount  the  entire  instrument  of  indebt- 
edness, the  illeirality  of  another  part  of  the  consideration 
will  not  annihilate  the  instrument.^  And  if  there  are  sev- 
eral, fjiven  in  the  same  transaction,  or  at  the  same  time, 
and  each  of  them  exceeds  in  amount  the  illegal  con- 
sideration, the  holder  may  apply  the  defense  to  either  of 
the  instruments,  as  he  may  elect.-  It  would  be  difficult  to 
say  to  which  of  them  the  defense  should  apply,  when  both 
had  been  assigned,  so  that  they  are  held  by  different  parties. 
If  only  one  of  them  had  been  assigned,  it  follows,  as  a  con- 
sequence of  the  inequality  of  equity  between  the  origi- 
nal holder  and  a  subsequent  indorsee,  and  the  liability  as  a 
guarantor  of  an  indorser,  that  the  original  holder  should 
have  the  defense  prevail  against  him.  Whether  the  in- 
dorsee would  have  the  right  to  compel  such  a  disposition  of 
the  defense  so  that  the  obligor  may  be  prevented  from  set- 
ting up  the  defense  in  the  action  by  the  indorsee,  depends 
upon  the  question,  whether  the  acknowledged  right  of  the 
original  holder  to  make  the  election  passes  by  indorsement  of 

to  the  items  of  the  plaintiff's  accouut,  which  were  unconnected  with  the 
illegal  sales,  he  might  well  have  maintained  an  action  on  the  original 
contracts  of  sale,  even  after  the  giving  of  this  note.  For  being  utterly 
void  it  discharged  none  of  the  just  indebtedness  of  the  defendant.  But 
he  chose  to  sue  upon  the  note,  which  was  prima  facie,  evidence  of  in- 
debtedness to  the  extent  of  the  whole  sum  promised  to  be  paid,  and  thus 
attempted  to  throw  upon  defendant  the  burden  of  showing  how  much  of 
it  was  given  upon  an  illegal  consideration,  and  upon  the  court  the  task 
of  separating  the  sound  from  the  unsound.  If  this  effort  should  result 
in  his  losing  what  was  justly  due  him,  we  can  but  repeat  what  was  said 
in  a  similar  case:  "  It  is  but  a  reasonable  punishment  for  his  including 
with  his  just  due  that  which  he  had  no  right  to  take."  Robinson  v. 
Bland,  2  Burr.  1077;  Hanover  v.  Doane,  12  Wall.  342;  Perkins  v.  Cum- 
raings,  2  Gray,  2.";8;  Brighara  v.  Potter,  14  Gray,  522 ;  Clark  v.  Ricker,  14 
N.  H.  44;  Carlton  r.  Bailey,  27  N.  H.  234;  Carlton  v.  Woods,  28  N.  H. 
290;  Hart  v.  Macon,  2  Col.  508. 

1  Warren  v.  Chapman,  105  Mass.  87. 

-  Carradine  v.  Wilson,  01  Miss.  573. 
•2ft  S 


CH.  X.]  THE    CONSIDERATION.  §    180 

one  of  the  instruments  to  the  indorsee.  We  see  no  reason 
why  it  should  not.  But  where  both  instruments  have  been 
transferred  to  bona  fide  purchasers,  and  the  illegality  of  the 
consideration  avoids  the  instruments,  even  in  the  hands  of 
the  innocent  indorsee,^  the  equities  of  the  indorsee  being 
equal,  it  is  difficult  to  say  in  the  absence  of  adjudication,, 
what  would  be  the  ruling  principle. 

§  180.  Effect  of  a  renewal  on  illegal  consideration. — 

Where  the  consideration  of  an  instrument  is  illegal,  a  re- 
newal of  it,  or  the  substitution  of  a  new  instrument  for  the 
old  one,  does  not  cure  the  defect  arising  from  illegality  of 
consideration.  This  defense  is  as  good  against  the  renewal 
or  the  substituted  paper,  as  it  was  against  the  original.^ 
But  if  the  illegal  part  of  the  consideration  is  excluded  from 
the  renewal,  the  renewal  will  then  be  valid. ^  It  has  also 
been  held  that  where  a  bill  is  given  in  renewal  of  two  or 
more  other  bills,  one  of  which  was  founded  upon  an  illegal 
consideration,  the  illegality  of  the  consideration  of  one 
would  not  affect  the  validity  of  the  renewal  in  respect  to 
the  amount  of  the  original  bills  which  are  not  tainted  with 
this  illegality,'* 

But  where  a  contractual  liability,  based  upon  an  illegal 
consideration,  has  been  reduced  to  judgment,  on  account  of 
the  failure  of  the  defendant  to  set  it  up  in  defense,  the 
judgment  cannot  afterwards  be  set  aside  on  account  of  the 
illegality  of  the  consideration,  at  least  as  against  a  plaintiff, 
who  had  no  knowledge  of  its  illegality.^ 

1  See  a;ue,  §  178. 

2  Chapman  u.  Black,  2  B.  &  Aid.  588;  Preston  v.  Jackson,  2  Stark. 
237;  Southall  v.  Rigg,  11  C.  B.  481;  Flight  v.  Reed,  32  L.  J.  Exch.  2(35; 
1  Hurlst.  &  C.  703;  Wynne  v.  Collander,  1  Russ.  293. 

3  Boultouv.  Coghlan,  1  Bing.  N.  C.  640;  Hay  v.  Ayling,  20  L.  J.  Q.  B. 
171;  s.  c.  16Q.  B.  423. 

*  Doty  V.  Knox  Co.  Bank,  16  Ohio  St.  133. 

^  George  V.  Stanley,  4  Taunt.  683;  Davison  u,  Franklin,  1  B.  &  Ad. 
142;   Shepherd  v.  Chester,  4  T.  R.  275. 

21)9 


1^3  THE    CONSIDERATION.  [CH.  X. 

§  I'^l.  Equitable  relief  to  maker  on  account  of  illegal 
consideration.  —  When  ii  contract  is  tainted  by  beiuo' 
founded  upon  an  illegal  consideration,  both  parties  being 
necessarily  in  jJCt^'i  delicto,  the  law  leaves  them  severely 
alone.  The  courts  cannot  permit  any  action  upon  the  con- 
tract for  any  purpose.  Not  only  is  it  impossible  for  the 
obligee  of  such  a  contract  to  sue  upon  it,  but  it  is  also  im- 
possible for  the  obligor  to  recover,  for  the  purpose  of  de- 
stroj'ing  it,  the  written  instrument  of  indebtedness  which 
may  have  been  delivered  to  the  oblioee:  or  to  recover 
money  which  the  obligor  may  have  paid  out  on  the  debt. 
These  rulings  have  been  applied  to  commercial  paper,  which 
had  been  given  to  compound  a  felony.^ 

§  182.  What  are  illegal  considerations. — It  will  be 
impossible  to  enumerate  all  the  possible  considerations  that 
are  illegal.  And  hence  in  this  connection  it  will  suffice,  if 
the  more  common  kinds  of  illegal  considerations  are  men- 
tioned, accompanied  by  whatever  explanations  the  nature  of 
each  consideration  may  require.  In  the  first  place  illegal 
considerations  maybe  divided  into  those  which  violate  some 
rule  of  the  common  law,  and  those  which  are  prohibited  by 
some  statute. 

§   183.   Compounding  of  crimes  and  misdemeanors.  — 

Since  the  efficient  enforcement  of  the  criminal  law  is 
highly  essential  to  the  public  welfare,  any  commercial  in- 
strument o;iven  in  consideration  of  dismissinoj  a  criminal 
prosecution  is  illegal  and  void.  This  is  called  compound- 
ing of  crimes,  and  is  an  offense  of  the  most  serious  nature. 
Such  an  act  cannot  be  a  valid  consideration  for  commercial 
paper."     A  promise  not    to    institute  a   prosecution   is    as 

'  1  Atwood  V.  Fisk,  101  Mass.  363;  Haynes  v.  Rudd,  83  N.  Y.  251 ;  Dart- 
mouth i?.  Bennett,  15  Barb.  541. 

2  Edgecombe   v.    Rodd,    5  East,  2?4 ;  Galtou  v.    Taylor,  7  T.  R.  475; 

^300 


CH.  X.]  THE    CONSIDERATION.  §     183 

illegal  a  consideration  as  the  dismissal  of  a  prosecution 
already  instituted. ^  And  so,  also,  is  an  agreement  *'  to  use 
all  legal  and  proper  endeavor  ' '  to  have  a  prosecution  dis- 
missed.^ Compounding  the  inferior  misdemeanors  is  illegal 
as  well  as  compounding  felonies.^ 

But  where  the  agreement  is  to  suppress  proceedings  only 
criminal  in  form,  and  involving  no  criminal  offense,  it  is 
not  illegal.*  It  has  also  been  held  that  the  promise  to  dis- 
continue bastardy  proceedings,  a  quasi  criminal  process,  is 
a  good  legal  consideration  for  a  commercial  obligation.^ 
It  is  also  not  illegal  to  give  a  note  in  settlement  of  any  civil 
action  in  tort  for  damages.^ 

Brett  ?7.  Tomlinson,  16  East,  293;  Elworthy  v.  Bird,  2  Sim.  &  Stu.  372; 
Clubbu.  Hutson,  18  C.  B.  (n.  s.)  414;  Johnson  v.  Ogillry,  3  P.  Wms.  272; 
Harding  v.  Cooper,  1  Stark.  467;  Wallace  v.  Hardacre,  1  Campb.  45; 
Kirk  V.  Strickwood,  4  B.  &  Ad.  421;  Commonwealth  v.  Pease,  16  Mass. 
'.•1;  Clark  v.  Pomeroy,  4  Allen,  534;  Hinesborough  t?.  Sumner,  9  Vt.  23; 
Hinds  V,  Chamberlain,  6  N.  H.  225;  Clark  v.  Ricker,  14  N.  H.  44 ;  Farrar 
(•.  Davis,  53  Vt.  597;  Murphy  v.  Bottomer,  40  Mo.  67;  Sumner  u.  Sum- 
mers, 54  Mo.  340;  Breathwit  v.  Rogers,  32  Ark.  758;  Collier  v.  Waugh, 
64  Ind.  456;  Chandler  v.  Johnson,  39  Ga.  85;  Kimbrough  ?7.  Lane,  11 
Bush,  556;  Cain  v.  Southern  Express,  1  Baxt.  315;  Wynne  v.  Whise- 
uant,  37  Ala,  46;  Commonwealth  w.  Johnson,  3  Cush.  454;  Porter  v. 
Havens,  37  Barb.  343;  Steuben  Co.  Bank  v.  Matthewson,  5  Hill,  249; 
Vincent  z?.  Groom,  1  Yerg.  430;  Bell  v.  Wood,  1  Bay,  249;  Merrill  v. 
Carr,  60  N.  H.  114;  Doyle  w.  Carroll,  28  U.  C.  C.  P.  218;  Roll  v.  Raguet, 
4  Ohio,  400. 

1  Gardner  v.  Maxey,  9  B.  Mon.  90. 

2  Averbeck  v.  Hall,  14  Bush,  505;  RicJjets  v.  Harvey,  78  Ind.  152; 
Shenk  v.  Phelps,  6  Bradw.  612. 

^  Jones  V.  Rice,  16  Pick.  440. 

*  Soule  V.  Bonny,  37  Me.  128. 

'->  Hook  V.  Pratt,  78  N.  Y.  371;  Bunn  v.  Winthrop,  1  Johns.  Ch.  329; 
Knight «.  Priest,  2  Vt.  507;  Cutter  v.  Collins,  12  Cush.  233;  Hays  v. 
McFarlau,  32  Ga.  699;  Jackson  v.  Finney,  33  Ga.  512;  Meii-itt  v.  Flem- 
ing, 42  Ala.  284;  Maxwell  v.  Campbell,  8  Ohio  St.  265;  Haven  v.  Hobbs 
1  Vt  238;  Burger  v.  Strangham,  7  J.  J.  Marsh.  583;  Robinson  v.  Cren- 
shaw, 2  Stevr.  &  P.  176;  Hicks  y.  Gregory,  8  C.  B.  378;  Jennings  v. 
Brown,  9  M.  &  W.  496. 

6  Price  y.  Summers,  2  South.  578.  See  also  Drage  v.  Ibberson,  2 
Esp.  643;  Coppock  v.  Bower,  4   M.  &   W.  361;   Kneeshaw  u.  Colliei-,  oO 

301 


§     184  THE    CONSIDERATION.  [CH.  X. 

Of  the  same  character  as  the  compounding  of  crimes,  is 
the  prevention  of  a  conviction  by  the  suppression  of  evi- 
dence. Agreements  to  suppress  evidence  are  illegal,  and 
a  commercial  instrument,  given  in  consideration  of  such 
an  agreement  is  invalid. ^ 

It  is  illegal  to  agree  to  dismiss  a  prosecution  for  embez- 
zlement or  larceny,  even  when  the  amount  paid  or  promised 
is  the  same  as  that  which  had  been  taken.  The  private 
wrong,  involved  in  the  act  of  larceny  or  embezzlement,  is 
lost  sight  of  in  the  greater  wrong  against  the  public'  But 
where  the  money  is  promised  to  be  paid,  without  any  stip- 
ulations that  the  prosecution  was  to  be  dismissed,  and 
without  any  promise  of  clemency  of  any  kind,  the  agree- 
ment is  legal  and  binding,  notwithstanding  the  prosecution 
was  subsequently  dismissed.^ 

§  184.  Contracts  with  alien  enemies  and  in  aid  of 
rebellion. — As  has  been  already  explained  *  all  contracts 
with  alien  enemies  are  void,  and  it  follows,  as  a  matter  of 
course,  that  any  commercial  instrument  given  in  liquidation 
of  such  a  contract  would  be  founded  upon  an  illegal  consid- 
eration. 


U.  C.  C.  P.  265;  Walbridge  v.  Arnold,  21  Coun.  425;  Whitenack  v.  Ten 
Eyck,  2  Green  Ch.  249;  Prescott  v.  Ward,  10  Allen,  203;  Lyons  v. 
Stephens,  45  Ga.  141;  Jones  v.  Rittenhouse,  87Ind.  348. 

1  Nerot  V.  Wallace,  3T.  R.  17;  Fallows  v.  Taylor,  7  T.  R.  475;  Edge- 
combe u.  Rodd,  5  East,  294;  Swan  v.  Chandler,  8  B.  Mon.  97;  Gardner 
V.  Maxey,  9  B.  Mon.  90;  Hoyt  v.  Macon,  2  Col.  502. 

2  Taylor  v.  Jaques,  106  Mass.  291;  Hinesborough  v.  Sumner,  9  Vt.  23; 
Sumner  v.  Summers,  54  Mo.  340;  Godwin  v.  Crowell,  50  Ga.  566 ;  Buck  v. 
First  Nat.  Bank,  27  Mich.  292.  But  see,  contra,  Bibb  v.  Hitchcock,  49 
Ala.  468;  Crowder  v.  Reed,  80  Ind.  1.  It  has  also  been  held  that  a 
threatened  prosecution  is  a  sufficient  consideration  for  the  indorsement 
as  surety  by  a  third  person.    Jaffray  v.  Brown,  74  N.  Y.  393. 

3  Von  Windisch  v.  Klaus,  46  Conn.  433;  Cohoes  v.  Cropsy,  55  N.  Y. 
685;  Armstrong  v.  Southern  Express  Co.,  4  Baxt.  376. 

*  See  ante,  §  66. 
302 


CH.  X.]  THE    CONSIDERATION.  §     184 

For  the  same  reasons,  all  contracts  in  aid  of  a  rebellion 
against  the  government  are  illegal,  and  commercial  paper 
giv'en  in  settlement  of  such  contracts  are  void.  This  rule 
has  been  followed  in  a  number  of  casfes,  in  which  aid  had 
in  various  ways  been  given  to  the  Confederacy  of  the 
Southern  States  in  their  operations  against  the  government 
of  the  United  States.  Cpmmercial  paper  given  in  consid- 
eration of  that  aid  was  declared  to  be  void.^  But  the  fact 
that  a  note  was  given  by  a  Confederate  officer  for  a  horse, 
apparently  for  army  use,  but  not  avowedly  so,  does  not 
make  the  note  illegal. ^  And  it  has  also  been  held  to  be  no 
objection  to  the  validity  of  a  commercial  instrument,  that 
it  was  given  for  money  borrowed  for  the  equipment  of 
Confederate  troops,  even  though  the  payee  knew  this,  if 
the  borrower  was  not  restricted  by  the  contract  to  this  use 
of  the  money. ^  A  note  given  to  a  surety  of  such  an  illegal 
contract  for  money  paid  by  him  as  surety  has  been  held  to. 
be  legal;*  and  so,  also,,  a  note  or  bond  given  for  money 
borrowed  to  pay  such  an  illegal  debt,  particularly  after  the 
close  of  the  war.^  But  these  latter  cases  can  hardly  be 
considered  in  line  with  judicial  precedent  and  legal  prin- 
ciple. They  are  certainly  not  reliable  guides  in  other  cases 
of  illegal  considerations.  The  general  rule  is,  that  an 
illegal   consideration  taints   every  contract  into  which  it 

1  Hanauer  I?.  Doane,  12  Wall.  342;  Critcher  v.  Holloway,  64  N.  C.  526; 
Kingsbury  v.  Gooch,  64  N.  C.  528;  Kingsbury  u.  Fleming,  66  N.  C.  524; 
Martin  v.  McMillan,  63  N.  C.  486 ;  Tatura  v.  Kelly,  25  Ark.  209;  McMurtry 
1).  Ramsey,  25  Ark.  350;  Brooker  v.  Robbins,  26  Ark.  660;  Chancely  v. 
Bailey,  37  Ga.  532;  Pickens  u.  Eskridge,  42  Miss.  114;  Stewart  v.  Bosley, 
19  La.  Ann.  439;  Wright  v.  Stacey,  19  La.  Ann.  449;  Heidenreich  v.  Leon- 
ard, 21  La.  Ann.  628. 

2  Thedford  v.  McClintock,  47  Ala.  647. 

3  Walker  V.  Jeffries,  45  Miss.  160;  Gilliam  v.  Brown,  43  Miss.  641; 
Williams  v.  Williams,  79  N.  C.  411;  Puryear  v.  McGavock,  9  Heisk.  461; 
Bank  of  Tennessee  v.  Gumming,  9  Heisk.  465. 

*  Powell  V.  Smith,  66  N.  C.  401. 

5  Poindexter  v.  Davis,  67  N.  C.  112:  Murphy  v.  Weems,  69  Ga.  687. 

303 


§     li<5  THE    CO^'SIDEKATION.  [cil.   X. 

enters,  it  iiuittois  not   how  often  the  written  inslrunicnt  of 
indebtedness  may  be  substituted.^ 

§  185.  Confederate  currency. — In  consequence  of 
the  currenc}',  issued  by  the  Confederate  government,  hav- 
ing been  brought  into  circulation  by  payment  of  debts  con- 
tracted by  that  government,  it  has  been  held  by  some  of 
the  courts  that  all  commercial  paper,  given  for  a  loan  of 
this  currency,  was  founded  upon  an  illegal  consideration, 
and  was  therefore  void.^  So,  also,  were  notes  declared  to 
be  void,  which  had  been  given  for  the  purchase  of  lands 
and  personal  property,  which  according  to  the  contract  was 
to  have  been  paid  in  Confederate  currenc}^^  But  in  some 
of  the  other  courts,  a  different  view  has  prevailed.  Taking 
into  consideration  the  fact  that  no  other  kind  of  currency 
was  available  to  the  mercantile  circles  in  the  Southern 
States,  and  the  consequent  necessity  of  using  the  Confeder- 
ate currency  in  commercial  dealings,  they  have  held  that 
making  use  of  this  currency  as  a  medium  of  exchange, 
since    it  was   practically  .  compulsory,    did  not   constitute 


1  See  ante,  §  180. 

2  Ford  11.  Kaglaud,  25  Ark.  612:  George  v.  Terry,  26  Ark.  160;  Kiug  v. 
Caruall,  26  Ark.  36;  Scudder  v.  Thomas,  35  Ga.  364;  Calfee  v.  Burgess, 
3  W.  Va.  274;  Goodmau  v.  McGehee,  31  Tex.  252;  Willis  v.  Johusou,  38 
Tex.  .303;  Smith  v.  Smith,  30  Tex.  754;  McCartuey  v.  Greenway,  30  Tex. 
754;  Cundiff  V.  Herron,  33  Tex.  622;  Potts  v.  Gray,  3  Coldw.  468;  Hale  v. 
Hustou,  44  Ala,  134;  Tarleton  v.  Southern  Bank,  44  Ala.  229;  Askew  v. 
Torbert,  49  Ala.  101;  Peltz  v.  Long,  40  Mo.  532;  Bozeman,  v.  Allen,  48 
Ala.  512;  Bailey  v.  Miller,  35  Ga.  330;  Dlttman,  v.  Meyers,  39  Tex.  295; 
Norton  v.  Pickens,  21  La.  Ann.  575;  Durbin,  v.  McMichael,  22  La.  Ann. 
132;  Bauk  of  New  Orleans  v.  Frauton,  22  La.  Ann.  462;  Huck  v.  Haller, 

19  La.  Ann.  257;  Reeves  v.  Doughty,  19  La.  Ann.  164;  Pickens,  v.  Preston, 

20  La.  Ann.  138;  Senzeneau  r.  Saloy,  21  La.  Ann.  305;  Brossatv.  Sullivan, 

21  La.  Ann.  565  In  Louisiana,  by  a  provision  of  the  constitution,  .such 
paper  is  void  in  the  hands  of  a  bona  fide  holder  for  value.  Const.  La. 
1868,  art.  127;  Baldwin  v.  Sewell,  23  La.  Ann.  444. 

3  Revis  V.  Blackstone,  30 Tex.  753;  Peltz  o.  Long,  40  Mo.  532;  Brown 
V.  Wilie,  2  W.  Va.  502. 

304 


CH.  X.]  THE    COXSIDERATION.  §     186 

giving  aid  to  the  rebellion,  and  therefore  notes  and  other 
commercial  paper,  given  for  loans  of  Confederate  currency, 
or  for  a  payment  of  property  which  were  agreed  to  be  paid 
for  in  Confederate  currency,  were  not  illegal. ^  Where  the 
contract  simply  calls  for  the  payment  of  so  many  "dollars," 
it  is  presumed,  in  absence  of  proof  to  the  contrary,  that  the 
lawful  currency  of  the  United  States  was  intended ;  but  it 
may  be  shown  by  parol  evidence  that  Confederate  currency 
was  meant. 2  And  where  a  note  was  payable  in  "  current 
bankable  funds,"  it  was  held  that  the  parties  intended 
United  States  currency.^ 

§186.  Bribery.  —  All  forms  of  bribery  of  public 
officials  are  of  course  illegal,  and  commercial  instruments, 
given  for  the  purpose  of  influencing  any  one  in  the  per- 
formance of  a  public  duty,  are  .void  on  account  of  the  ille- 
gality of  the  consideration.  This  is  the  case,  whether  the 
paper  be  given  to  secure  a  public  office  by  influencing  one 
who  has  the  power  to  appoint  or  elect,*  or  to  secure  some 

1  Rivers  v.  Moss,  6  Bush,  600;  Rhodes  v.  Patillo,  6  Bush,  271;  "Wyattu, 
Evius.  52  Ala.  285;  Simpson  v.  Lauderdale  Co.,  56  Ala.  64;  McNath  w. 
Johnson,  41  Miss.  439;  Gist  v.  Gaus,  30  Ark,  285,  overruling  Latham  v. 
Clark,  25  Ark.  574;  Scott  u.  Davidson,  33  Tex.  807;  Bozeman  v.  Rushing, 
51  Ala.  529.  And  so,  also,  where  there  had  been  a  renewal  of  a  note 
given  for  the  loan  of  Confederate  currency.  McLaughlin's  6  Exr.  v. 
Beard,  5  W.  Va.  538;  Beard  v.  Livesay,  4  W.  Va.  687. 

=«  Diltz  V.  Sadler,  37  Tex.  137;  Donley  v.  Vindel,  32  Tex.  43. 

3  Taylor  v.  Turley,  33  Md.  500.  Since  Maryland  was  a  border  State, 
the  presumption  adopted  by  the  court  was  reasonable ;  but  the  same  pre- 
sumption would  not  have  been  tenable  farther  south,  where  the  only 
"  current  bankable  funds,"  with  the  exception  of  a  little  hoarded  gold, 
were  of  the  Confederate  currency. 

*  Parsons  v.  Thompson,  1  H.  Bl.  322;  Laying  v.  Paine,  Wills,  571; 
Balmer  v.  Bate,  2Brod.  &Bing.  673;  Harrington  v.  Kloprogge,  2  Brod.  & 
Bing.  678;  Blackford  v.  Preston,  8  T.  R.  93;  Stackpole  v.  Earle,  2  Wills. 
133;  Richardson  ;;.  Mellish,  2  Bing.  229;  s,  c.  9  Moore,  435;  Ferris  u. 
Adams,  23  Vt.  136;  Nichols  v.  Mudgett,  32  Vt.  546;  Martiu  v.  Wade,  37 
Cal.  168;  King  v.  Pitt,  1  W.  Bl.  380;  Allen  v.  Hearn,  1  T.  R.  56;  Lulston 

20  305 


§   187  THE  coxsidi:ration.  [en.  x. 

favor  of  the  officer,  or  to  influence  him  in  other  ways,  to 
the  benefit  of  the  promisor  or  of  a  third  person,  in  the  dis- 
charge of  his  official  duties.^  It  is  illegal  to  promise  extra 
compensation  to  a  public  officer  to  induce  extra  diligence 
in  the  performance  of  his  duties.^  But,  although  it  is  illegal 
to  promise  to  indemnify  an  officer  against  damage  from  his 
unlawful  acts,^  it  is  permissible  to  indemnify  an  officer 
a<2:ainst  loss  where  he  in  good  faith  does  what  he  thinks  he 
has  a  right  to  do,  but  about  which  he  miffht  be  mistaken. 
Bonds  of  indemnity  of  this  kind  are  very  common.* 

§  187.  Lobbying. — Although  "lobbying,"  when  done 
in   a    dignified    and     unobjectionable    manner,    unaccom- 

V.  Norton,  3  Burr.  1235;  Webb  v.  Smith,  4  Bing.  N.  C.  673;  Swayzew. 
Hullj  3  Halst.  54  J  Commissioners  of  Johnson  Co.  v.  Milliken,  7  Blackf. 
301.  Contracts  in  relation  to  the  procurement  of  ofHces  in  the  service  of 
a  private  corporation  are  considered  to  be  on  a  different  basis,  and  pub- 
lic policy  does  not  require  them  to  be  declared  illegal.  Peck  v.  Requa, 
13  Gray,  407.  But  it  has  been  held  that  an  administrator  of  another's 
estate  is  a  public  officer  in  this  sense,  and  a  note  given  for  procuring 
one's  appointment  as  administrator  is  void,  Porter  v.  Jones,  52  Mo.  399. 
Of  the  same  character  are  eommercial  obligations  given  to  induce  a  pub- 
lic officer  to  resign  and  exert  his  influence  in  favor  of  the  obligor's  ap- 
pointment to  the  office,  Meacham  v.  Do^v,  32  Vt.  721;  or  to  induce  one 
candidate  to  withdraw  in  favor  of  another,  Ham  v.  Smith,  87  Pa.  St.  G3. 
See  also  Gray  v.  Hook,  4  N.  Y.  449;  Martin  v.  Wade,  37  Cal.  168.  See 
Thetford  v.  Hubbard,  22  Vt.  440,  where  certain  offices  were  held  under 
the  Vermont  statute  to  be  salable. 

1  Bell  V.  Quin,  2  Sandf.  146;  Tool  Company  v.  Norris,  2  Wall.  45;  Al- 
ston V.  Atlay,  6  Nev.  &  M.  686;  Denny  v.  Lincoln,  5  Mass.  385;  Dealin  v. 
Brady,  36  N.  Y.  531;  Goodale  v.  Holdridge,  2  Johns.  193;  Wheeler  v. 
Bailey,  13  Johns.  366;  Bills  v.  Comstock,  12  Met  468;  Totteridge  v. 
Mackally,  Sir  Wm.  Jones,  341;  Rogers  r.  Reeves,  1  T.  R.  418;  Samuel  v. 
Evans,  2  T.  R.  569;  Watson  v.  Fletcher.  8  B.  &  C.  25;  Ashley  v.  Dillon, 
19  Mo.  619, 

'  Hatch  V.  Mann,  -15  Wend,  44. 

»  10  Co.  102;  Yelv.  197;  Cro.  Eliz.  199. 

*  Cro.  Jac.  652;  1  Ld.  Raym.  279.    But  an  indemnity  bond  cannot  be 
required  by  an  officer  where  the  performance  of  the  duty  is  obligatory. 
Dudley  v.  Butler,  10  N.  H.  281. 
30G 


(H.  X.]  THE    CONSIDERATIOK.  §    188 

paniedby  any  form  of  bribery,  is  not  illegal,  yet  since  there 
is  so  much  danger  of  the  lobbyist  using  improper  means 
to  influence  the  legislators,  the  services  of  a  lobbyist  are 
never  held  to    be    a    legal   consideration   for   commercial 

paper.  ^ 

§  188.  Wagers.  —  At  common  law,  wagers  were  not 
necessarily  illegal,  and  those  which  were  held  to  be  legal 
would  be  a  sufficient  consideration  for  a  commercial  instru- 
ment.- If  the  subject-matter  of  the  wager  was  harmless 
and  did  not  in  any  manner  offend  public  policy,  it  was 
.legal. ^  But  if  the  wager  has  reference  to  the  happening 
or  doin2  of  some  act  Avhich  is  illeo^al  or  ag-ainst  good  morals, 
the  wager  is  void  and  will  not  be  enforced.*     In  no  part  of 

1  Marshall  v.  Bait.  &  O.  E.  R.  Co.,  16  How,  314 ;  Triss  v.  Child,  21  Wall. 
441;  Harris  v.  Roof,  10  Barb.  489;  Rose  v.  Truax,  21  Barb.  301;  Clippia- 
ger  V.  Hepbaugh,  5  Watts  &  S.  315. 

2  1  Daniel's  Negot.  Inst.  196;  Randolph  Commercial  Paper,  §  510; 
Good  V.  Elliott,  3  T.  R.  693;  Da  Costa  v.  Jones,  Cowp.  734.  See  Tiede- 
mau's  Police  Power,  §  99. 

3  Thus  it  was  lawful  to  bet  that  A.  has  purchased  a  wagon  of  B., 
Good  V.  Elliott^  3  T.  R.  693;  or  to  bet  on  a  cricket  match  or  on  any  other 
lawful  Yp^'^.  Walpole  v.  Saunders,  16  E.  C.  L.  R.  276;  Crump  v.  Secrest, 
9  Tey  ^<tu;  McAlester  i;.  Hadeu,  2  Campb.  438.  See  also,  generally,  in 
support  of  this  doctrine,  Sherborne  t'.  Colebach,  2  Vent.  175;  Hussey  v. 
Crickell,  3  Campb.  168;  Grant  v.  Hamilton,  3  M.  L.  100;  Cousins  u. 
Mantes,  3  Taunt.  515;  Johnson  v.  Lousley,  12  C.  B.  468;  Dalby  u.  India 
Life  Ins.  Co.,  15  C.  B.  305;   Hampden  v.  Walsh,  L.  R.  12  P.  D.  192. 

*  Thus   wagers   are  void,    which  rest  upon   the  result  of  an  illegal 
game,  Brown    v.   Leeson,  2  H.  Bl.  43 ;  Hunt  v.  Bell,  7  J.  B.  Moore,  212 
Egerton  v.  Furzman,  Ry.  &  Mo.  213;  Squires  v.  Whisken,  3  Campb.  140 
which  involve  the  abstinence  frommarriage,  Huntley  v.  Rice,  10  East,  22 
which  refer  to  the  expected  birth  of  an  illegitimate  child,  Ditchburn  v. 
Goldsmith,   4   Campb.    152;  to  the  sex  of  a  person,  and  the  commission 
of  adultery,  Da   Costa   v.  Jones,  Cowp.  729;  wagers   on  the  result  of 
public  elections,  Beeley  v.  Wiugfield,  11  East,  46:  Rust  v.  Gott,  9   Cow, 
169;  Denny   v.    Elkins,   4   Cranch   C.  C.  101;  Brush  r.  Keeler,  5  Wend. 
250:  Pilkinton  v.  Green,  2  B.  &  P.  151;  Lockhart  v.  Hullinger,  2  Bradw. 
465;   Gordon  r.   Casey,    23    111,    70;   Guyman  r.  Burlinganie,  36  111.  20; 
Gregory   v.  King,    58  111.    169;  on  the   result  of   a  war,  Lacaussade  ». 

307 


§     188  THE    CONSIDERATION.  [CH.  X 

the  civilized  world  are  contracts  for  the  insurance  of  life 
or  property  against  accidental  destruction  held  to  be  in- 
valid. 

The  English  doctrine  is  clearly  sustained,  as  a  part  of 
the  common  law,  by  the  decision  of  some  of  the  American 
courts.^  But,  except  in  the  matter  of  insurance  contracts, 
all  wager  contracts  are  declared  to  be  invalid  in  Maine,  Mas- 
sachusetts, New  Hampshire,  Vermont  and  Pennsylvania.^ 
In  many  of  the  States  and  in  England,  the  common  law  is- 
changed  by  statutes  which  prohibit  all  wager  contracts.^ 
Inasmuch  as  insurance  contracts  serve  a  useful  purpose, 
they  are  excepted  from  the  operation  of  these  statutes, 
cither  expressly,  or  by  judicial  construction.  But  in  order 
that  they  may  be  valid  contracts,  insurance  policies  must 
be  taken  out  by  some  one  bearing  a  lawful  interest  in  the 
property   or   life   that  is  insured.     A  policy  taken  out  by 

White,  7  T.  R.  535;  Allen  v.  Hearne,  1  T.  R.  57;  or  of  a  criminal  pros- 
ecution, Evans  u.  Jones,  5  M.  &  "W.  77;  and  so,  likewise,  wagers  of  all 
kinds  which  have  an  injurious  effect  upon  the  feelings  or  interests  of  a 
third  person,  Da  Costa  v.  Jones,  Cowp.  729;  Eastbrooku.  Scott,  3  Ves. 
456 ;  Eltham  v.  Kingsham,  1  B.  &  Aid.  683 ;  Harvey  v.  Gibbons,  2  Lev. 
161;  Gilbert  v.  Sykes,  16  East,  150.  • 

1  Bunu  V.  Rikes,  4  Johns.  426;  Campbell  v.  Richardson,  10  Johns. 
406;  Dewces  v.  Miller,  5  Harr.  347;  Trenton  Ins.  Co.  v.  Johnson,  4  Zabr. 
576;  Dunman  v.  Strother,  I  Tex.  89;  Wlieeler  v.  Friend,  22  Tex.  683; 
Monroe  v.  Smelley,  25  Tex.  586;  Grantu.  Hamllon,  3  McLean,  100  (U.  S. 
C.  C);  Smith  u.  Smith,  21  111.  244;  Richardson  v.  Kelley,  85  111.  491; 
Petillon  V.  Hippie,  90  111.  420;  Carrier  v.  Brannan,  3  Cal.  328;  Johnson 
V.  Hall,  6  Cal.  359;  .Johnson  v.  Russell,  37  Cal.  670. 

2  See  Lewis  v.  Littlefleld,  15  Me.  233;  McDonough  v.  Webster,  68  Me. 
530;  Gilmore  V.  Woodcock,  69  Me.  118;  Babcock  v.  Thompson,  3  Pick. 
446;  Ball  V.  Gilbert,  12  Met.  399;  Sampson  v.  Shaw,  101  Mass.  150;  Per- 
kins V.  Eaton,  3  N.  H.  152;  Clark  v.  Gibson,  12  N.  H.  386;  Winchester  v. 
Nutter.  52  N.  H.  507;  Collamer  v.  Day,  2  Vt.  144;  Tarlton  v.  Baker, 
18  Vt.  9 ;  Phillips  v.  Ives,  1  Rawle,  36 ;  Brua's  Appeal,  55  Pa.  St. 
294. 

»  Such  statutes  are  to  be  in  Vermont,  New  York,  New  Jersey,  Ten- 
nessee, New  Hampshire,  Virginia,  West  Virginia,  Wisconsin,  Missouri, 
Illinois,  Ohio,  Iowa,  and  probably  in  other  States. 

308 


CH.  X.]  THE   CONSIDERATION.  §    189 

one  having  no  such  interest,  is  an  illegal  wager,  and  there- 
fore void.^ 

Like  every  other  illegal  transaction,  the  courts  will  have 
nothing  to  do  with  the  subject-matter  of  a  wager  contract, 
unless,  as  a  penalty,  the  statute  provides  for  an  action  to 
compel  a  return  of  the  money  won  and  paid  for  a  wao-er 
contract.  A  stakeholder  can  do  what  he  pleases  with  the 
stakes,  and  no  action  will  be  entertained  against  him.^  The 
only  person  who  can  maintain  an  action  for  the  stakes  or 
money  paid  on  a  bet,  is  the  creditor  of  the  person  who  paid 
it,  and  he  only,  when  his  debtor  is  insolvent.^ 

§  189.  Option    contracts,    when    illegal.*  —  For    many 

years,  in  all  parts  of  the  world,  a  species  of  commercial 
gambling  has  been  devised  and  developed,  and  which  is  still 
increasing  in  proportions.  Large  bodies  of  men  in  our 
commercial  centers  congregate  daily  in  the  exchanges  for 
the  purpose  of  betting  on  the  rise  and  fall  in  the  price  of 
stocks,  cotton  and  produce  of  all  kinds,  and  lately,  also,  of 
real  estate.  The  business  is  disguised  under  the  name  of 
speculation,  but  it  is  in  nothing  different  from  the  wager 
on  the  result  of  some  game  of  cards.  The  card  player  bets 
that  he  will  win  the  game.  The  merchant,  dealing  in 
"  futures,"  bets  that  the  price  of  a  commodity  will,  at  a 
future  day,  be  a  certain  sum,  more  or  less  than  the  rulino" 
market  price.  In  neither  case  does  the  result  add  anythino" 
to  the  world's  wealth;  there  is  only  an  exchange  of  the 
ownership  of  property  without  any  corresponding  benefit 
to  the  former  owner. 


1  Byles  on  Bills,  144;  Nantes  v.  Thompson,  2  East,  285;  Kent  v.  Bird, 
Cowp.  583;  Roebuck  v.  Hamerton,  Cowp.  737;  Halford  v.  Ryraer,  10 
B.  &C.  724;  Morgan  v.   Pebrer,  4  Scott,  230. 

2  Rust  V.  Gott,  9  Cow.  169. 

3  Clark  V.  Gibson,  12  N.  H.  386, 

*  See  Tiedeman's  Police  Power,  §  99a,  for  a  general  discussion  of 
these  contracts  from  the  standpoint  of  constitutional  law. 

309 


§    189  THE    CONSIDERATION.  [CH.  X. 

But  in  this  class  of  cases,  it  is  difficult  to  discover  the 
wrongful  element  in  the  prohibited  transactions,  and  in  dis- 
tinojuishino:  them  from  le":itimate  tradino;.  The  so-called 
"option  contracts"  are  in  form  contracts  for  the  sale  or 
purchase  of  commercial  commodities  for  future  delivery, 
at  a  certain  price,  with  the  option  to  one  or  both  of  the  par- 
ties in  settlement  of  the  contract  to  pay  the  difference  be- 
tween the  contract  price  and  the  price  ruling  on  the  day  of 
delivery,  the  difference  to  be  paid  to  the  seller,  if  the  mar- 
ket price  is  lower  than  the  contract  price,  and  to  the  pur- 
chaser, if  the  market  price  is  higher.  Such  a  contract  has 
three  striking  elements:  First,  it  is  a  contract  for  future 
delivery;  secondly,  the  delivery  is  conditional  upon  the 
will  of  one  or  both  of  the  parties;  and  thirdly,  the  pay- 
ment of  differences  in  prices,  in  the  event  that  the  right 
of  refusal  is  exercised  by  either  party.  If  the  common- 
law  offense  of  regrating  were  still  recognized  in  the  crim- 
inal law,  all  contracts  for  future  delivery  may  be  open 
to  serious  objection.^  But  that  doctrine  of  the  common 
law  is  repudiated,  and  it  may  nowbe  couf^idered as  definitely 
settled  that  a  contract  for  future  delivery  of  goods  is  not 
for  that  reason  void.  If  they  infringe  the  law,  it  must  be 
for  some  other  reason  than  that  the  contract  stipulates  for 
a  future  delivery.  This  is  not  only  true  when  the  vendor 
has  the  goods  in  his  possession  at  the  time  of  sale,  but  also 
when  he  expects  to  buy  them  for  future  delivery.  Lord 
Tenterden  claimed  that  in  the  latter  case  the  contract  was  a 
wager  on  the  future  price  of  the  commodity,  and  for  that 
reason   should   not  be  enforced.^     But  the  position  here 

1  See  Tiederaan's  Police  Power,  §  05. 

^  "  I  have  always  thought,  and  shall  continue  to  think  until  I  am  told 
by  the  House  of  Lords  that  I  am  wi'ong,  that  if  a  man  sells  goods  to  be 
delivered  on  a  future  day,  and  neither  has  the  goods  at  the  time,  nor  has 
entered  into  any  prior  contract  to  buy  them,  nor  has  any  reasonable  ex- 
pectation of  receiving  by  assignment,  but  means  to  go  into  the  market 
and  to  buy  the  goods  which  he  has  coutracted  to  deliver,  he  cauuot  main- 
310 


CH.  X.]  THE    CONSIDERATION.  §    189^ 

taken  has  since  been  repudiated  by  the  English  courts,  on 
the  ground  that  it  is  not  a  wager,  and  if  a  wager,  not  one 
which  tends  to  injure  the  public.^  The  latter  opinion  is 
generally  followed  in  the  United  States,  and  it  may  be 
stated,  as  the  American  rule,  that  bona  fide  contracts  for 
future  delivery  of  goods  are  not  invalid,  because  at  the 
time  of  sale  the  vendor  has  not  in  his  actual  or  potential 
possession  the  goods  which  he  has  agreed  to  sell.^ 

It  is  also  held  to  be  an  objectionable  feature  in  such  con- 
tracts, that  the  vendee  has  no  expectation  of  receiving  the 
goods  purchased  into  his. actual  possession,  but  intends  to 
resell  them  before  the  delivery   of   the  possession  to  him.^ 

tain  an  action  on  such  contract.  Such  a  contract  amounts,  on  the  part  of 
the  vendor,  to  a  wager  on  the  price  of  the  commodity,  and  is  attended 
with  the  most  mischievous  consequences."  Lord  Tenterden  in  Bryan  v. 
Lewis,  Reg.  &  Moody,  385c.     See  also,  Longmeru.  Smith,  1  B.  &  C.  1. 

1  "  I  have  always  entertained  considerable  doubt  and  suspicion  as  to 
the  correctness  of  Lord  Tenterden's  doctrine  in  Bryan  v.  Lewis.  It  ex- 
cited a  good  deal  of  suprise  in  my  mind  at  the  time,  and  when  examined, 
I  think  it  is  untenable.  I  cannot  see  what  principle  of  law  is  at  all  af- 
fected by  a  man's  being  allowed  to  contract  for  a  sale  of  goods,  of  which 
he  has  not  possession  at  the  time  of  the  bargain,  and  has  no  i*easonable 
expectation  of  receiving.  Such  a  contract  does  not  amount  to  a  wager, 
inasmuch  as  both  the  contracting  parties  know  that  the  goods  are  not  in 
the  vendor's  possession;  and  even  if  it  were  a  wager,  it  is  not  illegal, 
because  it  has  no  necessary  tendency  to  injure  third  parties."  Baron 
Parke  in  Hlbblewhite  v.  McMorine,  5  M.  &  W.  58.  See  Mortimer  w. 
McCallan,  6  M.  &  W.  58;  Wells  v.  Porter,  3  Scott,  141. 

"  Head  v.  Goodwin,  37  Me.  181;  Rumsey  v.  Berry,  65  Me.  570;  Lewis 
V.  Lyman,  22  Pick.  437;  Thrall  v.  Hill,  110  Mass.  328;  Heald  v.  Builders' 
Ins.  Co.,  Ill  Mass.  38; Smith  v.  Atkins,  18  Vt.  461;  Noyes  v.  Spaulding, 
27  Vt  420;  Hull  v.  Hull,  48  Conn.  250;  Hauton  v.  Small,  3  Sandf.  230; 
Currie  v.  White,  45  N.  Y.  822;  Bigelow  v.  Benedict,  70  N.  Y.  202;  Biua's 
Appeal,  55  Pa.  St.  294 ;  Brown  v.  Speyer,  20  Gratt.  309 ;  Phillips  v.  Oc- 
mulgee  Mills,  55  Ga.  633;  Noyes  v.  Jenkins,  55  Ga.  586;  Townville  u. 
Casey,  1  Murphy,  389;  Whitehead  v.  Root,  2  Met.  (Ky.)  584;  McCarty 
V.  Blevins,  13  Tenn.  195;  Wilson  v.  Wilson,  37  Mo.  1;  Logan  v.  Musick, 
81  111,  415;  Plxleyv.  Boynton,  79  111.  351;  Pickering  u.  Case,  79  111.  329; 
Lyonw.  Culbertson,  83  111.  33;  Corbett  v.  Underwood,  83  111.  324;  San- 
born V.  Benedict,  78  111.  309;   Wolcott  v.  Heath,  78  111,  433. 

3  Ashtonu   Dakiu,  4  H.  &  N.  807;  Sawyer,  Wallace  &  Co.  v.  Daggert, 

311 


§    189  THE    COXSIDERATION.  [CH.  X. 

To  quote  the  words  of  the  Kentucky  court,  "sales  for 
future  delivery  have  long  been  regarded  and  held  to  be 
indispensable  to  modern  commerce,  and  as  long  as  they 
continue  to  be  held  valid,  one  who  buys  for  future  delivery 
has  as  much  right  to  sell  as  any  other  person,  and  there  can 
not,  in  the  very  nature  of  things,  be  any  valid  reason  why 
one  who  buys  for  future  deliver}"  may  not  resolve,  before 
making  the  purchase,  that  he  will  resell  before  the  day  of 
delivery,  and  especially  when,  by  the  rules  of  trade,  and  the 
terms  of  his  contract,  the  person  to  whom  he  sells  will  be 
bound  to  receive  the  goods  from  the  original  seller,  and 
pay  the  contract  price. ^"  Nor  is  a  contract  necessarily  hurt- 
ful to  the  public  welfare,  which  provides  on  payment  of  a 
valuable  consideration  that  one  at  a  future  day  shall  have 
the  right  to  buy  certain  property  or  sell  other  property, 
according  as  one  or  the  other  happens  to  be  advantageous 
to  him.  One  may  have  a  lawful  and  beneficial  end  in  view 
in  acquiring  such  a  right  of  refusal. ^  Mercantile  contracts 
of  this  character  are  not  infrequent,  and  they  are  consist- 
ent with  a  bona  fide  intention  on  the  part  of  both  parties 
to  perform  them.  The  vendor  of  goods  may  expect  to 
produce  or  acquire  them  in  time  for  a  future  delivery,  and 
while  wishing  to  make  a  market  for  them,  is  unwilling  to 
enter  into  an  absolute  obligation  to  delivery,  and  there- 
fore bargains  for  an  option  which,  while  it  relieves  him 
from  liability,  assures  him  of  a  sale,  in  case  he  is  able  to 
deliver ;  and  the  purchaser  may,  in  the  same  way,  guard 
himself  against  loss  beyond  the  consideration  paid  for 
the  option,  in  case  of  his  inability  to  take  the  goods,  there 

It  Bash,  730;  Cameron  v.  Durkheim,  55  N.  Y.  425.  But  see,  contra, 
Brua's  Appeal,  55  Pa.  St.  294;  Fareira  ?;.  Gabell,  89  Pa.  St.  89;  North  v. 
Philips,  89  Pa.  St.  250. 

1  Sawyer  et  al.  v.  Taggart,  14  Bush,  730. 

2  Story  V.  Solomon,  71  N.  Y.  420;   Kingsbury  v.  Kirwau,  71  N.  Y.  612; 
Harris  v.  Lumbridge,  83  N.  Y.  92 ;  Bigeiow  v.  Benedict,  70  N.  Y.  202. 

312 


CH.  X.]  THE    CONSIDEEATION.  §    189 

is  no  inherent  vice  in  such  a  contract.^  And  the  con- 
sideration for  this  option  may  very  properly  be  the 
difference  between  the  ruling  market  price  and  the  price 
specified  in  the  contract.  For  that  would  be  the  damage 
to  the  other  party  resulting  from  the  sale  of  the  option  or 
refusal.^ 

If  each  of  the  preceding  propositions  is  correct,  then  the 
illegality  of  option  contracts  must  depend  upon  the  inten- 
tion of  the  parties  not  to  deliver  the  goods  bargained  for, 
but  merely  to  pay  the  difference  between  the  market  price 
and  contract  price.  The  cases  are  unanimous  in  the  opin- 
ion that  a  contract  for  the  payment  of  differences  in  prices, 
arising  out  of  the  rise  and  fall  in  the  market  price  above  or 
below  the  contract  price,  is  a  wager  on  the  future  price  of 
the  commodity,  and  is  therefore  invalid.^  If  the  contracts 
were  in  form,  as  well  as  in  fact,  agreements  to  pay  the  dif- 

1  Bigelow  V.  Benedict,  70  N.  Y.  202.  la  this  case,  A.,  for  a  valuable 
consideration,  agreed  to  purcliase  gold  coin  of  B.  at  a  named  price,  the 
coin  to  be  delivered  at  any  time  withiu  sis  months  that  B.  might 
choose.  This  case,  as  a  legitimate  transaction,  is  more  easily  under- 
stood than  where  the  option  is  to  buy  certain  goods  or  to  sell  others, 
but  the  latter  can  exist  under  lawful  circumstances,  and  have  a  lawful 
end  in  view.     See  Story  v.  Salmon,  71  N.  Y.  420. 

2  Story  V.  Solomon,  71  N.  Y.  420;  Harris  v.  Lumbridge,  83  N.  Y. 
92,  and  the  cases  cited  in  the  next  note. 

3  Eumseyu.  Berry,  65  Me.  574;  Wymanu.  Fiske,  3  Allen,  238 ;  Brigham 
V.  Meade,  10  Allen,  246;  Barratt  v.  Hyde,  7  Gray,  160;  Brown  v.  Phelps, 
103  Mass.  303;  Hatch  v.  Douglass,  48  Conn.  116;  Noyes  v.  Spaulding,  27 
Vt.  240;  Story  v.  Solomon,  71  N.  Y.  420;  Bigelow  v.  Benedict,  70  N.  Y. 
202;  Harris  v.  Lumbridge,  83  N.  Y.  92;  North  v.  Phillips,  89  Pa.  St.  250; 
Kuchizky  v.  De  Haven,  97  Pa.  St.  202;  Dickson's  Exr.  v.  Thomas,  97 
Pa.  St.  278;  Kirkpatrick  v.  Bonsall,  72  Pa.  St.  155;  Brown  v.  Speyer,  20 
Gratt.  296 ;  Williams  v.  Carr,  80  N.  C.  294 ;  Williams  v.  Tiedemann,  6 
Mo.  App.  269;  Lyon  v.  Culbertson,  83  HI.  33;  Cole  v.  Milmine,  88  111. 
349;  Corbitt  v.  Underwood,  83  HI.  324;  Pickering  v.  Cease,  79  111.  338; 
Pixley  V.  Boynton,  79  111.  351;  Barnard  v.  Backhouse,  52  Wis.  593;  Saw- 
yer V.  Taggart,  14  Bush,  727;  Gregory  v.  Wendall,  39  Mich.  337;  Shaw 
V.  Clark,  49  Mich.  284;  Gregory  v.  Wattoma,  58  Iowa,  711;  Everlngham 
V.  Meighan,  55  Wis.  354;  Rudolph  v.  Winters,  7  Neb.  125. 

313 


§     1.S9  THE   CONSIDERATION.  [CH.  X. 

ferences  in  prices,  tliey  could  be  easily  avoided  and  thrown 
out  of  court.  But  the  contracts  never  assume  the  form  of 
wagers  on  the  price  of  the  commodity.  They  are  almost 
always  undistinguishable  from  those  option  contracts,  in 
w^hich  the  parties  in  good  faith  have  bargained  for  the  re- 
fusal of  the  goods,  and  which  are  valid  contracts.^  There 
is  no  evidence  on  the  face  of  the  contract  of  the  determin- 
ation of  the  parties  to  settle  on  the  differences  in  price ; 
and  while  such  a  contract  may  be  used  as  a  cover  for  com- 
mercial gambling,  it  is  not  necessarily  a  wager  on  the  future 
price  of  the  commodity.  It  is  the  ordinary  rule  of  law 
that  where  a  writing  is  susceptible  of  two  constructions, 
one  of  which  is  legal  and  the  other  illegal,  that  construc- 
tion will  prevail,  which  is  in  conformity  with  the  law.^ 
Applying  this  rule  to  the  construction  of  option  contracts, 
it  has  very  generally  been  held  that  these  contracts  are 
valid  and  enforcible,  unless  it  be  proven  affirmatively  that 
the  parties  did  not  intend  to  make  a  delivery  of  the  goods 
bargained  for,  but  to  settle  on  the  differences.^    And  if  it  be 

1  The  following  is  a  good  illustration  of  the  ambiguity  of  the  con- 
tract: "For  value  received,  the  bearer  (S.)  may  call  on  the  undersigned 
for  one  hundred  (100)  shares  of  the  capital  stock  of  the  Western  Union 
Telegraph  Company,  at  seventy-seven  and  one-half  (77i|)  per  cent,  at  any 
time  in  thirty  days  from  date.  Or  the  bearer  may,  at  his  option,  deliver 
the  same  to  the  under.signed  at  seventy-seven  and  one-half  (77A)  per 
cent.,  at  any  time  within  the  period  named,  one  day's  notice  required." 
Story  V.  Salomon,  71  N.  Y.  420. 

2  "  It  is  a  general  rule,  that  wheresoever  the  words  of  a  deed,  or  of 
the  parties  without  deed,  may  have  a  double  intendment,  and  the  one 
standeth  with  law  and  right,  and  the  other  is  wrongful  and  against  law, 
the  intendment  that  standeth  with  the* law  shall  be  taken."  Coke  on 
Lyt.  42,  18.S. 

3  Story  V.  Salomon,  71  N.  Y.  420;  Kingsbury  v.  Ivirwan,  71  N.  Y.  612; 
Harris  u.  Lurabridge,  83  N.  Y.  92;  Williams  v.  Tiedemann,  6  Mo.  App. 
274;  Union  Nat.  Bank  y.  Carr,  15  Fed.  Kep.  438,  and  cases  cited  in  pre- 
ceding notes.  In  delivering  the  opinion  of  the  court,  in  Story  v.  Salo- 
mon, sup.,  Earl,  J.,  said:  "On  the  face  of  the  contract  the  plaintiff 
provided  for  the  contingency  that  on  that  day  he  might  desire  to  pur- 
chase the  stock,  or  he  might  desire  to  sell  it,  and  in  either  case  there 

314 


CH.  X.]  THE    CONSIDERATION.  §    189 

shown  that  only  one  of  the  parties  entertained  this  illegal 
intention,  while  the  other  acted  in  good  faith,  the  contract 
will  be  void  as  to  the  first,  but  will  be  euforcible  in  behalf 
of  the  second. 1  This  rule  of  construction  is  adopted  by 
most  of  the  courts,  in  determining  the  legality  of  these 
questionable  contracts;  but  a  different  rule  has  been  adopted 
in  Wisconsin.  The  contract  which  constituted  the  subject 
of  the  suit,  was  in  form  a  legitimate  transaction,  and  there 
was  no  proof  that  it  was  used  as  a  cover  for  commercial 
gambling.  The  court  declared  it  to  be  the  duty  of  the 
plaifitiff  to  show  that  he  had  made  a  bona  fide  contract  for 
the  delivery  of  the  commodities  bought  and  sold,  instead 
of  throwing  upon  the  defendant  the  burden  of  proving  that 
the  contract  was  made  for  the  payment  of  differences  in 
price,  and  did  not  contemplate  any  delivery  of  the  grain. ^ 

would  have  to  be  a  delivery  of  the  stock,  or  payment  in  damages  in 
lieu  thereof.  We  should  not  infer  an  illegal  intent  unless  obliged  to. 
Such  a  transaction,  unless  intended  as  a  mere  cover  for  a  bet  or  wager 
on  the  future  price  of  the  stock,  is  legitimate  and  condemned  6y  no  stat- 
ute, and  that  it  was  so  intended  was  not  proved.  If  it  had  been  shown 
that  neither  party  intended  to  deliver  or  accept  the  shares,  but  merely  to 
pay  differences  according  to  the  rise  or  fall  of  the  market,  the  contract 
would  have  been  illegal." 

^  Rumsey  v.  Berry,  65  Me.  570;  Williams  v.  Carr,  80  N.  C,  94;  Sawyer 
et  al.  V.  Taggert,  14  Bush,  727;  Gregory  v.  Wendall,  39  Mich.  337. 

2  The  court  claimed  that  it  would  "  not  do  to  attach  too  much  weight 
or  importance  to  the  mere  form  of  the  contract,  for  it  is  quite  certain 
that  the  parties  will  be  astute  in  concealing  their  intention,  as  the  real 
nature  of  the  transaction,  if  it  be  illegal.  It  may  be  safely  assumed, 
that  the  parties  will  make  such  contracts  valid  in  form ;  but  courts  must 
not  be  deceived  by  what  appears  on  the  face  of  the  agreement.  It  is 
often  necessary  to  go  behind,  or  outside  of,  the  words  of  the  contract  — 
to  look  into  the  facts  and  circumstances  which  attended  the  making  of 
it  —  in  order  to  ascertain  whether  it  was  intended  as  a  bona  fide  pur- 
chase and  sale  of  the  property,  or  was  only  colorable.  And  to  justify 
a  court  in  upholding  such  an  agreement,  it  is  not  too  much  to  require  a 
party  claiming  rights  under  it,  to  make  it  satisfactoxily  and  affirmatively 
appear  that  the  contract  was  made  with  an  actual  view  to  the  delivery 
and  receipt  of  grain,  not  as  an  evasion  of  the  statute  against  gaming,  or 

315 


§     190  THE    CONSIDERATION.  [CH.  X. 

It  follows,  US  a  consequence,  if  it  be  proved  in  any  case 
that  a  commercial  instrument  had  })een  ojiven  in  settlement 
of  the  difference  in  prices  in  an  option  deal  of  the  illegiti- 
mate sort,  it  is  void  and  cannot  be  enforced,  as  between 
the  immediate  parties.^  If  the  statute  prohibiting  stock 
gambling  expressly  declares  commercnal  paper  based  upon 
such  illegal  transactions  to  be  void,  then  the  paper  cannot 
be  enforced  by  a  bona  fide  holder ;  ^  but  if,  as  is  usually  the 
case,  there  is  no  statutory  provision  of  this  kind,  the  paper 
will  be  valid  in  the  hands  of  an  innocent  indorsee.^ 

§  190.  Contracts  in  restraint  of  trade. — Ever  since 
the  earliest  days  of  English  national  life,  contracts,  having 
the  object  to  restrain  trade  and  commerce,  have  been  de- 
clared to  be  illegal  and  void.*  The  most  common  form 
these  contracts  took  was  that  of  an  as^reement  not  to  enjjaore 
in  a  particular  calling  or  trade.  At  an  early  day,  it  was 
held  that  all  such  agreements  of  every  kind  and  degree  were 
illegal.  But  since  the  rule  originated  as  a  consequence  of 
the  stringent  regulations  of  the  law  relating  to  apprentice- 
ship,—  by  which  it  was  impossible  for  anyone  to  ply  a 
trade  without  having  served  a  seven  years'  apprenticeship, — 
and  these  regulations  were  more  and  more  relaxed,  until 
they  were    completely  abrogated    in    most   of  the  United 

as  a  cover  for  a  gambling  trausactiou."     Baruard  v.  Backhouse,  52  Wis. 
693.     See,  to  the  same  effect,  Cobb  v.  Prell,l.'>  Fed.  Rep.  774. 

1  Fareria  v.  Gabell,  89  Pa.  St.  89;  Brua's  Appeal,  55  Pa.  St.  294; 
Smith  V.  Bouvier,  79  Pa.  St.  325;  Hawley  ??.  Bibb,  G9  Ala.  52;  Teu- 
nej  V.  Foote,  4  Bradw.  594;  Swartz's  Appeal,  3  Brewst.  131.  But  see 
Hentz  r.  Jewel,  20  Fed.  Rep,  592;  Third  Nat.  Bank  v.  Linsley,  11  Mo. 
App.  498;  Shaw  V.  Clark,  49  Mich.  384;  Sawyer  v.  Macaulay,  18  S.  C. 
543;  Third  Nat.  Bankr.  Harrison,  3  McCreary,  316. 

2  Tenuey  v.  Foote,  4  Bradw.  594. 

3  Broughtou  V.  Manchester  Water  Works  Co.,  3  B.  &  Aid.  10;  Day  v. 
Stuart,  G  Biug.  109;  s.  c.  3  M.  &  P.  334. 

^  1  Daniel's  Negot.  lust.  195;  2  Parsons' Contracts,  *748;  Byles  on 
Bills,  138. 

316 


CU.  X.]  THE    COXSIDERATION.  §     190 

States;  the  rule  prohibiting  all  contracts  which  tended  to 
restrain  trade  was  reduced  to  a  prohibition  of  all  contracts 
which  restrained  the  obligor  from  carrying  on  the  trade 
anywhere,  while  it  became  lawful  to  make  contracts  which 
prohibited  the  prosecution  of  a  trade  or  calling  in  some  par- 
ticular manner.^  The  limitations  upon  the  restraint  of 
trade  which  would  make  such  restraint  lawful  may  be  in 
respect  to  the  space,  within  which  the  business  may  not  be 
carried  on ;  ^  but  the  authorities  do  not  agree  how  restricted 

J  In  Alger  v.  Thacher,  19  Pick.  51,  the  leading  case  on  the  subject  in 
this  country,  Judge  Morton,  delivering  the  opinion  of  the  court,  said : 
"Among  the  most  ancient  rules  of  the  common  law,  we  find  it  laid  down, 
that  bonds  of  restraint  of  trade  are  void.  As  early  as  the  second  year 
of  Henry  V.  (A.  D.  1415),  we  find  by  the  year  books  that  this  was  con- 
sidered to  be  old  and  settled  law.  Through  a  succession  of  decisions, 
it  has  been  handed  down  to  us  unquestioned  till  the  present  time.  It  is 
true  the  general  rule  has,  from  time  to  time,  been  modified  and  qualified, 
but  the  principle  has  always  been  regarded  as  important  and  salutary. 
For  two  hundred  years  the  rule  continued  unchanged  and  without  excep- 
tions. Then  an  attempt  was  made  to  qualify  it,  by  setting  up  a  distinc- 
tion between  sealed  instruments  and  simple  contracts.  But  this  could 
not  be  sustained  upon  any  sound  principle.  A  different  distinction  was 
then  started,  between  a  general  and  a  limited  restraint  of  trade,  which 
has  been  adhered  to  down  to  the  present  day.  This  qualifl  cation  of  the 
general  rule  may  be  found  as  early  as  the  eighteenth  year  of  James  I. 
(A.  D.  1621),  Broad  v.  Jollyfe,  Cro.  Jac.  596,  where  it  was  holden,  that  a 
contract  not  to  use  a  certain  trade  in  a  particular  place  was  an  exception 
to  the  general  rule  and  not  void.  And  in  the  great  and  leading  case  on 
this  subject,  Mitchell  y.  Reynolds,  reported  in  Lucas,  27,  85,  130,  Fortes- 
cue,  296,  and  1  P.  Wms.  181,  the  distinction  between  contracts  under 
seal  and  not  under  seal  was  finally  exploded,  and  the  distinction  between 
limited  and  general  restraints  fully  established.  Ever  since  that  decision, 
contracts  in  restraint  of  trade  generally  have  been  held  to  be  void ;  while 
those  limited  as  to  time,  or  place  or  persons,  have  been  regarded  as 
valid,  and  duly  enforced.  Whether  these  exceptions  to  the  general  rule 
were  wise,  and  have  really  improved  it,  some  may  doubt;  but  it  has  been 
too  long  settled  to  be  called  in  question  by  a  lawyer."  See  also  Chap- 
pel  V.  Brockway,  21  Wend.  157;  Ross  v.  Sadgbeer.  21  Wend.  166; 
Jarvis  v.  Peck,  1  Hoff.  Ch.  479;  Bowser  v.  Blitz,  7  Blackf.  344;  Grasselll 
V.  Lowden,  11  Ohio  St.  349. 

•  2  Nobles  u.  Bates,  7  Cow.  307;  Kinsman  o.  Parkhurst,  18  How.  389; 
Mott  0.  Mott,  11  Barb.  127;  Hulock  v.  Blacklowe,  2  Saund.  156,  n.  1;  Van 

317 


§     r.'O  TIIK    CONSIDKUATIOX.  [cil.   X. 

or  extensive  tliese  limitations  may  be,  in  order  that  the 
restraint  may  he  lawful.'  But,  in  any  case,  in  order  to  be 
legal,  the  limitations  expressed  to  be  imposed  upon  the 
operation  of  the  contract  in  restraint  of  trade  must  be 
made  in  good  faith,  and  not  merely  for  the  purpose  of 
evading  the  law."^  The  limit  may  also  be  in  respect  to  the 
persons,  with  whom  the  business  is  to  be  carried  on ;  in 
other  words  the  agreement  may  be  not  to  do  business  with 
certain  customers,^  or  not  to  conduct  the  business  in  a  cer- 
tain manner,  subject  to  or  against  certain  trade  regulations.* 
Following  the  reason  of  the  rule,  which  prohibits  con- 
tracts in  restraint  of  trade,  we  find  that  it  is  made  to  pro- 
hibit all  contracts  which  in  any  way  restrain  the  freedom 
of  trade  or  diminish  competition,  or  regulate  the  prices  of 
commodities  and  services.  All  combinations  of  capitalists 
and  of  workmen  for  the  purpose  of  influencing  trade  in 
their  especial  favor,  by  raising  or  reducing  prices,  are  so 

Marter  v.  Babcock,  23  Barb.  G33;  Davis  v.  Mason,  5  T.  R.  118;  Ward  v. 
Byrue,  4  M.  &  W.  548;  Lawrence  v.  Kidder,  10  Barb.  641;  Mitchell  v. 
Reynolds,  1  P.  Wms.  190;  Beard  v.  Dennis,  6  Ind.  200;  Homer  v.  Asli- 
ford,  3  Bing.  323;  Horner  u.  Graves,  7  Bing.  735;  Bunn  v.  Guy,  4  East, 
190. 

1  In  Stearns  v.  Barrett,  1  Pick.  443,  it  was  held  lawful  to  make  an 
agreement  not  to  use  certain  machines  in  any  of  tlie  Udited  States,  ex- 
cept two  (Massachusetts  and  Rhode  Island).  See  Dean  w.  Emerson,  102 
Mass.  480;  Thomas  v.  Miles,  3  Ohio  St.  274.  So,  also,  not  to  follow  a 
trade  or  calling  in,  or  within  a  certain  distance  (six,  ten  and  twelve 
miles)  of,  a  town.  Smalley  v.  Greene,  52  Iowa,  241;  Linn  v.  Sigsbee,  67 
111.  75;  Cook  v.  Johnson,  47  Conn.  175;  McClurg's  Appeal,  58  Pa.  St.  51. 
On  the  other  hand  it  has  been  held  to  be  illegal  to  make  a  contract  not 
to  carry  on  a  calling  within  the  limits  of  a  State.  Taylor  v.  Blanchard, 
13  Allen,  370;  Wright  v.  Rider,  3G  Cal.  342.  But  see,  coH^ra,  Beal  ». 
Chase,  31  Mich.  490. 

2  See  Jones  v.  Lees,  1  H.  &  N.  189;  Dunlop  r.  Gregory,  10  N.  Y.  241. 

3  Mitchell  V.  Reynolds,  1  P.  Wms.  190;  Tallis  v.  Tallis,  1  El.  &  Bl.  .391; 
Pembertou  v.  Vaughn,  12  Q.  B.  87;  Sainter  v.  Ferguson,  7  C.  B.  716; 
Mallan  r.  May,  11  M.  &  W.  653;  Green  v.  Price,  13  M.  &  W.  695;  Price  v. 
Green,  16  M.  &  W.  346;   Davis  v.  Mason,  5  T.  R.  118. 

<  Gross  r.  La  Page,  Holt,  105;  Lightfoot  v.  Tenant,  1  Bos.  &  P.  552. 
318 


CH.  X.]  THE    COXSIDEKATION.  §    192 

far  illeofal,  that  ao;ieements  to  combine  cannot  be  enforced 
in  the  courts,  and  constitute  insufficient  considerations  for 
the  commercial  obligations  that  may  be  given  in  payment 
of  penalties.^ 

§  191.  Contracts  in  restraint  of  marriages, —  are  also, 
on  the  ground  of  public  policy,  held  to  be  void,  and  con- 
sequently insufficient  considerations  for  commercial  paper. 
This  is  not  only  true,  where  the  restraint  is  general  and 
without  limit;'-'  but  also  where  it  is  limited  in  point  of 
time.^  But  an  agreement,  not  to  marry  a  particular  per- 
son has  been  held  to  be  a  reasonable  and  lawful  restraint 
upon  marriage,  which  did  not  in  any  way  offend  public 
policy.*  On  the  other  hand,  it  has  been  held  to  be  an  un- 
lawful restraint  of  marriage  for  one  to  promise  a  woman 
to  marry  no  one  but  her.^ 

§  192.  Contracts  for  the  procurement  of  mai'riages 
and  divorces.  —  For  the  same  reasons,  contracts  to  pay 
money  or  to  transfer  other  valuable  property  for  procuring 
a  marriage  with  ^  or  divorce  from  some  one, are  void..^ 

1  Morris  Ruu  Coal  Co.  v.  Barclay  Coal  Co.,  68  Pa.  St.  173;  Stanton  v. 
Allen,  5  Deuio,  434;  Brisbane  v.  Adams,  3  N.  Y.  129;  Noyes  v.  Day,  14 
Vt.  384;  Doolin  v.  Ward,  6  Johns.  194;  Thompson  v.  Davies,  13  Johns. 
112. 

2  1  Parsons'  N.  &B,  214;  Byles  on  Bills,  138;  Hartley  v.  Rice,  10  East, 
22;  Lowe  v.  Peers,  4  Burr.  2225;   Gibson  v.  Dickie,  3  M.  &  S.  463. 

2  Hartley  v.  Rice,  10  East,  22;  Sterlings.  Sinnickson,  2  South.  756. 

*  See  Tiedemau  on  Real  Prop.,  §  275. 

^  Lowe  V.  Peers,  4  Burr.  2225.  But  see  Gibson  v.  Dickie,  3  M.  &  SeL 
463,  where  it  was  held  to  be  lawful  for  a  man  to  make  a  settlement  of 
an  annuity  upon  a  woman,  with  whom  he  had  an  illicit  intercourse,  on 
condition  that  she  remained  single. 

6  Stribblehill  v.  Brett,  2  Veru.  445;  Hall  v.  Potter,  3  Lev.  411;  s.  c. 
Show.  P.  C.  76;  Roberts  v.  Roberts,  3  P.  Wms.  66. 

'  Adams  v.  Adams,  25  Minn.  72;  Sayles  v.  Sayles,  21  N.  H.  312;  Stou- 
tenburgh  r.  Lybraud,  13  Ohio  St.  228;  Beard  v.  Beard,  Cal.  (1884)  — ; 
Muckenburg  v.  Holler,  29  Ind.  139;    Everhart  v.  Puckett,  73  Ind.  409. 

319 


§    193  THE    CONSIDERATION.  [CH.  X. 

§  193.  Contracts  in  fraud  of  creditors.  —  Fniud  of  any 
kind  vitiates  the  contract  into  which  it  enters  ;  and  this  is 
true,  not  only  when  the  fraud  is  actual,  but  also  when  it  is 
legal  or  constructive.  All  contracts  based  upon  fraud  are 
void  ;  and  consequently  all  commercial  paper  issued  in  set- 
tlement of  a  fraudulent  contract  is  void,  except  as  against 
bona  fide  holders  for  value. ^  The  contract  is  void,  not 
only  when  the  fraud  is  aimed  at  one  of  the  parties  to  the 
contract,  but  also  when  it  affects  the  interest  of  third  per- 
sons, such  as  creditors.  A  note  or  bill  issued  in  fraud  of 
creditors  is  void.^  The  more  common  forms  of  contracts 
in  fraud  of  creditors  have  relation  to  the  settlement  of  an 
insolvent's  estate  in  bankru))tcy.  The  bankrupt  and  insolv- 
ent laws  provide  for  an  equal  distribution  of  the  assets 
among  the  creditors;  and,  therefore,  when  the  debtor 
attempts  to  favor  one  or  more  of  the  creditors,  at  the  ex- 
pense of  the  others,  either  as  an  expression  of  friendly 
feeling,  or  as  an  inducement  for  the  favored  creditors  to 
sign  a  composition  deed,  or  to  secure  the  bankrupt's  dis- 
charge, the  commercial  paper,  issued  in  performance  of 
these  illegal  agreements,  is  void  and  cannot  be  enforced.* 

But  a  note  by  husband  to  wife,  for  the  consideration  of  her  withdrawal  of 
tlie  divorce  suit,  is  lawful.  Adams  v.  Adams,  24  Hun,  401 ;  s.  c.  91  N.  Y. 
381.  But  see  Van  Orden  v.  Van  Ordeu,  8  Hun,  315;  Phillips  v.  Meyer, 
82  111.  67. 

1  1  Daniel's  Negot.  Inst.  193,  197;  Gordon  v.  Clapp,  113  Mass.  33.5. 

*  Fay  y.  Fay,  121  Mass.  561;  Powell  v.  Inman,  7  Jones,  28:  Hamilton 
V.  Scull,  25  Mo.  165;  Fenton  v.  Ham,  35  Mo.  409. 

3  Cockshottv.  Bennett,  2  T.  R.  763;  Jackson  v.  Lomas,  4  T.  R.  166? 
Rose  V.  Main,  1  Bing.  N.  C.  356;  s.  c.  I  Scott,  127;  Cooling  v.  Noyes,  6 
T.  R.  263;  Leicester  v.  Rose,  4  East,  372;  Davis  v.  Holding,  1  M.  &  W. 
159;  Bryant  v.  Cliristie,  1  Stark.  329;  Lewis  v.  Jones,  4  B.  &  C.  511; 
Spurrett  v.  Spiller,  1  Atk.  105;  Jackson  v.  Davison,  4  B.  &  Aid.  695; 
Took  r.  Tuck,  4  Bing.  224;  Britton  v.  Hughes,  5  Biug.  400;  Knight  v. 
Hunt,  5  Bing.  432:  Ex  parte  Sadler,  15  Ves.  55;  Grimes  v.  Hillenbrand, 
4  Hun,  354.  Consent  to  composition  deed,  see  Bryant  v.  Christie,  1  Stark. 
329;  Humphreys  v.  Welling,  1  Hurlst.  &  C.  7;  Cockshott  v.  Bennett,  2  T. 
R.763;  Jackson  V.  Lomas,  4 T.  R.  166;  Caseu.  Gerrish,  15  Pick.  49;  Har- 
320 


CII.  X.]  THE    CONSIDERATION.  §    194 

So,  also,  are  commercial  obligations  void,  which  are  given 
for  commencing^  or  discontinuing  bankruptcy  proceedings. ^ 
And  such  contracts  are  illegal,  although  the  sum  to  be  paid 
to  the  favored  creditor  is  not  more  than  the  amount  of  the 
debt  originally  due  to  him.^ 

The  commercial  obligations  of  third  persons  are  also 
void,  which  are  given  for  any  of  the  considerations  just 
mentioned,  which  operate  in  fraud  of  creditors,  as  well  as 
the  obligations  of  the  debtor.*  And  a  note,  issued  to  a 
creditor  to  induce  him  to  do  some  act  in  favor  of  the  bank- 
rupt, executed  after  the  doing  of  the  act,  but  agreed  on 
beforehand,  is  illegal.^ 

§  194.  Maintenance  and  cliamperty. —  Maintenance  and 
champerty  are  offenses  at  common  law,  and  consist  of  inter- 
meddling in  another's  law  suits,  stirring  up  strife,  and  ad- 
vancing the  means,  in  the  form  of  money  or  of  services, 

vej  V.  Hunt,  119  Mass.  279;  Winn  v.  Thomas,  55  N.  H.  294;  Weaver  t?. 
Waterman,  18  La.  Ann.  241;  Doughty  v.  Savage,  28  Conn.  146.  Con- 
tracts to  pay  an  extra  sum  as  an  inducement  to  favor  or  not  oppose  a  bank- 
rupt's discharge,  see  Cockshott  v.  Bennett,  2  T.  R.  763;  Nerot  v.  Wallace, 
3  T.  R.  17;  Sumner  v.  Brady,  1  H.  Bla.  647;  Davis  v.  Holding,  1  M.  &  W. 
159;  Murray??.  Reaves,  8  B.  &  C.  421;  Birch  v.  Jervis,  3  C.  &  P.  379; 
Holland  v.  Palmer,  1  Bos.  &  P.  95;  Rogers  v.  Kingston,  2  Bing.  441 ;  s.  c. 
10  Moore,  97;  Baker  v.  Matlack,  1  Ashm.  68;  Hayward  v.  Chambers,  5 
B.  &  Aid.  753;  Jackson  v.  Davison,  4  B.  &  Aid.  691;  Simmons  v.  West,  2 
Miles,  196;  Robson  v.  Calze,  1  Doug.  228;  Wiggin  v.  Bush,  12  Johns. 
306;  Sharp  v.  Teese,  4  Halst.  352;  Austin  v.  Markham,  44  Ga.  161;  Rice 
V.  Maxwell,  21  Miss.  289. 

1  Payne  v.  Eden,  3  Caines,  213.  It  is  claimed  that  an  agreement  to 
file  petition  in  bankruptcy  would  be  void  although  done  by  a  bona  fide 
creditor  and  with  the  knowledge  of  other  creditors.  See  Edwards  on 
Bills,  §  381. 

2  Paton  V.  Stewart,  78  111.  481 ;  Fell  v.  Cook,  44  Iowa,  485.  See  United 
States  Rev.  Stat.,  §§  5120,  5131. 

3  Howe  V.  Litchfield,  3  Allen,  443;  Rice  v.  Maxwell,  13  Sm.  &  M.  289 

*  1  Daniel,  194;  Bruce  v.  Lee,  4  Johns.  410;  Bell  v.  Leggett,  7  N.  Y. 
176.     But  see  contra,  Fox  v.  Paine,  10  Ala.  523. 

»  Fay  V.  Fay,  121  Mass.  561 ;   Howe  v.  Litchfield,  3  Allen,  443. 

21  321 


§     196  THE    COXSIDEItATION.  [CII.  X. 

for  prosecuting  the  suit.  Agreements  for  remuneration 
for  such  loans  or  services  are  void  and  cannot  be  enforced, 
wherever  the  common  law  has  not  been  changed  by  statute.^ 

§  195.  Offenses  against  morality  and  religion,  —  Com- 
mercial paper,  given  as  a  compensation  for  the  commission 
of  offenses  against  morality  and  religion,  is  illegal  and  of 
no  force,  as  l)etween  the  parties.'^  Thus  a  note  has  been 
held  to  be  void,  which  was  given  as  compensation  for  libel- 
ing another  or  selling  libelous  books  ;'^  for  future  illicit 
cohabitation*  or  for  renting  lodgings  for  purposes  of  pros- 
titution.^ 

§  196.  Usury. "^ — At  common  law,  it  was  lawful  to  exact 
any  rate  of  interest  that  the  parties  may  agree  upon,  and, 
although  there  have  been  statutes  in  force  in  England, 
which  imposed  a  limitation,  they  have  been  since  repealed, 

1  Master  v.  Miller,  4  T.  R.  340;  Flight  v.  Lemen,  4  Q.  B.  883;  Bell  v. 
Smith,  5  B.  &  C.  188;  Williamson  ».  Hanley,  (j  Biiig.  299;  Stauley  v.  Joues, 
7  Bing.  369;  Alexanders.  Polk,  39  Miss.  737;  Thurston  r.  Percival,  1 
Pick.  415;  Lathrop  v.  Amherst  Bank,  9  Met.  489;  Martin  v.  Voeder,  20 
Wis.  4GC;  Byrd  v.  Odem,  9  Ala.  755;  HoUoway  v.  Lowe,  7  Porter,  488; 
Satterlee  v.  Frazer,  2  Sandf.  141;  Rush  v.  Laru,  4  Litt.  417;  Coughlin 
V.  N.  Y.,  etc.,  R.  Co.,  71  N.  Y.  443;  Martin  v.  Clarke,  8  R.  I.  389;  Orr  v. 
Tanner,  12  R.  I.  94;  Quigley  v.  Thompson,  53  Ind.  317;  Thompson  v. 
Reynolds,  73  111.  11;  Allard  v.  Lamiraude,  29  Wis.  502.  See  Schomp  v. 
Schenck,  11  Vroom,  195. 

2  1  Parsons,  214;  1  Daniel,  197;  Jackson  v.  Duchaire,  3  T.  R.  551. 

3  1  Daniel,  197;  Stockdale  v.  Onwhyn,  5  B.  &  C.  173;  Fores  w.  Johnes, 
4  Esp.  97. 

*  1  Parsons,  214;  1  Daniel,  194.  But  it  is  held  that  a  note  will  be 
good  which  has  been  given  for  a  past  offense  of  that  kind.  Ex  parte 
Munford,  15  Ves.  289;  Gibson  v.  Dickie,  3  M.  &  S.  463;  Marchioness 
of  Anuaudale  v.  Harris,  2  P.  Wms.  432;  Turner  v.  Vaughan,  2  Wils.  339; 
Smith  V.  Richards,  29  Conn.  232;  Brown  v.  Kinsey,  81  N.  C.  245;  Sheuk 
V.  Mingle,  13  Serg.  &  R.  29. 

5  Jennings  v.  Throgmorton,  Ry.  &  M.  251 ;  Girardy  v.  Richardson,  1 
Esp.  13. 

6  As  to  the  constitutionality  of  the  statutes  against  usury,  see  Tiede- 
man's  Lim.  Police  Power,  §  94. 

.^99 


CH.  X.]  THE    COXSIDERATION.  §    196 

thus  revivins:  the  old  common-law  rule.^  In  manv  of  the 
United  States,  there  are  no  statutes  of  this  kind,  but  in  the 
States  given  below,  usury  laws  are  found  to  be  in  force. ^ 
It  is  not  possible  in  an  elementary  work  on  commercial 
paper  to  discuss  in  detail  the  manifold  ways  in  which  the 
usury  laws  may  be  and  are  apparently  evaded,  and  yet  vio- 
lated. Suffice  it  to  say  that  it  matters  not  what  subterfuges 
may  be  resorted  to,  if  in  fact  a  larger  return  is  exacted  and 
obtained  for  the  loan  of  money  than  the  legal  rate  of  inter- 
est, the  commercial  instrument  is  usurious,  and  comes  under 
the  condemnation  of  the  usury  laws.^  The  only  difference  is 
that,  if  the  usurious  character  does  not  appear  on  the  instru- 
ment, it  can  be  enforced  in  favor  of  a  bona  fide  holder  with- 
out notice  of  its  real  character.* 

^  Byles  on  Bills,  140.    Except  as  to  securities  upon  real  estate. 

2  Since  the  usury  laws  are  being  constantly  changed  by  later  statutes, 
the  following  statement  can  only  be  taken  as  approximately  correct. 
The  highest  rate  of  interest  that  can  be  exacted  is  six  per  cent,  in  Dela- 
ware, Kentucky,  Maryland,  New  Hampshire,  New  Jersey,  New  York, 
Pennsylvania,  Vermont,  West  Virginia;  seven  per  cent,  in  South  Carolina; 
eight  per  cent,  in  Alabama,  Illinois,  Louisiana,  North  Carolina,  Ohio, 
Virginia;  ten  'per  cent,  in  Indiana,  Iowa,  Michigan,  Mississippi,  Mis- 
souri, Tennessee,  Wisconsin;  twelve  per  cent,  in  Kansas,  Minnesota, 
Nebraska,  Oregon,  Texas.  If  more  than  the  lawful  rate  of  interest  is 
exacted,  the  entire  interest  is  forfeited,  the  principal  of  the  debt  being 
alone  recoverable,  in  Alabama,  Illinois,  Maryland,  Mississippi,  Nebraska, 
New  Jersey,  North  Carolina,  Texas,  Wisconsin.  In  Missouri,  the  inter- 
est at  ten  per  cent  is  forfeited  and  paid  over  to  the  school  fund.  The 
unlawful  excess  of  interest  is  forfeited,  leaving  the  principal  and  lawful 
interest  recoverable  in  Iowa,  Kansas,  Kentucky,  Michigan,  Minnesota, 
Ohio,  Pennsylvania,  Tennessee,  Vermont,  Virginia,  West  Virginia.  In 
New  Hampshire,  the  legal  rate  and  principal  can  be  recovered,  but  a 
penalty  may  be  recovered  by  any  one  who  chooses  to  sue  for  it,  equal  to 
treble  the  amount  of  the  usurious  interest.  The  entire  debt  with  inter- 
est is  forfeited  in  Delaware,  Louisiana,  and  in  Oregon,  the  debt  with 
interest  is  paid  over  to  the  school  fund. 

3  Rose  V.  Dickson,  7  Johns.  196;  Whipple  v.  Powers,  7  Vt.  457;  White 
V.  Wright,  5  D.  &  R.  110;  Barnard  v.  Young,  17  Ves.  44. 

*  Rockwell  V.  Charles,  2  Hill,  499;  Holmes  v.  Williams,  10  Paige,  326; 
McKnight  v.  Wheeler,  6  Hill,  492 ;  Brumrael  v.  Enders,  18  Gratt.  873.    But 

32.S 


§    10(5  THE    COXSIDEIIATIOX.  [CII.   X. 

But  it  is  not  usurious  to  exact  compound  interest,  al- 
thouo'h  it  is  on  other  grounds  unlawful  to  exact  compound 
interest,  at  least  when  the  agreement  is  made  before  the 
interest  has  accrued.^  It  is  lawful  however  to  agree  to  paj 
interest  on  interest,  after  the  interest  has  already  accrued,' 
or  to  provide  beforehand  for  the  compounding  of  interest 
as  a  penalty  for  the  non-payment  of  the  interest  when  it 
accrues.^ 

Nor  is  it  usurious  to  provide  for  the  payment  of  exchange 
in  a  paper,  payable  in  a  different  place,  in  addition  to  the 
legal  rate  of  interest,  provided  the  market  rate  of  exchange 
be  alone  exacted.*  Nor  is  it  usury  to  omit  a  charge  for 
exchange  where  the  rate  is  in  favor  of  the  place  of  pay- 
ment." But  if  such  an  agreement,  whether  for  exchange, 
or  for  payment  at  par,  when  the  exchange  was  at  premium, 
is  made  with  an  usurious  intent,  it  is  illegal  for  that  reason.^ 

Whether  it  is  usurious  to  include  a  charge  for  attorney's 
fees  and  commissions,  has  been  decided  by  the  courts  in 
both  the  affirmative^  and  in  the  negative.^     But  the  com- 


in  New  York  and  other  States,  imdcr  the  statute  of  that  State,  the  paper 
is  void  in  any  event  even  in  the  hands  of  a  bona  fide  holder  for  value. 
Wilkie  V.  Roosevelt,  3  Johns.  6G,  20G;  Altenheimer  u.  Cook,  11  Heisk. 
309. 

1  Townsend  v.  Corning,  1  Barb.  627;  Miner  v.  Paris  Exch.  Bank,  53 
Tex.  559. 

2  Hamilton  v.  Le  Grange,  2  H.  Bl.  Ui;  Fobes  v.  Canfield,  3  Ohio,  17; 
Watkinson  v.  Root,  4  Ohio,  373;  Leonard  v.  Mason,  1  Wend.  521. 

3  Greenleaf  v.  Kellogg,  2  Mass.  568;  Pierce  v.  Rowe,  1  N.  H.  179.  In 
Missouri,  the  statute  authorizes  the  compounding  of  interest  on  yearly 
rests.     Mo.  Rev.  Stat.  1879,  §  2728. 

*  Marvine  v.  Hyraers,  12  N.  Y.  223;  Merritt  v.  Benton,  10  Wend.  117. 

«  Bank  of  U.  S.  v.  Waggener,  9  Pet.  378;  Cuyler  v.  Sanford,  13  Barb. 
339. 

«  Ontario  Bank  v.  Schermerhorn,  10  Paige,  109;  Churchman  v.  Mar- 
tin, 54  Ind.  380;  Seneca  Co.  Bank  v.  Schermerhorn,  1  Denio,  133. 

7  Bean  w.  .Tones,  8  N.  H.  U9;  Myer  v.  Hart,  40  Midi.  517;  Miller  u. 
Gardner,  49  Iowa,  234. 

8  Gaar  v.  Louisville  Banking  Co.,  11  Bush,  180. 

324 


CII.  X.]  THE    CONSIDERATION.  §    191) 

missions  of  one  who  indorses  or  guarantees  commercial 
paper  for  accommodation  will  not  be  usurious,  although 
larger  than  the  leo;al  rate  of  interest/ 

If  a  paper  is  originally  free  from  the  charge  of  usury,  it 
will  not  be  invalid  because  of  a  subsequent  usurious  con- 
tract in  connection  with  its  transfer,  so  as  to  prevent  a  re- 
covery on  it  by  the  indorsee  against  the  maker  or  acceptor.^ 
And  although  the  discount  of  more  than  the  legal  rate  of 
interest  in  the  transfer  of  commercial  paper  is  ordinarily 
usurious,  as  between  the  indorsee  and  his  immediate  in- 
dorser,  it  is  not  always  so.  Where,  in  good  faith,  and 
without  an  intention  to  violate  the  usury  law,  an  indorsee 
buys  an  instrument  of  indebtedness  at  a  discount  below  par 
greater  than  the  leo-al  rate  of  interest,  on  account  of  the 
greater  risk  of  losing  his  money,  by  the  failure  of  the 
party  or  parties  to  the  instrument,  it  is  not  a  usurious  con- 
tract, although  the  paper  is  accompanied  by  a  guaranty 
that  the  indorsee  will  receive  payment  of  the  face.^  But 
such  an  indorsee  is  a  holder  for  value  only  for  the  amount 
he  paid  for  the  paper  with  lawful  interest.* 

Finally,  the  renewal  of  an  usurious  paper  will  not  purge 
the   transaction  of    its  unlawful  character,   unless  in  the 


1  Ketchum  u.  Barber,  4  Hill,  224;  Suydam  v.  Westfall,  4  Hill,  211 ; 
Barber  v,  Ketchum,  7  Hill,  444;  Moore  v.  Howlaud,  4  Deuio,  264;  Trot- 
ter V.  Curtis,  19  Johns.  160;  Suydam  v.  Bartle,  10  Paige,  94;  De  Forest 
V.  Strong,  8  Conn.  513. 

2  Pollard  V.  Scholey,  Cro.  Eliz,  20;  s.  c.  1  Sauud.  294;  Wood  v.  Grim- 
■wood,  10  B.  &  C.  679;  Phillips  v.  Cockagne,  3  Campb.  119;  Parr  v. 
Eliason,  1  East,  92;  Knight  v.  Putnam,  8  Pick.  184;  French  v.  Griudle, 
15  Me.  163;  Farmers.  Sewall,  16  Me.  456;  SteAvart  v.  Bramhall,  11  Hun, 
139;  Archer  V.  Shea,  14  Hun,  493.  But  where  the  paper  is  not  in  fact 
negotiated,  until  it  is  indorsed,  of  course,  the  usurious  character  of  the 
indorsement  taints  the  whole  contract.  Tufts  v.  Shepherd,  49  Me.  312; 
Eastman  v.  Shaw,  65  N.  Y.  522. 

3  Eapelye  v.  Anderson,  4  Hill,  472;  Brummel  v.  Euders,  18  Graft.  873; 
Holmes  v.  Williams,  10  Paige,  826. 

*  Faut  V.  Miller,  17  Graft  77;  Saylor  v.  Daniels,  37  111.  331. 

325 


Bowen  &  Bowon 


§     111 7  THE    CONSIDERATION.  [CH.   X. 

renewal  only  the  principal  sum  with  lawful  interest 
is  reserved.^  Merely  changing  the  form  of  the  paper 
in  the  renewal  will  leave  the  contract  usurious  still. '^ 
But  where  some  third  person  gives  a  note  or  other  commer- 
cial obligation  in  satisfaction  of  another's  usurious  obliga- 
tiou,  the  new  obligation  is  valid  and  free  from  the  taint  of 
usury,  the  giving  of  the  new  paper  amounting  to  a  pay- 
ment of  the  old  debt  and  a  consequent  waiver  of  the  stat- 
utory defense  of  usury. ^  And  where  the  original  debt  was 
legal,  and  a  usurious  obligation  is  substituted  for  the  orig- 
inal debt  is  still  valid,  notwithstanding  the  substituted 
paper  is  invalid  on  account  of  usury.* 

§  197.  Violations  of  the  banking  acts. — The  banking 
laws  of  the  United  States  and  of  the  several  States,  in  the 
reguhition  of  banks  and  banking,  frequently  prescribe  lim- 
itation on  the  power  of  the  banking  companies  in  the  ne- 
gotiations of  loans,  and  the  issue  of  its  commercial  paper. 
Whenever  a  bank  issues  a  note  or  other  written  obligation 
in  payment  of  a  debt  prohibited  by  these  laws,  it  is  illegal 
and  void  between  the  immediate  parties.''     Thus  it  is  illegal 

'  Barnes  v.  Headley,  2  Taunt.  184;  Marchant  v.  Dodgin,  2  Moore  &  S. 
632;  Wright  v.  Wheeler,  1  Campb.  1G5;  s.  c.  2  Stark.  238;  Scott  i;. 
Lewis,  2  Conn.  132;  Church  v.  Toralinson,  2  Conn.  134,  n.;  Campbell  v. 
Sloan,  62  Pa.  St.  481. 

2  Campbell  v.  Sloan  62  Pa.  St.  481;  Bell  v.  Lent,  24  Wend.  230; 
Pickett  V.  Merchants'  Nat.  Bank,  32  Ark.  346.  And  this  is  true  although 
in  consequence  of  the  renewal,  as  a  new  consideration,  an  intervening 
note  to  a  third  person  had  been  cancelled.  Archer  v.  McCrary,  59  Ga. 
547.     But  see  Drake  v.  Chandler,  18  Gratt.  909. 

3  Wales  V.  Webb,  5  Conn.  154;  Macungie  Saving  Bank  *.  Hottenstein, 
89  Pa.  St.  328. 

*  Gray  v.  Fowler,  1  H.  Bl.  462.  Such  a  renewal  is  void,  although 
the  usurious  premiums  be  provided  for  in  a  separate  note.  Swartout  v. 
Payne,  19  Johns.  294. 

*  Brown  v.  Torkinton,  3  Wall.  377;  Swift  y.  Beers,  3  Denio,  70; 
Springfield  Bank  r.  Merrick,  14  Mass.  322;  Reynolds  v.  Nichols,  12  Iowa, 
399.  And  the  trust  deed  given  to  secure  the  payment  of  the  paper  so 
illegally  issued  is  also  void.     Leavitt  v.  Palmer,  3  N.  H.  19. 

326 


CH.  X.]  THE    CONSIDERATION.  §    198 

in  some  of  the  States  for  banking  companies  to  make  loans 
to  stockhoklers  for  more  than  half  the  value  of  the  stock 
held  by  them,  and  a  note  given  for  the  excess  is  void.^ 
So,  also,  is  it  prohibited  by  statute  in  some  States  for 
banks  to  take  certain  currency,  both  foreign  and  domestic, 
and  a  commercial  paper  based  on  the  receipt  of  the  pro- 
hibited currency  is  illegal  and  void.^ 

§  198.  Other  illegal  considerations  —  Knowledge  of 
illegal  intent.  —  It  is  impossible  to  give  a  detailed  state- 
ment of  the  various  considerations  which  are  made  illegal 
by  statute.  SuiBce  it  to  say  that  whenever  a  statute  makes 
a  transaction  illegal,  a  commercial  obligation,  given  in  set- 
tlement of  the  transaction,  is  void  on  account  of  this  ille- 
gality of  the  consideration.^ 

1  Pemigewassett  Bank  v.  Rogers,  18  N.  H.  255. 

2  Springfield  Bank  v.  Merrick,  14  Mass.  322;  Merchants'  Bank  v. 
Spauldiug,  9  N.  Y.  53;  Bank  of  Chillicothe  v.  Dodge,  8  Barb.  233;  s.  c. 
15  N.  Y.  53.  But  where  the  agreement  to  deliver  the  prohibited  bills  is 
not  performed,  and  instead  of  it  lawful  bills  are  transferred  as  a  con- 
sideration, the  note  given  for  it  will  be  valid.  Noble  v.  Cornell,  1 
Hilt.  98. 

»  Hatch  V.  Burroughs,  1  Woods  439;  Vallett  v.  Parker,  6  Wend.  615; 
Nerot  V.  Wallace,  3  T.  R.  17;  Waymell  v.  Reed,  5  T.  R.  599;  Bensley  v. 
Bignold,  5  B.  &  Aid.  335;  Hodgson  v.  Temple,  5  Taunt.  181;  Langton  v. 
Hughes,  1  M.  &  S.  593;  Bank  of  Louisville  v.  Young,  37  Mo.  398.  This 
is  true,  also,  where  the  act  is  impliedly  prohibited  by  the  imposition  of  a 
penalty.  1  Parsons' Notes  &  Bills,  213;  Grifflthw.  Wells,  3Denio,  22G.  The 
rule  is  also  the  same,  where  the  consideration  is  the  transfer  of  a  con- 
tract which  is  prohibited  by  statute.  Cummingsr.  Jaux,  30  La.  Ann.  207. 
For  obligations  issued  in  violation  of  revenue  and  license  laws,  see  Biggs 
r.  Lawrence,  3  T.  R.  454;  Banks  v.  Colwell,  3  T.  R.  81;  Liglitfoot  u. 
Tenant,  1  Bos.  &  P.  551;  Vaudyck  v.  Hewitt,  1  East,  97;  Hodgson -y. 
Temple,  5  Taunt.  181;  Tayloru.  Crowland  Gas  Co.,  10  Exch.  2937;  Arm- 
strong V.  Toler,  11  Wheat.  258;  De  Beginnis  v.  Armistead,  10  Bing.  107; 
s.  c.  3  M.  &  P.'  511;  Langton  v.  Hughes,  1  M.  &  S.  59G;  May  v.  Will- 
iams, 27  Ala.  267.  But  a  note  is  good  which  is  given  for  a  bid  to  an  un- 
licensed auctioneer.  GunnaldsoniJ.  Nylius,  27  Minn.  44.  For  violations 
of  the  Sunday  laws,  see  Drury  v.  De  Fontaine,  1  Taunt.  131 ;  Scarf e  v.  Mor- 
gan, 4  M.  &  W.  270;  Simpson?;.  Nichols,  3M.  &W.  240;  Koutsr.  Dickson, 

327 


§     108  THE    CONSIDERATION.  [('H.  X. 

Not  only  is  a  commercial  obligation  void,  which  is  given 
for  the  commission  of  an  unhiwful  act,  but  likewise  when  it 
was  given  for  furnishing  the  means  of  violating  the  law, 
whether  it  be  money  or  merchandise.^  It  has  been  held 
that  the  mere  knowledge  of  the  vendor  that  the  goods  he  is 
selling  are  to  be  used  in  the  furtherance  of  an  illegal  cause, 
without  his  participation  in  that  illegal  intention,  will  not 
invalidate  a  note  given  for  the  purchase  money. ^  And  this 
is  held  to  be  the  true  rule,  especially  where  the  articles, 
which  were  sold  for  an  illegal  purpose,  are  in  themselves 
innocent.^  But  in  some  of  the  courts  it  has  been  held  that 
the  seller  need  not  participate  in  any  way  in  the  violation  of 
the  law;  simply  a  knowledge  on  his  part  of  the  intention 
to  make  an  unlawful  use  of  the  goods  he  sells,  will  invali- 
date a  note  or  bill  given  for  the  purchase-money.*     The 

40  Miss.  341.  For  violations  of  the  liquor  laws,  see  Hubbell  v.  Flint,  13 
Gray,  277;  Caldwell  v.  Wentworth,  14  N.  H.  431;  Carlton  ??.  Bailey,  27 
N.  H.  230;  Inhabitants  of  Webster  v.  Sanborn,  47  Me.  471 ;  Turck  v.  Rich- 
mond, 13  Barb.  533;  Griffith  v.  Wells,  3  Denio,  226;  Cottle  v.  Cleaves,  70 
Me.  256;  Doolittle  v.  Lyman,  44  N.  H.  608;  Paton  v.  Coitt,  5  Mich.  505; 
Baker  u. Collins,  9  Allen,  253.  See  generally,  Oulds  v.  Harrison,  10  Exch. 
572;  Hall  v.  Fi'anklin,  3  M.  &  W.  259;  Grant  v.  AVelchman,  16  East,  207; 
Walker  v,  Johnson,  2  Cranch  C.  C.  203;  Lorentz  v.  Conner,  69  Ga.  761; 
Johnston  v.  McConnell,  65  Ga.  129. 

1  1  Parsons'  N.  &  B.  214;  De  Groot  v.  Van  Duzer,  20  Wend.  390;  Can- 
nan  V.  Bryce,  3  B.  &  Aid.  179;  McKinnell  v.  Robinson,  3  M.  &  W.  434; 
Blount  V.  Proctor,  5  Blackf.  265;  Tracy  v.  Talmage,  14  N.  Y.  162. 

*  Hodgson  V.  Temple,  5  Taunt.  181;  James  v.  Planters,  9  Heisk.  455; 
Puryear  v.  McGavock,  9  Heisk.  461.  In  Bank  of  Tennessee  v.  Cum- 
mings,  9  Heisk.  470,  the  note  was  given  for  money  loaned  for  the  express 
purpose  of  making  saltpeti*e  for  the  government  of  the  Southern  Confed- 
eracy. For  a  similar  purpose,  see  McGavock  v.  Puryear,  6  Coldw.  34, 
where  liquor  is  sold  w"ith  knowledge  of  the  intention  to  sell  it  again  in 
retail  in  violation  of  the  license  laws.  Kreiss  v.  Seligraan,  8  Barb.  439. 
See  also  Gaylord  v.  Soragen,  32  Vt.  110,  where  there  was  knowledge  of 
an  intention  to  use  the  goods  in  violation  of  the  laws  of  another  State. 
See,  further,  Gardner  v.  Maxey,  9  B.  Mon.  90;  Coppock  v.  Bower,  4 
M.  &  W.  361;  Clark  v.  Recker,  14  N.  H.  44. 

3  Henderson  v.  Waggoner,  2  Lea,  133;  Benjamin  on  Sales,  §  506. 

••  Lightfootw.  Tenant,  1  Bos.  &  Pul.  551,  where  arsenic  was  sold  with 
328 


CII.  X.]  THE    CONSIDERATION.  §    198 

Supreme  Court  of  the  United  States  distinguish  in  this  con- 
nection between  illegal  acts  which  are  heinous  in  character, 
and  those  which  constitute  only  trivial  misdemeanors  ;  hold- 
ing in  the  former  case  that  the  mere  knowledge  of  an  illegal 
intention  is  sufficient  to  invalidate  the  commercial  paper, 
while  in  the  latter  a  participation  in  the  unlawful  act  is  held 
to  be  necessary.^  But  it  is  certain  that  the  seller  must 
know  that  the  buyer  intends  to  make  an  unlawful  use  of 
the  goods,  in  order  that  the  obligation  given  for  the  pur- 
chase-money may  be  invalidated.^     And  a  mere  suspicion, 

the  knowledge  that  the  purchaser  intended  to  poison  his  wife  with  it; 
Langton  v.  Hughes,  1  Maule  &  Sel.  593,  where  harmful  drugs  are  sold 
with  knowledge  that  they  were  to  be  used  in  brewing;  Hubbell  v.  Flint, 
13  Gray,  277;  Wilson  tj.  Stratton,  47  Me.  120;  Banchor  77.  Mausel,  47  Me. 
58,  where  liquor  was  sold  in  one  State  with  knowledge  that  it  was  to  be 
sold  in  another  State  in  violation  of  law;  Canaan  v.  Bryce,  3  B.  &  AkL 
179;  De  Groot  v.  Van  Duzer,  20  Wend.  390,  where  money  was  loaned  for 
the  purpose  of  enabling  the  borrower  to  settle  his  losses  in  an  illegal 
stock -jobbing  transaction;  Hanauer  v.  Doane,  12  Wall.  342,  where 
goods  were  sold  with  knowledge  that  they  were  to  be  used  in  the  Confed- 
erate service.  See  to  the  same  effect,  Tatum  v.  Kelly,  25  Ark.  209; 
Booker  v.  Bobbins,  26  Ark.  660;  Oxford  Iron  Co.  v.  Spradley,  51  Ala.  171; 
Logan  I'.  Plummer,  70  N.  C.  388.  See  Webster  v.  Munger,  8  Gray,  584. 
But  the  burden  of  proof  is  on  the  maker  of  the  paper  to  show  that  the 
payee  had  knowledge  of  the  illegal  intent.  Converse  v.  Foster,  32  Vt. 
828. 

1  ' '  With  whatever  impunity  a  man  may  lend  money  or  sell  goods  to  an- 
other who  he  knows  intends  to  devote  them  to  a  use  that  is  only  malum 
prohibitum,  or  of  inferior  criminality,  he  cannot  do  it  without  turpitude 
when  he  knows,  or  lias  every  reason  to  believe,  that  such  money  or  goods 
are  to  be  used  for  the  perpetration  of  a  heinous  crime,  and  that  they  were 
procured  for  that  purpose.  *  *  *  There  are  cases  to  the  contrary; 
but  they  are  either  cases  where  the  unlawful  act  contemplated  to  be  done 
was  merely  malum  prohibitum,  or  of  inferior  criminality;  or  cases  in 
which  the  unlawful  act  was  committed  already,  and  the  loan  was  an  in- 
dependent contract,  made  not  to  enable  the  borrower  to  commit  the  act, 
but  to  pay  obligations,  which  he  had  already  incurred  in  committing  it." 
Bradley,  J.,  in  Hanauer  v.  Doane,  12  Wall.  342. 

2  Ely  V.  Webster,  102  Mass.  304.  And  it  will  not  affect  the  validity  of 
the  paper  if  the  seller  did  not  know  at  the  time  that  the  intended  act  was 
illegal.  Stone  v.  Hooker,  9  Cow.  154.  Coventry  v.  Barton,  17  Johns. 
142. 

329 


§     199  THE   CONSIDERATION.  [CH.  X. 

or  even  conviction,  without  actual  knowledge,  of  an  inten- 
tion to  violate  the  law,  is  not  sufficient.^  For  example,  al- 
though it  may  be  unlawful  to  lend  money  to  a  gambler  for 
the  purpose  of  engaging  in  gambling,^  it  will  not  be  sufficient 
to  invalidate  a  loan  to  a.  gambler,  simply  because  it  is  known 
that  the  borrower  is  a  gambler,  and  is  likely  to  gamble  with 
any  money  he  may  get  hold  of  .^ 

Where  partners  in  illegal  transactions,  in  the  settlement 
of  them,  provide  for  a  division  of  the  profits  by  the  giving 
of  notes  to  each  other,  it  is  held  by  some  of  the  authorities 
that  the  notes  are  nevertheless  valid.*  But  this  rule  has  in 
a  number  of  cases  been  doubted  and  in  some  denied.' 

§  199.  How  illegal  considerations  may  be  purged.  — 

A  simple  renewal  of  a  paper  void  on  account  of  illegality 
does  not  relieve  it  of  this  defect.^  But  when  an  entirely 
new  paper,  with  new  parties  and  with  a  consequent  change 
of  liability  and  the  introduction  of  a  new  consideration,  is 
substituted  for  the  invalid  paper,  —  as  where  a  third  person 
gives  his  note  in  payment  or  settlement  of  the  invalid 
note, —  the  second  paper  is  valid  and  binding,  notwithstand- 
ing its  illegal  origin.^     The  illegality  is  purged  also,  when, 

1  Savage  v.  Mallory,  4  Allen,  492. 

2  McKinnell  v.  Robinson,  3  M.  &  W.  434;  Cutler  v.  Welch,  43  N.  H. 
497;  Mordecaiv.  Dawkius,  9  Rich.  2G2. 

3  1  Parsons'  N.  &  B.  214. 

*  See  Brooks  v.  Martin,  2  Wall.  10;  Planters'  Bank  v.  Union  Bank,  16 
Wall.  483;  De  Leon  v.  Trevino,  49  Tex.  88;  Boggess  v.  Lilly,  18  Tex. 
200;  Pinkney  v.  Reynous,  4  Burr.  2069;  Petire  v.  Hanuay,  3  T.  R.  418; 
Sharp  u.  Taylor,  2  Phillips'  Ch.  801;  Armstrong  v.  Toler,  11  Wheat.  258; 
McBlair  v.  Gibbs,  17  How.  236. 

5  See  Aubert  v.  Maze,  2  B.  &  P.  373; Mitchell  v.  Cockburne,  2  H.  Bl. 
379;  Canaan  v.  Bryce,  3  B.  &  Aid.  183;  Woodworth  v.  Burnett,  43  N.  Y. 
273;  s.  c.  30  Am.  Rep.  106,  112,  note;  Morris  Run  Coal  Co.  v.  Barclay 
Coal  Co.,  68  Pa.  St.  173. 

6  See  ante,  §  180. 

^  Wales  V.   Webb,  5  Conn.   154;  Stone  v.  Smith,  6  Munf.  541;  Law's 
Ext.   v.   Sutherland,  5   Gratt.   357;    Drake   v.  Chandler,  18  Gratt.  912; 
330 


CH.  X.]  THE    CONSIDERATION.  §    200 

after  the  transfer  of  the  illegal  paper  to  a  bona  fide  pur- 
chaser without  notice,  a  new  paper  payable  to  the  indorsee 
is  substituted  for  it.^  So,  also,  where  an  illegal  note  is 
surrendered,  and  one  given  in  its  place  to  a  third  person  to 
whom  the  payee  of  the  original  paper  is  indebted,  and 
the  second  paper  is  made  payable  to  the  creditor  in  sat- 
isfaction of  the  debt  due  to  him.^  And  the  illegality  has 
been  held  to  be  purged  by  the  substitution  of  a  joint 
note,  having  a  new  party  as  surety  for  the  old  illegal 
paper. ^ 

§  200.  Inadequacy  of  consideration.  —  Mere  inadequacy 
of  consideration  will  not  constitute  a  defense,  in  whole  or 
in  part,  to  an  action  on  the  paper.  Although  a  valuable 
and  substantial  consideration  is  necessary  to  the  validity  of 
a  commercial  instrument,  it  is  not  necessary  that  it  shall  be 
equal  in  value  to  the  amount  due  on  the  instrument.*  And 
where  the  consideration  is  not  pecuniary  and  its  value  is 
not  easily  computed   in  money,  the  most  extreme  inade- 

Windham  V.  Doles,  59  Ga.  266.  And  it  does  not  affect  the  legality  of  the 
new  security,  that  the  principal  of  the  old  paper  becomes  a  surety  in  the 
new.     Drake  v.  Chandler,  18  Gratt.  909. 

1  Cuthbert  v.  Haley,  8  T.  R.  390;  Calvert  v,  Williams,  64  N.  C.  168; 
Drake  v.  Chandler,  18  Gratt.  912;  Torbett  v.  Worthy,  1  Heisk.  107. 

2  Regina  v.  Sewell,  7  Mod.  118;  Macungie  Sav.  Bank  v.  Hottenstein, 
89  Pa.  St.  328;  Sherwood  w.  Archer,  17  N.  Y.  S.  C.  (10  Hun.)  73;  Drake 
V.  Chandler,  18  Gratt.  912,  But  see  King  v.  Perry  Ins.  Co.,  57  Ala.  118, 
where  an  indorser  of  an  illegal  bill  took  it  up  with  a  new  bill,  on  which 
he  appeared  as  an  acceptor,  and  it  was  held  that  the  new  bill  was  tainted 
with  the  illegality.  And  see,  also.  First  Nat.  Bank  v.  Plankinton,  27 
Wis.  177. 

^  Gresham  v.  Morrow,  40  Ga.  487.  But  see  contra,  Campbell  v.  Stone, 
62  Pa.  St.  481. 

4  1  Daniel's  Negot.  Inst.,  §  180;  1  Parsons,  211 ;  Earl  v.  Peck,  64  N.  Y. 
598;  Worth  v.  Case,  42  N.  Y.  362;  Cowee  v.  Cornell,  75  N.  Y.  91;  Miller 
u.  McKenzie,  95  N.  Y.  595;  Morgan  v.  Richardson,  7  East,  482;  Tricky 
V.  Lame,  6  M.  &  W.  278;  Tye  v.  Gwynne,  2  Campb.  346;  Wheelock  v. 
Barney,  27  Ind.  462. 

331 


§    201  THE    CONSIDERATION.  [CU.  X. 

quacy  will  not  affect  the  validit}-  of  the  paper.*  But  where 
the  consideration  was  money  loaned,  or  a  liquidated  debt, 
only  the  amount  of  the  consideration  can  be  recovered,  any 
additional  obligation  being  deemed  in  equity  an  unlaw- 
ful pcnalty.- 

Where,  however,  there  is  a  depreciated  paper  currency, 
and  a  consequent  premium  on  gold  and  silver,  the  parties  to 
a  commercial  paper  may  agree  to  its  payment  in  coin,  and 
it  will  not  be  a  defective  consideration,  if  the  coin-paying 
j)aper  be  taken  up  by  the  execution  of  an  instrument,  which 
is  made  payable  in  currency,  and  which  calls  for  the  pay- 
ment of  the  amount  of  the  original  paper  together  with  the 
premium  on  gold  ruling  at  its  maturity.^  But  a  stipulation 
in  the  coin-paying  obligation,  that  if  not  paid  at  maturity 
judgment  shall  be  rendered  for  the  value  of  the  coin  at  the 
time  of  rendering  the  judgment,  is  viewed  in  the  light  of 
a  penalty.* 

§  201.   Failure  of    consideration,  total  and   partial. — 

A  total  failure  of  consideration  will  avoid  a  commercial  in- 
strument resting  upon  it  as  completely  as  an  original  want 
of  consideration ;  and  it  constitutes  a  good  defense  to  an 
action  upon  the  instrument,  except  as  against  holders  for 
value  and  without  notice/     If  a  subsequent  indorsee  takes 

1  Earl  V.  Peck,  64  N.  Y.  598;  Wells,  J.,  in  Sawyer  v.  Louth,  4G  Barb 
353. 

2  See  Report  of  Judges,  3  Bin.  59;  Bailey  v.  Rogers,  1  Greenl.  186; 
Whitney?;.  Slayton,  40  Me.  224;  Seney  v.  Blacklin,  2  Mass.  541;  Bond 
V.  Cutler,  10  Mass.  419;  Walcott  v.  Harris,  1  R.  I.  404;  Garnett  v. 
Yoe,  17  Ala.  74;  Rubon  v.  Stephen,  25  Miss.  253;  Cairnes  v.  Knight,  17 
Ohio  St.  68;  Trice  v.  Turrentiue,  13  Ired.  2)2;  Toles  v.  Cole,  11  111.  562; 
Stose  D.  People,  25  111.  600;  Eggleston  r.  Buck,  31  111.254;  Fontaine  u. 
Aresta,  2  McLean,  — ;  Blakemore  v.  Wood,  3  Sneed  (Tenn.),  470;  Warren 
V.  Gordon,  10  Wis.  499. 

^  Smith    V.  McKiuney,   22  Ohio    St.  200;  Williams  v.  Boozeman,  18 
La.  Ann.  532;  Cox  v.  Smith,  1  Nev.  IGl. 
*  Hastings  v.  Johnson,  2  Nev.  190. 

^  Jeffries  v.  Austin,  Stra.  647;  Solly  v.  Hinde,  2  C.  &  M.  516;  s.  c.  6 
332 


CH.  X.]  THE    CONSIDERATION.  §    201 

the  paper  with  notice  of  the  faikire  of  consideration  the 
defense  will  prevail  against  him.  But  he  will  not  be  charged 
with  notice  of  a  defect  and  with  the  duty  of  putting  him- 
self on  inquiry,  if  a  memorandum  is  put  upon  the  paper,  in- 
dicatino:  what  the  consideration  was.^  The  maker  waives 
the  defense  if  he  takes  up  the  paper  by  giving  a  new  in- 
strument to  the  indorsee,  who  holds  it.^  And,  of  course, 
under  the  proper  circumstances,  the  maker  may  be  estopped 
from  setting  up  the  defense.^  In  Louisiana,  if  a  note  con- 
tains the  words  "  without  plea  or  offset,"  action  on  it  can- 
not be  resisted  by  the  defense  of  failure  of  consideration.* 
The  authorities  are  not  quite  uniform  in  respect  to 
the  effect  of  a  partial  failure  of  consideration  ;  but  the 
general  rule  is  that  a  partial  failure  will  be  a  good  de- 
fense pro  tanto  to  an  action  on  a  commercial  instrument.^ 
Some  authorities  admit  partial  failure  to  be  a  defense, 
only  when  the  extent  of  the  failure  can  be  definitely 
ascertained   and  computed  in  money ;  ®  while  some   other 

C.  &  P.  316;  Jackson  v.  Warwick,  7  T.  R.  121;  Wells  v.  Hopkins,  5  M. 
&  W.  7;  Case  v.  Boughton,  11  Wend.  109;  Tallmadge  v.  Wallis,  25  Wend. 
107;  Anthony  v.  Harrison,  14  Hun,  198;  Starr  u.  Torry,  2  Zab.  190; 
Roots  v.  Merriwether,  8  Bush,  397;  Gage  v.  Lewis,  68  III.  604.  The  de- 
fense prevails  as  well  against  a  renewal  of  the  paper.  Commonwealth 
Ins.  Co.  V.  Whitney,  1  Met.  21;  Hooker  u.  Hubbard,  97  Mass.  175;  s.  c. 
102  Mass.  239. 

1  Hennebury  v.  Morse,  56  111.  394 

2  Griffith  V.  Trabue,  11  Heisk.  645. 

3  Carruth  v.  Carter,  26  La.  Ann.  331. 

*  Grand  Gulf  v.  Stanborough,  1  La.  Ajin.  261. 

5  Darnall  v.  Williams,  2  Stark.  166;  Peded  v.  Moore,  1  Stew.  &  P.  71; 
Wyckoff  V.  Runyon,  4  Vroom,  107;  Jeffries  v.  Austin,  Stra.  647;  Black 
V.  Ridgway,  131  Mass.  80;  Morgan  v.  Fallenstein,  27  111.  31;  Sawyer  v. 
Chambers,  44  Barb.  42;  Gamble  v.  Grimes,  2  Ind.  392;  Petillo  v.  Hop- 
son,  23  Ark.  196;  Nations  v.  Thomas,  25  Tex.  221;  Edwards  v.  Porter,  2 
Coldw.  42;  Guild  t).  Belcher,  119  Mass.  257;  Smith  v.  Ackermau,  5 
Blackf.  541;  Moore  v.  Lauham,  3  Hill  (S.  C),  299;  Bar  y.  Baker,  9  Mo. 
840;  Coburn  t'.  Ware,  30  Me.  202;  Francis  u.  Miller,  8  Md.  274;  Holz- 
worth  y.  Koch,  26  Ohio  St.  33;  Griffey  v.  Payne,  1  Morris,  68. 

*  Day  V.   Nix,   9   Moore,  159;  Morgan  v.  Richardson,  1  Campb.  40  n.; 

333 


§    202  THE    CONSIDERATION.  [CH.  X. 

cases  bold  that  it  does  not  constitute  a  good  defense, 
whether  the  failure  be  definite  or  indefinite.^  But  in  many 
of  the  States  where  this  rule  was  followed,  it  is  now 
changed  by  statute,  thus  enabling  a  partial  failure  of  con- 
sideration to  be  set  up  as  a  defense.^ 

§  202.  Failure  in  title. — The  failure  to  give  a  ffood 
title  to  land  or  personal  property,  which  has  been  sold, 
is  always  a  good  defense;  and  if  the  entire  title  fails,  it 
will  be  a  total  failure,  otherwise  only  a  partial  failure  of 
consideration.^  If  there  is  in  fact  a  failure  of  title  that 
cannot  be  cured,  the  maturity  of  the  note  given  for  the 
purchase-money,  before  the  maker  is  according  to  the  con- 

Tye  V.  Gwynne,  2  Campb.  346;  Walker  v.  Smith,  2  Vt.  539;  Hiutou  ??. 
Scott,  Dudley  (Ga.),  245;  Alleu  v.  Bank  of  the  United  States,  Spenc.  216. 

1  See  Fletcher  v.  Chase,  16  N.  H.  38;  Drew  v.  Towle,  27  N.  H.  455; 
Stone  V.  Peake,  16  Vt.  218;  Harrington  v.  Lee,  33  Vt.  249;  Richardson  v. 
Sanborn,  33  Vt.  75;  Burton  v.  Schermerhoru,  21  Vt.  289;  Foster  v.' 
Phaley,  35  Vt.  303;  Briggs  v.  Boyd,  137  Vt.  534;  Washburn  v.  Picot,  3 
Dev.  390;  Evans  v.  Williamson,  79  N.  C.  96;  Jordan  v.  Jordan,  Dudley, 
181.  In  some  of  the  cases,  cited  in  support  of  the  above  stated  propo- 
sition, the  gist  of  the  controversy  would  rather  seem  to  be  whether  there 
was  any  failure  of  consideration  at  all,  as  where  an  incumbrance  hangs 
over  a  title  to  land,  which  had  been  purchased.  See  Greenleaf  v.  Cook, 
2  Wheat.  13;  Jenuess  v.  Parker,  24  Me.  289;  Morrison  v.  Jewell,  34  Me. 
146;  Thompson  v.  Mansfield,  43  Me.  490;  Chase  v.  Weston,  12  N.  H.  413; 
Lattin  v.  Vail,  17  Wend.  188;  Martin  v.  Foreman,  18  Ark.  249;  Smith  v. 
Ackerman,  5  Blackf.  541;  Reese  v.  Gordon,  19  Cal.  147. 

2  Statutes  of  this  kind  are  to  be  found  in  Colorado,  Florida,  Georgia, 
Illinois,  Indiana,  Iowa,  New  Hampshire,  Texas  and  Vermont.  2  Ran- 
dolph Com.  Paper,  §  540  u.;  Stafford  v.  Anders,  8  Fla.  38;  Siraraous  v. 
Blackmau,  14  Ga.  318;  Williams  v.  Warnell,  28  Tex.  610.  In  Vermont, 
the  statute  permits  the  defense  to  be  set  up  only  against  the  original 
parties  to  the  instrument,  and  not  against  an  indorsee,  or  other  subse- 
quent holder  with  notice  of  the  defense.  Farrar  v.  Freeman,  44  Vt.  63; 
Thrall  v.  Hortou,  44  Vt.  386. 

3  Rock  V.  Nichols,  3  Allen,  342;  Bliss  v.  Clark,  88  Mass.  60;  Morrow 
V.  Brown,  31  Ind.  378;  Peterson  v.  Johnson,  22  Wis.  21;  Stewart  v.  In- 
sall,  9  Tex.  397;  Wheeler  v.  Standley,  50  Mo.  509;  Wright  v.  McDonald, 
44  Ga.  452;  Scudder  v.  Andrews,  2  McLean,  464;  Heaton  w.  Myers,  4 
Col,  59. 

334 


Cli.  X.]  THE    CONSIDERATION.  §    202 

tract  of  sale  entitled  to  the  deed,  will  not  prevent  the 
failure  of  consideration  being  set  up  as  a  defense  to  the 
action  on  the  note.^ 

But  a  mere  defect  of  title  does  not  constitute  such  a 
failure  of  consideration  as  will  avoid  the  contract.  A  note 
or  bill  given  for  the  purchase-money  can  be  sued  on,  not- 
withstanding the  existence  of  a  defect  in  the  title  to  the 
property,  as  long  as  the  possession  of  the  purchaser  has 
not  been  disturbed.  As  a  general  rule,  eviction,  either  ac- 
tual or  constructive,  in  consequence  of  the  defect,  is  nec- 
essary to  make  the  failure  of  consideration  an  effective 
defense. 2  But  it  has  been  held  that  where  the  contract  of 
sale  is  rescinded  on  account  of  an  existing  defect  in  the  title, 
there  is  an  effective  failure  of  consideration,  without  wait- 
ing for  an  eviction.  One  can  refuse  to  perform  his  part  of 
the  contract,  when  the  other  party  fails  to  tender  a  full 
performance  of  his  part.^  The  mere  existence  of  an  in- 
cumbrance over  the  title,  such  as  a  mortgage,  a  judgment, 
an  outstanding  dower  right,  does  not  constitute  a  failure 
of  consideration.*  But  if  the  incumbrance  is  paid  or  sat- 
isfied by  the  purchaser,  it  will  be  a  partial  failure  of  the 
consideration  to    the  amount    of   the    incumbrance.^     But 

1  Garrett  v.  Crosson,  32  Pa.  St.  373.  But  it  is  not  considered  a  failure, 
if  tlie  title  happens  not  to  be  complete  when  the  note  matured.  Spiller 
V.  Westlake,  2  B.  &  Ad.  155. 

*  Wilson  V.  Jordan,  3  Stew.  &  P.  92;  Lync^  v.  Baxter,  4  Tex.  431; 
Rice  V.  Goddard,  14  Pick.  293;  Lothrop  v.  Snell,  11  Cush.  453;  Wade  v. 
Killough,  3  Stew.  &  P.  431;  Baldridge  v.  Cook,  27  Tex.  565.  But  see 
contra,  Sumter  v.  Welsh,  1  Brev.  539. 

3  Bringham  r.  Leighty,61Ind.524;  Wade  ??.  Killough,  3  Stew.  &  P.  431. 

*  Cheny  v.  City  Nat.  Bank,  77  111.  562;  Pomeroy  v.  Burnett,  8  Blackf. 
142;  Greenleaf  v.  Cook,  2  Wheat.  13;  Chase  v.  Weston,  12  N.  H.  413; 
Jenness  v.  Parker,  24  Me.  289;  Thompson  v.  Mansfield,  43  Me.  490;  Lat- 
tin  t?.  Vail,  17  Wend.  188;  Smiths.  Ackerman,  5  Blackf.  541;  Martin  t?. 
Foreman,  18  Ark.  249. 

*  Doremus  v.  Bond,  S.Blackf.  368;  Holmau  v.  Creagmiles,  14  Ind.  177; 
Zebley  v.  Sears,  38  Iowa,  507;  Miller  v.  Gibbs,  29  Ind.  228;  Eiddle  v. 
Gage,  37  N.  H.  519 ;  Lapeue  v.  Delaporte,  27  La.  Ann.  252. 

335 


§    203  THE    CONSIDERATION.  [CII.  X. 

where  the  iucumbrance  is  bought  in  at  less  than  its  face 
value,  only  the  amount  paid  for  it  can  be  set  up  in  defense 
of  the  instrument  of  indebtedness.^ 

When  one  gives  a  quit-claim  deed  to  a  tract  of  land, 
purporting  to  convey  simply  all  his  right,  title  and  interest, 
a  want  of  title  does  not  constitute  a  failure  of  consideration, 
unless  there  be  fraud  or  misrepresentation. ^  Nor  would 
a  mere  irregularity  in  the  execution  of  the  deed  of  convey- 
ance, be  a  failure  of  consideration,  if  a  substantial  title  was 
secured  which  could  be  perfected  by  an  appropriate  action 
in  equity.^ 

§  203.  Failure  in  value. — As  a  matter  of  course,  if 
goods  are  sold,  and  prove  to  be  absolutely  worthless,  there 
is  a  total  failure  of  consideration,  which  will  operate  as  a 
defence  to  an  action  on  a  bill  or  note  given  for  the  goods.* 
And  where  an  article  is  purchased  for  a  particular  jDurpose, 
and  it  turns  out  to  be  worthless  for  that  purpose,  either  on 
account  of  difference  in  quality  or  quantity,  it  will  be  a 
total  failure  of  consideration,  even  if  the  article  has  value 
for  other  purposes.*^     And  the  authorities   all  agree  that 

1  McDowell  V.  Milroy,  69  111.  498. 

2  Owinss  V.  Thompsou,  4  111.  502;  Coudrey  v.  West,  II  111.  146;  Ker- 
ney  v.  Garducr,  27  111.  162.  Aud  it  lias  been  held  that  there  is  no  failure 
of  consideration  in  the  sale  of  a  pre-emption  right,  which  has  been  ren- 
dered valueless  by  the  assertion  of  a  paramount  title.  Ferguson  v.  Mc- 
Cain, 23  Ark.  210.  See  also  Foy  v.  Haughton,  85  N.  C.  168,  where  it  is 
held  that  the  want  of  title  does  not  constitute  a  failure  of  consideration, 
unless  the  transaction  is  complicated  with  fraud. 

3  Lee  V.  White,  4  Stew.  &  P.  178;  Brinkley  v.  Bethel,  9  Heisk.  786; 
Rock  V.  Heald,  27  Tex.  523. 

*  Crocker  v.  Crane,  21  Wend.  211;  Payne  v.  Cutler,  13  Wend.  605; 
French  u.  Gordon,  10  Kan.  370;  Merrill  v.  Gamble,  46  Iowa,  615;  Fer- 
gu.son  V.  Oliver,  8  Sra.  &  M.332;  Rogers  v.  McKnight,  4  ,J.  J.  Marsh.  154; 
Clough  V.  Patrick,  37  Vt.  421;  Pierce  v.  Stocking,  11  Gray,  174;  Cragin 
V.  Fowler,  34  Vt.  326. 

5  Agra,  etc.,  Bank  v.  Leightou,  L.   R.  2  Exch.  56;  Starr  v.  Toney,  2 
Bab.  190;  Barr  v.  Baker,  9  Mo.  840. 
336 


CH.  X.]  THE    CONSIDERATION.  §    203 

where  money  is  the  consideration,  a  partial  failure  in  the 
amount  will  be  a  good  defense.^  But  it  maybe  stated  as  a 
general  rule  that  a  slight  failure  in  the  value  of  the  goods 
sold,  which  is  not  easily  determinable  in  amount,  does  not 
constitute  a  good  defense,  unless  the  transaction  is  tainted 
with  fraud,  or  the  sale  was  accompanied  by  a  warranty  or  a 
misrepresentation. 2  Where,  however,  there  is  a  failure  of  a 
distinct  part  of  the  consideration  either  in  quality  or  in  quan- 
tity, the  courts  hold  that  it  constitutes  a  good  defense  in 
actions  upon  commercial  paper. ^  The  defense,  arising 
from  a  failure  of  consideration,  is  waived  by  a  settlement 
of  the  indebtedness,  or  by  an  execution  of  the  contract  with 
full  knowledore  of  the  defense.*  The  defense  is  also 
waived,  where  goods  are  sold  on  inspection,  and  the  parties 
have  agreed  to  abide  by  the  selection.''     And  it  has  been  held 

1  Exchange  Bank  v.  Butner,  60  Ga.  (354;  McCorcI  v.  Crooker,  83  111. 
556;  Whitacre  v.  Culver,  9  Minn.  295;  Key  v.  Knott,  9  Gill  &  J.  342.  But 
see  Leightou  y.  Grant,  20  Minn.  345,  where  it  was  held  that  if  two  or  more 
notes  are  given  in  settlement  of  an  account  for  a  larger  sum  than  what  a 
proper  accounting  would  indicate,  the  partial  failure  of  consideration 
would  not  be  a  good  defense  to  any  one  of  the  notes,  not  even  against 
the  original  payee. 

2  Tye  V.  Gwynne,  2Campb.  346;  Laiug  v.  Fidgeon,  6  Taunt.  108;  s.  c. 
4  Campb.  169:  Morgan  v.  Richardson,  7  East,  482,  n.;  Obbard  v.  Betham, 
Mood.  &M.  483;  Tricky  v.  Lame,  6  M.  &  W.  278;  Warwick  v.  Nairn,  10 
Exch.  762;  Gray  v.  Cox,  4  B.  &  C.  108;  Jones  v.  Bright,  5  Bing  535 ; 
O'Neill  V.  Bacon,  1  Houst.  215;  Allen  v.  Furbish,  4  Gray,  504;  Nichols 
V.  Hunton,  45  N.  H.  470;  Richardson  v.  Sanborn,  33  Vt.  75;  Beninger  v. 
Corwin,  4  Zab.  257.     But  see  WyckofE  v.  Runyon,  4  Vroom,  107, 

3  Earl  V.  Page,  6  N.  H.  477;  Bethel  v.  Franklin,  57  Mo.  466;  Hammett 
V.  Barnard,  1  Hun,  198.  For  failure  in  quality,  see  Agra,  etc.  Bank  y. 
Leighton,  L.  R.  2  Exch.  56;  Gauldin  v.  Shehee,  20  Ga.  531;  Hamilton  v. 
Conyers,  28  Ga.  276;  Marlow  v.  Kink,  17  Tex.  177.  But  see  Lough  v. 
Bragg,  18  Minn.  121,  where  it  is  held  that  there  is  no  failure  of  considera- 
tion, because  the  grantee  erroneously  supposed  the  contract  of  sale  in- 
cluded a  lot  of  land  not  intended  to  be  conveyed,  unless  the  contract  is 
rescinded.  See  also,  to  the  same  effect,  Morgan  v.  Richardson,  7  East, 
482. 

*  Matthews  v.  Smith,  67  N.  C.  374. 
'  Wiggins  V.  Cleghorn,  61  Ga.  364. 

22  337 


§    204  TH?:    CONSIDERATION.  [CH.  X. 

that  the  failure  of  consideration  never  constitutes  a  de- 
fense to  an  action  on  commercial  paper,  unless  the  value 
was  warranted  expressly  or  by  implication.'  Fraudulent 
representations,  however,  have  the  same  effect  as  a  breach 
of  warrant}',  in  making  the  failure  of  consideration  a  good 
defense. 2  On  the  other  hand,  a  failure  of  consideration, 
occurring:  through  a  mistake  of  fact,  does  not  constitute  a 
good  defense  to  an  action  on  commercial  paper,  although 
the  mistake  may  be  remedied  by  an  action  in  equity,  asking 
for  a  reformation  of  the  instrument.'' 

§  204.  Failure  by  non-performance  of   agreement.  — 

Where  the  consideration  is  the  performance  of  an  agree- 
ment, its  non-performance  constitutes  in  whole  or  in  part 
a  failure  of  consideration,  and  operates  as  a  good  defense 
to  a  commercial  obligation  founded  on  it.*     But  mere  delay 

1  "Welsh  V.  Carter,  1  Wend.  185;  Rudderow  v.  Huntington,  3  Sandf. 
252;  Reed  v.  Prentiss,  1  N.  H.  174;  Bryant  v.  Pember,  45  Vt.  487;  Buhr- 
man  V.  Basils,  14  Hun,  608;  Mattock  v.  Gibson,  8  Rich.  437;  Terry  v. 
Hiclf  man,  1  Mo.  App.  119 ;  Detricli  v.  McGlone,  46  Ind.  291 ;  Richards  v. 
Betzer,  53  111.  466.  See  Dicliinson  v.  Hall,  14  Piclf.  217;  Johnson  v.  Mc- 
Cabe,  37  Ind.  535;  Aldrich  v.  Stocliwell,  9  Allen,  45;  Beers  v.  Williams, 
16  111.  69;  Atkins  v.  Cobb,  56  Ga.  86;  Parrot  v.  Farnsworth,  Brayt.  174; 
Thompson  v.  Wheeler  Mfg.  Co.,  29  Kan.  476;  Ramsey  v.  Sargent,  21  N. 
H.  399;  Shepherd  v.  Temple,  3  N.  H.  455;  Davis  v.  McVickers,  11  111. 
327;  Edwards  v.  Pyle,  23  111.  354;  Manny  v.  Glendinniug,  15  Wis.  59; 
Hiner  v.  Newton,  30  Wis.  640. 

2  Mills  V.  Oddy,  2  C.  M.  &  R.  103;  Becker  v.  Vroomlan,  13  Johns.  302; 
Beall  V,  Brown,  12  Md.  550;  Jones  v.  Hathaway,  77  Ind.  14;  Whitney  v. 
Allaire,  4  Den.  554;  Elsass  v.  Moore's  Hill,  etc..  Institute,  77  Ind.  72; 
Franklin  r.  Lang,  7  Gill  &  J.  419;  Hodges  v.  Torrey,  28  Mo.  99;  Spalding 
V.  Vandercook,  2  Wend.  432;  Groff  v.  Hansel,  33  Md.  161;  Harrington 
V.  Leo,  33  Vt.  249;   Southall  v.  Rigg,  11  C.  B.  481. 

3  Carpentier  v.  Miuturu,  6  Lans.  56;  Hayues  v.  Thorn,  28  N.  H.  386; 
Rogers  v.  Rogers,  1  Hall,  391;  Maddy  v.  Sulphur  Springs  Tpk.  Co.,  57 
Ind.  148;  Wadleigh  v.  Develling,  1  Bradw.  596. 

*  Watson  V.  Russell,  3  B.   &   S.   34;  Miller  v.   Wood,  23  Ark.  546; 

Powell  V.  Subers,  67  Ga.    448;  Kelly?;.   Webb,  27  Tex.   368;  Barnes  r. 

Stevens,  62  Ind.  226;  Jeffries  v.  Lamb,  73  Ind.  202;  Convith  v.  Colter,  82 

111.  585;  Mitchell  v.  Stinson,  80   Ind.  324;  Booth  v.  Fitzer,  82  Ind.  66; 

338 


CH.  X.]  THE    CONSIDERATION.  §    204 

in  the  performance  will  not  amount  to  failure,  except,  per- 
haps, avS  a  partial  failure,  when  the  time  of  performance  is 
of  the  essence  of  the  contract. ^  And  where  no  time  is 
specified,  and  the  character  of  the  contract  will  permit  its 
performance  at  any  time,  it  has  been  held  that  there  is  no 
complete  failure  of  consideration  as  long  as  the  contract  is 
not  rescinded.^ 

In  order  that  the  non-performance  of  the  agreement  may 
constitute  a  failure  of  consideration  of  the  commercial  pa- 
per, the  agreement  must  not  be  collateral  and  remotely 
connected  with  the  paper.  In  such  a  case,  the  agreement 
cannot  properly  be  considered  a  part  of  the  consideration; 
and  its  non-performance,  therefore,  cannot  affect  the  liabil- 
ities of  the  parties  to  the  paper.' 

Dickens  v.  Morgan,  54  Iowa,  684;  Little  v.  Ttiurston,  58  Me.  86;  Tillot- 
son  r.  Grapes,  4  N.  H.  444;  Hawks  v.  Truesdale,  12  Allen,  564;  Lawrence 
V.  Griswold,  30  Mich.  410;  Andrews  v.  Woodcock,  14  Iowa,  397;  Tift  v. 
Phoenix  Ins.  Co.,  6  Lans.  198;  Stanford  v.  Davis,  54  Ind.  45;  Hope  Iron 
Works  V.  Holden,  58  Me.  146;  Miller  v.  Ritz,  3  E.  D.  Smith,  253;  Book- 
staver  v.  Jayne,  60  N.  Y.  145;  Dubois  v.  Baker,  40  Barb.  556;  Hill  v. 
Endes,  19  111.  163;  Kirkraan  v.  Boston,  67  111.  599;  Hall  v.  Henderson, 
84  111.  611;  Compton  v.  Jones,  65  Ind.  117;  Pope  v.  Hayes,  19  Tex.  170; 
Scotten  V.  Randolph,  96  Ind.  581;  Doughty  v.  Savage,  28  Conn.  146; 
McSherry  v.  Brooks,  46  Md.  103;  Pearson  v.  Cummings,  28  Iowa,  344. 

1  Bourland  v.  Gibson,  91  111.  470;  Burr  v.  Wilson,  26  Ind.  389. 

2  1  Parsons,  203,  204.  SeeSpiller  v.  Westlake,  2  B.  &  Ad.  155;  Fre- 
ligh  V.  Piatt,  5  Cow.  494;  Read  v.  Cummings,  2  Greenl.  82;  Chapman 
V.  Eddy,  13  Vt.  205;  Wade  v.  Killough,  3  Stew.  &  P.  431;  George  v. 
Stockton,  1  Ala.  136. 

3  See  Bacon  v.  Porter,  1  Root,  370;  Bacon  v.  Pettibone,  2  Root,  284; 
Crawford  v.  Robie,  42  N.  H.  162;  Spiller  v.  Westlake,  2  B.  &  Ad.  155; 
Moggridge  w.  Jones,  14  East,  486;  s.  c.  3  Campb.  38;  Grant  v.  Welch- 
man,  16  East,  207;  Maun  v.  Lent,  10  B.  &  C.  877;  Stanton  v.  Maynard,  7 
Allen,  335;  Clough  u.  Baker,  43  N.  H.  254;  Heushaw  v.  Dutton,  59  Mo. 
139;  Plumb  v.  Niles,  34  Vt.  230;  Hodgkins  v.  Moulton,  100  Mass.  309; 
Traverse.  Stevens,  11  Cush.  167;  Waterhouse  r.  Kendall,  11  Cush.  128; 
Pitkin  V.  Frink,  8  Met.  12;  Adams  v.  Wilson,  12  Met.  138;  Cook  v.  Wol- 
fendale,  105  Mass.  401;  Arbuckle  v.  Hawks,  20  Vt,  538;  Stewart  w.  An- 
derson, 59  Ind.  375;  Lester  v.  Fowler,  43  Ga.  190;  Mouutjoy  v.  Mullikin, 
16  Ind.  226;  Howe  Machine  Co.  v.  Reber,  6G  lud.  408;  Miller  v.  Howell, 

339 


§    205  THE    CONSIDERATION.  [CH.  X. 

§  205.  Failure  of    consideration  after  its  delivery. — 

Where  the  transfer  of  goods  is  the  consideration,  and  the 
goods  have  been  delivered,  their  subsequent  dispossession, 
destruction  or  diminution  in  vaUie,  whether  it  results  from 
some  inherent  defect  or  from  some  external  cause,  Avill  not 
be  considered  such  a  failure  of  consideration  as  will  avoid 
the  commercial  paper  given  for  the  purchase-money,^  un- 
less there  be  a  warranty  against  such  a  failure,  either  ex- 
press or  implied  from  a  representation  that  such  a  failure 
need  not  be  anticipated. 

2  111.  499;  Mechanics'  Bank  v.  Frazer,  8G  111.  133;  Douglass  v.  Eason,  36 
Ala.  687;  Headley  v.  Good,  24  Tex.  232. 

1  Stephens  v.  Wilkinson,  2  B.  &  Ad.  320;  Lomas  v.  Bradshaw,  9  C.  B. 
620;  Jones  v.  Jones,  6  M.  &  W.  84;  Smock  v.  Pierson,  68  Ind.  405; 
Blackman  u.  Dowling,  63  Ala.  304;  Dowling  v.  Blackman,  70  Ala.  303; 
Winslow  V.  Wood,  70  N.  C.  405;  Britton  v.  Clark,  16  Ohio,  297;  Brooks 
V.  Cutter,  119  Mass.  132;  Kerchner  v.  Gettys,  18  S.  C.  521;  Loringr.  Otis, 
7  Gray,  563;  Crow  v.  Eichinger,  34  Ind.  65;  Cook  v.  Whitfield,  41  Miss. 
541;  Diamond  v.  Harris,  33  Tex.  634;  Lively  v.  Bobbins,  39  Ala.  4G1; 
Clark  V.  Smith,  21  Minn.  539;  Koch  v.  Levy,  38  Mo.  147;  Merrill  v.  Gam- 
ble, 46  Iowa,  615;  Matthews  v.  Dunbar,  3  W.  Va.  138;  Dowdy  v.  McLel- 
lan,  62  Ga.  408. 

340 


CHAPTEE    XL 


\ 


THE  ACCEPTANCE  OF  BILLS   OF  EXCHANGE   AND   CERTIFICA- 
TION OF  OTHER  COMMERCIAL  PAPER. 

Section  209.  The  object  and  effect  of  acceptance. 

210.  The  effect  of  failure  to  accept. 

211.  What  bills  must  be  presented  for  acceptance. 

212.  Presentment  by  whom  and  to  whom. 

213.  Presentment,  at  what  place. 

214.  Time  of  day  for  presentment  —  Business  hours. 

215.  Presentment,  —  within  what  time. 

216.  What  is  a  reasonable  time  for  presentment. 

217.  Form  and  manner  of  presentment  for  acceptance. 

218.  When  acceptance  may  be  dispensed  with. 

219.  Who  may  accept. 

220.  At  what  time  acceptances  may  be  made. 

221.  When  acceptance  may  be  revoked. 

222.  Acceptances,  verbal  and  written. 

223.  What  words  amount  to  acceptance. 

224.  Implied  acceptances,  detention  and  destruction  of  bill. 

225.  Acceptances  on  separate  paper. 

226.  Agreements  to  accept. 

227.  Conditional  and  qualified  acceptances. 

228.  Acceptances  for  honor  or  supra  protest. 

229.  Protest  for  better  security. 

230.  What  acceptance  admits. 

231.  The  admissions  of  acceptor  for  honor. 

232.  How  acceptor's  liability  may  be  waived. 

233.  Certified  notes. 

234.  Certified  cliecks. 

§  209.  The  object  and  effect  of  acceptance. — Merely 
drawing  a  bill  of  exchange  does  not  impose  upon  the 
drawee  any  obligation  to  pay  the  bill.  Until  he  has  agreed ^ 
by  his  acceptance  or  by  a  previous  contract  to  pay  it,  he  is 
under  no  obligation  to  do  so;  and  it  is  held,  as  a  gen- 
eral rule,  that  the  payee   or  holder   cannot  sue  the  drawee 

341 


§    209  ACCEPTANCE    OF    RILLS    OF    EXCHANGE.        [CH.  XI. 

before  acceptiince,  even  thouirh  tlio  drawee  has  sufficient 
funds  of  the  drawer  in  his  hands  to  cover  the  amount  of 
the  bill.^  The  only  exception  to  this  rule  is  where  the  hill 
of  exchange  is  held  to  operate  as  an  assignment  of  the 
funds  against  which  it  is  drawn.  This  question  has  been 
full}'  discussed,  and  the  authorities  cited,  in  a  previous 
connection, 2  and  needs  no  extensive  reference  here.  It  is 
sufficient  to  say  here,  that  if  the  bill  is  drawn  for  the  whole 
amount  of  the  deposit,  it  does  operate  as  an  ecpiitabie  as- 
signment of  the  fund,  anxl  will  bind  the  drawee  after 
notice.^ 

Until  the  bill  is  accepted,  the  drawee  is  to  such  a 
degree  considered  a  stranger  to  the  instrument,  that  he  can 
discount  it  and  have  it  indorsed  to  him,  and  again  transfer 
it  by  indorsement  to  another,  without  assuming  by  implica- 
tion the  obligation  of  an  acceptor,* 

The  acceptance  of  a  bill  means  the  agreement  of  tlie 
drawee  to  pay  the  full  amount  of  the  bill  according  to  its 
tenor.  Before  acceptance,  the  drawer  is  the  primary 
debtor;  but  afterwards,  the  acceptor  becomes  the  primary 
debtor,  and  the  drawer  remains  only  secondarily  liable  on 
,  an  implied  guaranty  that  the   acceptor  will  pay.^     The  ac- 

1  Mandeville  v.  Welch,  5  Wheat.  277;  Schiraraelpennich  v.  Bayard,  1 
Pet.  264;  Tiernan  v.  Jacksou,  5  Pet.  580;  Luff  v.  Pope,  5  Hill,  413;  7  Hill, 
577;  Harris  v.  Comstock,  3  Coinst.  93;  New  York,  etc.,  Bauk  v.  Gibson, 
6  Duer,  674:  Wharton  v.  AValker,  4  B.  &  C.  1C3;  De  Liquero  v.  Mun.son, 
11  Hei.sk.  15;  Bailey  v.  South-Western  Bank,  11  Fla.  260;  Carr  v.  Nat. 
Security  Bank,  107  Mass.  45;  Tyler  v.  Gould,  48  N.  Y,  682;  Bullard  v. 
Randall,!  Gray,  605;  Butterworth  u.  Peck,  5  Bosw.  341;  Chapman  r. 
White,  6  N.  Y.  412;    Dykers  v.  Leather  Mfrs.  Bank,  11  Paige,  612. 

2  See  ante,  §  oetseq. 

3  Mandeville  v.  Welch,  5  Wheat.  277;  Gibson  v.  Cooke,  20  Pick.  15; 
Anderson  v.  De  Soer,  6  Gratt.  364. 

*  Attenborough  v.  McKenzie,  36  Eng.  L.  &  Eq.  562;  Desha  v.  Stewart, 
6  Ala.  852;   Swope  v.  Ross,  40  Pa.  St.  186. 

6  Russell  V.    Phillips,  14    Q.   B.  (68  E.  C.  L.  R  )  891;  Cox   v.  National 
Bank,  100  U.  S.  712;    Jarvis  v.    Wilson,  46   Conn.    90;    Hoffman   r.  Mil- 
waukee Bank,  12  Wall.  181;  Hamilton  v.  Catchings,  58  Miss.  92. 
342 


CH.  XI.]        ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  §    210 

ceptor  either  satisfies  himself  out  of  funds  of  the  drawer 
which  he  has  in  his  possession ;  or  he  may  recover  of  the 
drawer  the  amount  which  he  pays  on  the  bill.  But  in  no 
case  can  he  bring  an  action  against  the  drawer,  or  charge 
the  amount  of  the  bill  in  the  account  of  the  drawer,  before 
he  actually  pays  the  bill,  and  thus  discharges  the  drawer 
from  all  responsibility.^ 

The  drawee,  by  his  acceptance, becomes  bound  by  all  the 
terms  and  conditions  of  the  bill,  and  agrees  to  pay  the  bill 
according  to  the  tenor. ^ 

§  210.  The  effect  of  failure  to  present  for  accept- 
ance. —  Whenever  it  is  the  duty  of  the  holder  of  a  bill  to 
present  it  to  the  drawee  for  acceptance,  and  he  fails  to  do 
so  in  the  proper  manner  and  time,  he  not  only  will  lose  his 
remedy  on  the  bill,  but  also  every  claim  against  the  drawer, 
the  indorsers  and  all  other  parties  liable  on  the  bill  or  in  the 
transaction  in  settlement  of  which  the  bill  was  issued.^  The 
holder  owes  this  duty  to  those  who  have  become  liable  on 
the  bill,  because  they  have  incurred  the  liability  in  expecta- 
tion of  their  being  protected  by  the  acceptance  and  pay- 
ment of  the  bill  by  the  drawee.  If  acceptance  is  refused, 
the  bill  becomes  dishonored  at  once,  and  should  be  then 
protested,  if  the  bill  be  of  the  kind  which  requires  protest; 
and  in  all  cases  of  refusal  to  accept,  notice  should  be  given 

1  Bracton  v.  Williug,  4  Call,  288 ;  Planters'  Bank  v.  Douglass,  2  Head, 
G99. 

2  Smith  V.  Muncie  Nat.  Bank,  29  Ind.  158. 

3  Camidge  v.  Allenby,  G  B.  &  C.  373;  Darrach  v.  Savage,  1  Show.  155; 
Smith  w.  Miller,  48  N.  Y.  171;  52  N.  Y.  546;  Adams  v.  Darby,  28  Mo.  182. 
In  Gracie  v.  Sandford,  9  Ark.  238,  Scott,  J.,  said:  "  In  case  a  plaintiff 
has  lost  by  his  own  laches  his  legal  recourse  against  the  defendant  upon 
the  bill  or  note,  it  is  in  vain  that  he  brings  it  int6  court  and  offers  to 
cancel  it,  with  the  expectation  of  being  allowed,  after  cancellation,  to 
proceed  to  recover  the  original  consideration.  As  well  might  he  hope, 
by  such  means,  to  revive  a  cause  of  action  that  had  been  barred  by  the 
statute  of  limitations."     See  also  Adams  v.  Boyd,  33  Ark.  33. 

343 


§211  ACCEPTANCK    OF    BILLS    OF    EXCHANGE.         [CH.  XI. 

immediately  to  all  the  parties  liable  on  the  bill,  and  .suit 
may  be  brought  at  once  against  them.^  A  State  statute, 
Avhich  prohibits  suit  on  such  a  bill  until  maturity-,  will  not 
be  binding  on  the  United  States  courts,  since  such  a  statute 
would  be  contradictory  of  the  general  law  of  commercial 
l)aper.  It  has  been  held  to  be  the  duty  of  the  United 
States  courts  to  disregard  the  statute  altogether.^ 

It  has  been  held  that  presentment  for  acceptance,  is 
necessary,  in  order  to  hold  the  drawer  and  indorsers,  even 
when  the  drawer  has  requested  the  drawee  not  to  accept  it  ;^ 
and  that  the  only  cases,  in  w'hich  presentment  may  be  dis- 
pensed with,  are  those  in  which  there  is  collusion  between 
the  drawer  and  drawee  in  fraud  of  the  holder.* 

§  211.   What  bills  must  be  presented  for  acceptance.  — 

Bills,  which  are  payable  on  a  certain  day  in  the  future,  or 
a  certain  time  after  date,  or  on  demand,  need  not  be  form- 
ally presented  for  acceptance.  They  need  not  be  pre- 
sented at  all,  until  they  mature,  when  they  should  be 
presented  for  payment.*     But  while  it  is  not  necessary,  it 

1  Goodall  V.  DoUey,  1  T.  R.  712;  Bank  of  Washingtoa  v.  Triplett,  1 
Pet.  25;  Townsley  i-.  Surarall,  2  Pet.  170;  Laudrum  v.  Trowbri  e,  2 
Met.  181 ;  Pilkiutou  v.  Woods,  10  lud.  432;  Smith  v.  Roach,  7  B.  Moa. 
17;  Kiuney  v.  Heald,  17  Ark.  397;  Lucas  v.  Ladew,  28  Mo.  342, 

2  Watson  V.  Tarpley,  18  How.  517. 
s  Hill  V.  Heap,  Dow  &  R.  N.  P.  57. 

*  Smith's  Mercantile  Law,  304;  Bank  of  Washington  v.  Triplett,  1 
Pet.  25. 

*  Bank  of  Washington  r.  Triplett,l  Pet.  25:  Townsley  v.  Sumrall,  2 
Pet.  170;  Batchellor  v.  Priest,  12  Pick.  391);  Bank  of  Bennington  r,  Ray- 
mond, 12  Vt.  401:  Allen  f.  Suydam,  20  Wend.  321;  Plato  v.  Reynolds, 
27N.Y.  580;  House  r.  Adams,  48  Pa.  St.  201;  Orr  r.  Magiuuis,  7  East, 
362;  Crosby  v.  Morton,  13  La.  357;  Duuu  v.  O'Keefe,  5  M.  &  S.  282; 
Smith  r.  Roach,  7  B.  Mou.  17;  Walker  r.  Stetson,  19  Ohio  St.  400;  Car- 
michael  v.  Bank  of  Pennsylvania,  4  How.  (Miss.)  5G7;  Glasgow  v.  Cope- 
land,  8  Mo.  208;  Richardson  v.  Daniels,  5  U.  C.  Q.  B.  671.  In  Philpott 
V.  Bryant,  3  C.  &  P.  244.  Park,  J.,  said:  ••  I  sliould  destroy  lialf  the  trade 
of  the  city  of  London,  if  I  were  to  hold  that  bills  made  payable  so  many 

344 


CH.  XI. j        ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  §    212 

is  advisable  to  present  all  such  bills  for  acceptance  within 
a  reasonable  time  after  they  are  negotiated,  in  order  that 
it  may  be  known  at  an  early  date  whether  they  will  be  hon- 
ored. And  if  acceptance  is  refused,  the  refusal  will  be  as 
much  of  a  dishonor  of  the  bill  as  if  presentment  for  accept- 
ance had  been  necessary  as  well  as  permissible  ;  and  the 
holder  must  protest  and  give  the  same  notice,  as  is  required 
in  the  other  cases. ^ 

When  bills  are  payable  at  sight  or  so  many  days  after  sight 
or  after  demand,  or  after  any  other  uncertain  event  — 
•wherever  the  presentment  for  acceptance  is  necessary  to 
fix  the  day  of  maturity  in  order  to  hold  the  drawer,  in- 
dorsers,  and  all  other  parties  to  the  bill,  — they  must  be  pre- 
sented for  acceptance  without  unreasonable  delay. ^ 

§  212.  Presentment  by  whom  and  to  whom. — Pre- 
sentment should  be  made  by  the  rightful  holder,  or  by  his  law- 
fully authorized  agent.  Possession  is  presumptive  evidence 
of  title,  and  sufiicient  to  enable  the  holder  to  make  a  good 
presentment;  ^  and  if  it  should  happen  that  the  presentment 
was  not  made  by  the  rightful  owner,  it  would  not  affect 
the  value  of  the  presentment.  The  acceptance  or  protest 
and  notice,  in   consequence   of  refusal   to  accept,  as   the 

days  after  date  must  be  presented  for  acceptance."     But  see  Burnett  v. 
Tidmarsh,  5  Bradw.  341, 

1  United  States  v.  Barker,  4  Wash.  C.  C.  464;  Landrum  v.  Trowbridge, 
2  Met.  281;  Allen  v.  Suydam,  20  Wend.  321;  Glasgow  v.  Copelaud,  8  Mo. 
268. 

Coxv.  National  Bank,  100  U.  S.  704;  Mitchell  v.  Degraud,  1  Mason, 
176;  Wallaces.  Agry,  4  Mason,  336;  5  Mason,  115;  Mielman  v.  D'Eguino, 
2  H.  Bl.  505;  Robinson  v.  Ames,  20  Johns.  146;  Allen  v.  Suydam,  20 
Wend.  321;  s.  c.  17  Wend.  368;  Aymar  v.  Beers,  7  Cow.  705;  Fernandez, 
V.  Lewis,  1  McCord,  321;  Craig  v.  Price,  23  Ark.  633;  Dumont  v.  Pope, 
TBlackf.  367;  Eltiug  v.  Briukerliofe,  2  Hall,  459;  Holmes  v.  Kerrisou,  2 
Taunt.  323;  Mullick  v.  Radakissen,  9  Moore  P.  C.  46;  Dixon  v.  Mutall,  I 
C.  M.  &  R.  307;  Thorpe  v.  Booth,  R.  &  M.  389. 

^  Freeman  v.  Boynton,  7  Mass.  483;  Bank  of  Utica  v.  Smith,  18  Johns. 
230;  Aguew  v.  Bank  of  Gettysburg,  2  liar.  &  Gill.  478. 


§    212  ACCEPTANCE    OF    BILLS    OF    EXCHANGE.        [cil.   XI. 

ca.so  iiiiojht  be,  would  inure  to  the  benefit  of  the  riirhtful 
holder.^ 

Whore  presentment  is  made  by  an  agent,  it  must  be  done 
during  the  life-time  of  the  principal.  The  death  of  the 
principal  revokes  the  authority  in  this  case,  as  in  any  other. ^ 
In  some  of  the  States  it  is  provided  by  statute  that  the  no- 
tary public  shall  have  the  power  to  make  presentment  to 
all  persons  concerned.^ 

The  presentment  must  of  course  be  made  to  the  drawee  or 
to  some  one  who  is  authorized  to  act  for  him.  If  a  bill  is 
drawn  upon  a  firm,  it  need  not  be  presented  to  more  than 
one  member  of  the  firm,  as  his  acceptance  or  refusal  binds 
the  firm.*  But  if  the  drawees  are  not  partners,  the  bill 
must  be  presented  to  all,  in  order  to  bind  all.^  The  holder 
is  not  obliged  to  take  the  acceptance  of  one  alone,  and  if 
he  does,  it  would  be  at  his  own  risk,  unless  the  bill  was 
protested  for  the  failure  to  procure  the  other  acceptance.® 
In  some  of  the  States  it  is  provided  by  statute  that  if  one 
of  two  or  more  joint  drawees  refuses  to  accept,  the  holder 
need  not  present  the  bill  to  the  others,  but  may  at  once 
protest  it  as  to  all  the  drawees.^ 

If  the  drawee  cannot  be  found  and  it  becomes  necessary 
to  present  the  bill  to  an  agent,  the  holder  must  be  careful 

'  Chitty  on  Bills,  311;   1  Dcaniol,  §  455. 

2  Gale  V.  Tappaii,  12  N,  H.  145. 

3  Such  a  statute  is  to  be  found  in  Maine,  Michigan,  West  Virginia, 
Wisconsin,  Wyoming.  And  in  other  States  it  is  held  that  the  present- 
ment may  be  made  by  the  notary's  clerk.  Schuchardt  v.  Hall,  36  Md. 
59;  Leev.  Bedford,  4  Met.  (Ky.)  7. 

*  Greatlake  v.  Brown,  2  Cranch  C.  C.  541;  Holtz  v.  Bopple,  37  N.  Y. 
634;  Gates  v.  Beecher,  60  N.  Y.  523;  Pleasant  Branch  Bank  v.  McLaran,^ 
30  Iowa,  306. 

*  Union  Bank  v.  Willis,  8  Met.  504;  Willis  v.  Green,  5  Hill,  232;  Gates- 
V.  Beecher,  60  N.  Y.  523;  Arnold  v.  Dresser,  8  Allen,  435. 

6  See  Story  on  Bills,  §  229;  Harris  u.  Clark,  10  Ohio,  5;  Greenough  v- 
Smead,  3  Ohio  St.  415. 

^  In  California,  Dakota,  and  Utah. 
34() 


CH.  XI.]         ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  §    212 

that  he  selects  an  agent  who  is  authorized  to  accept  for  the 
drawee.  An  acceptance  by  an  unauthorized  agent  does  not 
bind  the  drawee.^  In  some  of  the  States,  it  is  provided  by 
statute  that  in  the  absence  of  the  drawee,  presentment  may 
be  made  to  any  one  having  charge  of  the  place  of  business 
or  residence  of  the  drawee.^ 

It  is  claimed  by  several  of  the  authorities  that  if  the 
drawee  be  dead,  the  holder  must  present  the  bill  to  his  per- 
sonal representatives  for  acceptance'before  protesting  it  for 
non-acceptance.^  But,  in  consequence  of  the  fact  that  any 
acceptance  by  a  personal  representative,  in  his  representa- 
tive capacity,  must  be  conditional  upon  his  possession  of 
funds  of  the  deceased  drawee,  it  is  held  by  other  authori- 
ties, with  much  show  of  reason,  that  the  holder  is  not 
obliged  to  present  the  bill  to  the  personal  representatives, 
but  he  may  protest  the  bill  at  once  and  look  to  the  drawer 
and  indorsers.*     Where  a  bill  is  drawn  on  a  firm,  and  one 

1  Cheek  v.  Roper,  5  Esp.  175.  Aud  it  is  incurabeut  on  tlie  plaintiff  to 
prove  that  the  agent  was  authorized  to  accept  or  refuse  acceptance.  Nel- 
son t?.  Fotterall,  7  Leigh,  180;  Stainback  v.  Bank  of  Va.,  11  Gratt.  260. 

2  See  California,  Dakota  and  Utah. 

3  "If  on  presentment  it  appear  that  the  drawee  is  dead',  the  holder 
should  inquire  after  his  personal  representative,  and,  if  he  live  within 
a  reasonable  distance,  should  present  the  bill  to  hiin."  Chitty  on  Bills 
(13th  Am.  ed.),  [*280]  318;   Story  on  Bills,  §  236. 

*  "  Upon  principle  it  is  not  easy  to  see  upon  what  ground  the  holder 
is  bound  to  present  a  bill  drawn  upon  the  deceased  to  his  executor  or 
administrator  for  acceptance.  An  acceptance  by  the  representative, 
binding  himself  personally,  is  not  according  to  the  tenor  of  the  bill ;  nei- 
ther is  an  acceptance  qualified  so  as  to  render  him  responsible  to  pay  out 
of  the  assets  that  may  come  into  his  hands."  Edwards  on  Bills,  401. 
In  Thompson  on  Bills,  p.  282,  "  it  has  been  said  that  if  the  drawee  is 
dead  the  holder  should  present  it  to  his  nearest  heirs,  and  protest  it  on 
their  refusal  to  accept,  though  they  have  not  yet  taken  up  his  succession. 
This  should  certainly  be  done  where  the  drawee's  heirs  have  taken  up 
the  succession.  But  otherwise,  there  is  no  person  representing  him,  as 
to  the  bill,  and  the  presentment  of  it  then  appears  as  futile  as  if  made  to 
a  stranger.  In  such  a  case,  it  seems  necessary  that  a  holder  should, 
within  a  reasonable  time,  notify  to  the  other  parties  the  drawee's  death, 
by  which  presentment  has  become  impossible." 

347 


§    213  ACCEPTANCE    OF    BILLS    OF    EXCHANGE.         [CH.  XI. 

of  the  partners  is  dead,  and  the  partnership  dissolved  in 
censequence,  the  presentment  for  acceptance  should'  be 
made  to  the  surviving  partner  or  partners.^ 

§  213.  Presentment  —  At  what  place.  —  In  all  cases, 
the  bill  should  be  presented  at  the  drawee's  domicile,  it 
matters  not  w-here  it  is  made  payable.^  It  may  be  pre- 
sented for  acceptance  either  at  the  drawee's  residence  or 
place  of  business,  according  to  the  convenience  of  the 
holder,  and  this  rule  is  recognized,  even  where  the  place  of 
business  is  in  one  place  and  the  residence  is  another.'  But 
this  would  seem  to  be  a  very  unreasonable  rule,  particularly 
in  the  light  of  the  further  requirement  that  the  presentment 
should  be  made  during  business  hours.*  If  a  man  has  a 
place  of  business  he  may  be  expected  to  be  there  during 
business  hours,  and  it  is  not  reasonable  for  a  holder  to  take 
the  bill  to  his  residence.  If,  as  a  fact,  the  drawee  is  found 
at  his  residence  it  will  be  a  good  presentment,  as  it  will  be 
wherever  the  drawee  is  found.  But  if  the  drawee  is  not 
found  at  his  residence,  it  could  not  be  a  good  presentment, 
.since  the  holder  as  a  rational  man  must  know  that  the 
drawee  can  be  found  at  his  place  of  business.  The  fact 
that  there  are  no  cases  cited  to  the  point  confirms  me  in  my 
opinion  that  the  practice  of  the  commercial  world  is  against 
the  correctness  of  this  rule.  No  one,  at  all  acquainted 
with  the  customs  of  commercial  intercourse,  ever  takes  a 
bill  for  acceptance  to  the  drawee's  residence,  unless  he 
learns  of  his  absence  from  his  place  of  business  or  unless 
the  drawee  has  no  place  of  business. 

If  the  drawee  has  changed  his  residence  or  place  of  busi- 

1  See  Cayuga  County  Bank  v.  Hunt,  2  Hill,  635. 

2  Chitty  on  Bills,  316;  1  Daniel's  Negot.  Iust.,§  460;  Mason  r.  Franklin, 
B  Johns.  202;  Boot  v.  Franklin,  3  Johns.  207. 

s  Story  on  Bills,  §  236:  Chitty,  316;  1  Daniel,  §  461. 
*  See  post,  §  214. 
348 


CH.  XI.]        ACCEPTANCE   OF   BILLS    OF   EXCHANGE.  §    214 

ness,  the  holder  must  exercise  clue  diligence  in  searching 
for  the  drawee's  new  abode;  and  when  he  discovers  it,  the 
bill  should  be  presented  there. ^  If  the  drawee's  residence 
or  place  of  business  cannot  be  ascertained  after  diligent 
inquiry,  then  the  bill  may  be  treated  as  dishonored,  and 
protested  for  non-acceptance.^  What  is  due  diligence  is  a 
question  of  fact  for  the  jury.^ 

§   214.    Time    of      day     for    presentment  —  Business 

hours.  — If  a  bill  is  to  be  presented  at  the  drawee's  place 
of  business,  it  should  be  presented  during  the  customary 
hours  of  business.  What  are  business  hours  will  depend 
upon  the  custom  of  the  place  and  of  each  particular 
business.*  It  does  not  matter  at  what  hour  the  present- 
ment is  made,  if  the  drawee  or  his  authorized  agent 
is  found,  and  a  reply  made  by  him  to  the  presentment. 
But  the  bill  cannot  be  protested  on  a  presentment  at  an  un- 
reasonable hour,  if  the  right  person  is  not  found,  to  whom 

^  Bateman  v.  Joseph,  12  East,  433;  Freeman  v.  Boyton,  7  Mass.  483; 
Andersons.  Drake, 44  Johns.  114;  Collins w.  Butler,  2  Stra.  1087;  Brown- 
ing n  Kinear,  1  Gow.  81;  Beveridge  v.  Burgis,  3  Campb.  262;  Hiue  v. 
Alley,  4  B.  &  Ad.  624. 

2  Chitty  on  Bills,  317;  1  Daniel's  Neg.  Inst.  429;  Anon.,  1  Ld.  Kaym. 
743;  Union  Bank  v.  Fowlkes,  2  Sueed,  555;  Ratcliff  v.  Planters'  Bank,  2 
Sneed,  425;  Wolfe  v.  Jewett,  10  La.  383.  So  also  may  one  treat  the  bill 
as  dishonored,  if  the  ascertained  place  of  residence  or  business  is  closed 
and  no  one  can  be  found  to  accept.  Hine  v.  Alley,  4  B.  &  Ad.  624;  1  N.  & 
M.  433. 

3  Collins  V.  Butler,  2  Stra.  1087;  Bateraan  tJ.  Joseph,  12  East,  433; 
Smith  V.  Bank  of  New  South  Wales,  L.  R.  41 ;  L.  J.  P.  C.  26.  It  is  suffi- 
cient diligence  if  the  bill  is  presented  at  the  drawee's  last  place  of  resi- 
dence, and  is  informed  by  one  occupying  it,  or  in  possession,  that  the 
drawee  had  moved.  Buckstone  v.  Jones,  1  Scott  N.  R.  19.  But  if  there 
is  an  agent  at  the  place,  who  is  authorized  to  accept  bills  for  the  drawee, 
it  should  be  presented  to  the  agent.     Phillips  v.  Astliug,  2  Taunt.  206. 

*  Chitty  on  Bills,  316;  1  Daniel's  Negot.  Inst.,  §  464a,-  Parsons'  N.  & 
B.  346,  Elford  v.  Teel,  1  M.  &  S.  28,  6  M.  &  S.  44;  Parker  v.  Gordon,  7 
East,  385;  s.  c.  6  Esp.  41;  Leftley  v.  Bailey,  4  T.  R.  170;  Nelson  v.  Fot- 
terall,  7  Leigh,  179;  Cayuga  Co.  Bank  v.  Hunt,  2  Hill,  635. 

349 


§    21.')  ACCEPTANCK    OF    BILLS    OF    KXCHANGE.        [ciI.  XI. 

preseutment  cunbe  mude.^  If  the  bill  is  to  be  presented 
at  the  drawee's  residence,  any  hour  before  the  customary 
time  of  retiriuo;  will  be  sufficient.'^ 

§  21  ").  Presentment —  Within  what  time,  —  If  the  bill 
is  payable  on  demand,  at  a  tixed  })eriod  after  date,  or  on 
a  certain  day  named,  as  we  have  seen  already^  there  is  no 
need  of  presentment  for  acceptance,  in  order  to  hold  the 
drawer  and  indorsers,  before  the  day  of  payment ;  when  the 
presentment  for  acceptance  merges  into  the  presentment 
for  payment.*  But  this  rule  is  subject  to  two  exceptions, 
viz, :  when  the  drawer  expressly  provides  for  an  immediate 
presentment  for  acceptance,  and  in  any  case  where  such  a  bill 
is  given  to  an  agent  to  be  presented  for  acceptance.  Al- 
though the  principal  who  holds  the  bill  is  not  obliged  to 
present  it  for  acceptance  before  maturity,  the  authorities 
curiously  hold  that  if  it  is  given  to  an  agent  to  present,  he 
is  liable  in  damages  to  the  holder,  if  he  does  not  present  it 
immediately  or  within  a  reasonable  time."  But  this  view  is 
combated  by  Prof .  Parsons,  and  it  does  seem,  notwithstand- 
ing the  weight  of  authority  is  to  the  contrary,  that  there 
can  be  no  reason  for  requiring  an  agent  to  present  such 
a  bill  sooner  than  the  law  of  commercial  paper  requires 
the  principal  to  present  it,  unless  the  holder  instructed 
his  agent  to  present  it    immediately.^     Perhaps  the  only 

1  Story  ou  Bills,  §  237;  Chitty  on  Bills,  318;  Garrett  v.  Woodcock,  1 
Stark,  475;  G  M.  &  S.  44;  Heury  v,  Lee,  2  Chit,  124.  There  are  statutes 
to  this  effect  in  California,  Dakota  and  Utah. 

2  See  Dana  v.  Sawyer,  22  Me,  244, 

3  See  ante,  §  211. 

*  Goupy  V.  Harden,  7  Taunt,  159;  Townsley  v.  Sumrall,  2  Pet.  178; 
Bachellor  v.  Priest,  12  Pick.  399;  Allen  v.  Suydain,  17  Wend.  368;  20 
Wend.  321. 

5  Allen  V.  Suydam,  17  Wend.  308;  s.  c.  20  Wend.  321;  Van  Wart  v. 
Wooley,  3  B.  &  C.  439;  5  Dow.  &  R.  374;  Bank  of  Scotland  v.  Hamilton, 
1  Bell's  Commentaries,  409;  Thompson  ou  Bills,  277. 

6  In  referring  to   the  case  of  Allen  v.    Suydam,    17   Weud.   368;  20 

350 


CH.  XI.]         ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  §    215 

plausible  reason  thiit  may  be  given  in  support  of  this 
rulius:  of  the  authorities,  is  that  si-nce  it  is  more  or  less 
customary,  although  not  necessary,  for  holders  of  bills 
payable  at  a  certain  time  after  date  to  present  them  for 
acceptance  within  a  reasonable  time,  an  agent  may  be 
said  to  have  implied  instructions  to  present  for  acceptance 
within  a  reasonable  time  all  bills  which  are  intrusted  to 
him. 

If  the  bills  are  payable  at  sight,  or  so  many  days  after 
sight  or  after  demand,  then  the  presentment  for  acceptance 
is  needed  in  order  to  determine  the  day  of  payment,  and 
must  therefore  be  made  immediately  or  within  a  reasonable 
time.^     And  if  the  bill  is  not  presented  within  a  reasonable 

"Wend.  321,  Prof.  Parsons  says  (1  Parsons  346,  n.)  :  "The  justice  of 
this  case,  at  least,  is  very  doubtful.  It  will  be  seen  that  the  bill,  being 
payable  at  a  certain  time  after  date,  need  not  have  been  presented  for 
acceptance  by  the  holder  at  all,  but  the  agent  presented  it  nine  days  be- 
fore maturity,  after  liaving  kept  it  in  his  bauds  seventeen  days.  He  had 
no  instructions  from  the  principal  to  present  it  immediately,  and  it  is 
very  difficult  to  see  why  the  agent  wivs  required  to  do  more  than  the 
principal  was  bouud  to  do.  It  also  appeared  in  the  case,  that  the  late- 
ness of  presentment  had  nothing  whatever  to  do  with  the  refusal,  and 
that,  if  the  agent  had  presented  the  very  day  he  received  it,  it  would  not 
have  been  accepted,  nor  was  there  any  time  between  the  date  of  the  bill 
and  its  maturity  when  the  drawees  would  have  accepted;  why  then  must 
iin  agent  be  required  to  make  an  utterly  useless  presentment,  when  any 
liolder,  in  the  exercise  of  reasonable  diligence,  would  not  be  required  to 
present,  even  if  there  was  a  fair  prospect  of  acceptance?  Tlie  reasons 
given  are  not  satisfactory.  The  opinions  of  various  writers  are  cited 
and  the  reasons,  so  far  as  they  can  be  collected,  are  that  the  holder  has  an 
interest  in  having  the  bill  accepted  as  soon  as  possible,  and  therefore 
his   agent  is  bouud  to  present  immediately." 

1  Mullick  r.  Radakisseu,  9  Moore  P.  C.  6G;  28  Eng.  L.  &  Eq.  86;  "Wal- 
lace V.  Agry,  4  Mason,  336;  Bridgeport  Bank  v.  Dyer,  19  (-onn.  136; 
Chambers  v.  Hill,  26  Tex.  472;  English  v.  Board  of  Trustees,  6  Ind.  437; 
Phoenix  Ins.  Co.  v.  Allen,  11  Mich.  501;  Bolton  v.  Harrod,  9  Mart.  326; 
Eichardsou  r.  Fenner,  10  La.  Ann.  599;  Fieldr.  Nickerson,  13  Mass.  131; 
Prescott  Bank  v.  Caverly,  7  Gray,  217  ;  Muilman  v.  D'Eguino,  2  H.  Bl.  569; 
Straker  v.  Graham,  4  M.  &  "W.  721 ;  Fry  v.  Hill,  7  Taunt.  397;  Aymar  v. 
Beers,  7  Cow.  705-  Robinson  v.  Ames,  20  Johns.  146;  Gowan  v.  Johnson, 

351 


§     21()  ACCEPTANCE    OF    BILLS    OF    EXCHANGE.         [CH.  XI. 

time,  the  drawer  and  iiidorsers  are  discharged,  although 
there  may  be  no  actual  damage  resulting  from  the  delay. ^ 

§  216.  What  is  a  reasonable  time  for  presentment. — 

It  is  difficult  to  lay  down  any  general  rule  whereby  to  de- 
termine what  is  a  reasonable  time  in  which  to  make  pre- 
sentment, for  each  case  must  be  settled  on  its  own  facts. 
The  only  rule  that  can  be  given  is,  that  the  holder  is  re- 
quired to  present  the  bill  for  acceptance  with  what  will  be, 
in  the  light  of  the  circumstances  of  the  case  in  question, 
due  diligence.^  AVhen  the  factg  are  plain  and  simple,  it 
may  be  said  that  what  is  a  reasonable  time  is  a  question  of 
law  for  the  court ;  but  that  it  is  a  question  of  fact  for  the 
jury,  whenever  the  case  is  complicated  by  circumstances 
which  render  the  question  doubtful.' 

29  Johns.  176;  Fernandez  v.  Lewis,  1  McCord,  321;  Jordan  v.  Wheeler,  20 
Tex.  698;  Nichols  v.  Blackmore,  27  Tex.  586;  Knott  v.  Venable,  42  Ala. 
186. 

1  Mullick  V.  Radakissen,  9  Moore  P.  C.  GiJ;  2S  Eng.  L.  &  Eq.  86;  Car- 
ters. Flower,  16  M.  &  W.  743. 

'■^  Goupy  V.  Harden,  7  Taunt.  159.  It  is  not  necessary  that  the  holder 
make  use  of  the  first  opportunity  to  present  it.  Muilmau  v.  D'Eguiuo,  2 
II.  Bl.  505;  Prescott  Bank  v.  Caverly,  7  Gray,  217. 

3  "  Ordinarily,  the  question  whether  a  presentment  was  within  a  rea- 
sonable time,  Is  a  mixed  question  of  law  and  fact,  to  be  decided  by  the 
jury,  under  proper  instructions  from  the  court.  And  it  may  vary  very 
much  according  to  the  particular  circumstances  of  each  case.  If  tlie 
facts  are  doubtful  or  in  dispute,  it  is  the  clear  duty  of  the  court  to  sub- 
rait  them  to  the  jury.  But  when  they  are  clear  and  uncontradicted,  then 
it  is  competent  for  the  court  to  determine  whether  the  time  required  hy 
law  for  the  presoutraent  has  been  exceeded  or  not."  Bigelow,  J.,  in 
Prescott  Bank  v.  Caverly,  7  Gray,  217.  See  also  to  same  effect  1  Parsons' 
N.  &  B.  340;  Wallace  v.  Agry,  4  Mason,  336;  Goupy  v.  Harden,  7  Taunt. 
159 ;  Fry  r.  Hill,  7  Taunt.  397;  Muilraan  v.  D'Eguino,  2  II.  Bl.  565;  Straker 
V.  Graham,  4  M.  &  W.  721;  Shutz  v.  Robins,  3  C.  &  P.  80;  Mullick  v. 
Radakissen,  28  Eng.  L.  &  Eq.  86;  Fernandez  v.  Lewis,  1  McCord,  322; 
Chambers  v.  Hill,  26  Tex.  472;  Nichols  v.  Blackmore,  27  Tex.  586;  Lock- 
wood  V.  Crawford,  18  Conn.  361 ;  Richardson  r.  Tenner,  10  La.  Ann.  599; 
Mellish  V.  Rawdou,  9  Bing.  416;  Knott  r.  Venable,  42  Ala.  186;  Walsh 
V.  Dart,  23  Wis.  3:'.4 ;  Salisbury  v.  Renick,  44  Mo.  551 ;  Mohawk  Bank  0. 

352 


CH.  XI.]        ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  §    216 

The  question  of  reasonable  time  may  be  affected  by  the 
facihty  of  communication  between  the  domiciles  of  the 
holder  and  the  drawee.  If  there  is  regular  communication 
at  short  intervals,  and  the  distance  is  not  great,  it  would 
take  less  delay  to  be  unreasonable  than  if  the  communica- 
tion was  irregular,  at  long  intervals,  and  the  places  were 
far  apart. ^  So,  also,  the  unsalability  of  exchange  on  the 
place  of  abode  of  the  drawee  is  a  controlling  circumstance, 
justifying  sometimes  a  long  delay  in  presentment  for  ac- 
ceptance.'^ Other  circumstances,  such  as  the  delay  in  the 
transportation    of   the    mail,^  sickness,*  war   between  the 

Broderick,  10  Weud.  304;  Aymar  v.  Beers,  7  Cow.  705;  Vautrotw.  Mc- 
Culloch,  2  Hilt.  272;  Muucy  School  Board  v.  Commonwealth,  84  Pa.  St. 
464.  The  Supreme  Court  of  Michigan  expressed  itself  as  follows: 
"  Where  the  law  has  adopted  no  rule  as  to  time  of  presentment  except 
that  it  should  be  in  a  reasonable  time,  as  in  the  case  of  bills  payable  at 
sight,  the  court  cannot,  without  overlooking  objects  for  which  such  pre- 
sentment and  notice  of  non-payment  are  required,  say  as  a  matter  of  law 
that  any  delay  is  reasonable  beyond  that  which  may  be  fairly  required  in 
the  ordinary  course  of  business  without  special  inconvenience  to  the 
holder,  or  by  the  special  circumstances  of  the  particular  case."  Phoenix 
Ins.  Co.  V.  Allen,  11  Mich.  501;  13  Mich.  191. 

1  Straker  v.  Graham,  5  M.  &  W.  721;  Shute  v.  Robins,  Moody  &  M. 
133;  3C.&P.  80;  Mullicky.  Radakissen,  9  MooreC.  P.  6G;  28Eng.  L.&Eq. 
86;  Dumout  ■;;.  Pope,  7  Blackf.  3G7;   Nicliols  v.  Blackraore,  27  Tex.  586. 

2  In  MuUick  v.  Radakissen,  9  Moore  P.  C.  6G;  28  Eug.  L.  &  Eq.  86,  a 
bill  drawn  in  Calcutta  on  Hong  Kong  at  sixty  days  was  kept  by  an  in- 
dorsee for  five  mouths.  In  pronouncing  tlae  delay  to  be  reasonable 
under  the  circumstances,  Parke,  B.,  said :  "The  evidence  proved  that,  for 
the  whole  of  the  time,  a  period  of  more  than  five  months,  bills  on  China 
were  altogether  unsalable  to  Calcutta ;  that  such  was  the  regular  and 
permanent  state  of  the  market;  and  tliat  although,  if  there  was  a  reason- 
able prospect  of  the  state  of  things  being  better  in  a  short  time,  the 
holder  would  have  had  the  right,  i\ith  a  view  to  his  own  interests,  to 
keep  the  bill  for  some  time,  he  had  no  sucli  right  where  there  was  no 
hope  of  the  amendment  of  that  state  of  things."  See  also  Mellish  ?;. 
Rawdon,  9  Bing.  416;  2  Moore  &  S.  500;  Wallace  v.  Agi-y,  4  Mason,  336. 

3  Walsh  V.  Blatchley,  6  Wis.  422.  But  see  Walsh  v.  Dart,  23  Wis. 
334.  Sending  the  bill  to  the  wrong  place  through  the  mistake  of  the 
holder  is  no  excuse  for  delay.     Schofleld  v.  Bayard,  3  Wend.  488. 

*  Aymar  v.  Beers,  7  Cow.  705. 

23  353 


§    21(5  ACCEPTANCK    OF    BILLS    OF    i:XCIIANGE.        [CII.   XI. 

countries  of  the  holder  and  the  drawee,^  and  other  circum- 
stances beyond  the  control  of  the  holder,^  have  been  held  to 
warrant  delay  in  the  presentment  for  acceptance. 

It  is  not  necessary  for  the  bill  to  be  sent  directly  to  the 
drawee.  Bills  of  exchange  are  intended  to  circulate  as, 
and  in  the  place  of,  currency  ;  and  as  long  as  it  is  not  sent 
to  some  place  outside  of  the  ordinary  channels  of  commerce, 
it  may  be  indorsed  by  one  person  to  another,  and  sent 
from  one  i)lace  to  another,  before  it  is  presented  to  the 
drawee   for  acceptance.^     It  is  certain  that  if  the  holder 

1  United  States  v.  Barker,  1  Paine  C.  C.  156. 

2  But  see  Barker  v.  Parker,  G  Pick.  80,  -where  it  was  held  that  a  severe 
rain  is  no  excuse  for  delay  in  presentiuent.  But  I  appreliend  tliat  if  the 
storm  was  so  violent  as'to  render  it  dangerous  to  brave  the  elements, 
the  courts  would  in  these  days  of  luxury  declare  it  to  be  a  sufficient  rea- 
son for  delay. 

3  In  Wallace  v.  Agry,  4  Mason,  333,  Story,  .7.,  said:  "  It  has  been  said 
that  the  plaintiff  was  bound  to  send  it  (the  bill) ,  directly  from  Havana 
to  England  by  some  regular  conveyance,  and  had  no  right  to  remit  it  to 
Boston  for  sale.  I  am  of  a  different  opinion.  The  party  who  receives  a 
negotiable  bill  payable  after  sight  has  a  riglit  to  sell  it  in  the  market 
where  he  resides,  or  to  send  it  to  any  other  place  for  sale.  He  is  not 
bound  personally  to  make  a  remittance  of  it,  or  to  send  it  directly  to  the 
country  ou  which  it  is  drawn.  He  is  at  full  liberty  to  put  it  in  circula- 
tion, or  to  send  it  to  any  other  place  for  sale  or  remittance ;  and  the  only 
limitation  upon  this  right  is,  that  he  shall  have  it  presented  within  a  rea- 
sonable time,  be  the  conveyance  direct  or  indirect.  To  be  sure,  the 
usage  of  trade  is  to  be  consulted  on  this  as  on  other  occasions.  The 
holder  of  such  a  bill  is  not  at  liberty  to  send  it  to  remote  places,  wholly 
out  of  the  course  of  trade,  if  there  be  unreasonable  delay  thereby  m  the 
presentment  for  acceptance;  and  thus  to  fix  the  drawer  with  an  indefi- 
nite responsibility.  But,  ou  the  other  hand,  the  transmission  in  a  direct 
trade  is  not  necessary.  No  one  can  doul)t  that,  by  the  course  of  trade, 
many  bills  of  exchange  drawn  in  Havana  ou  England  are  sent  to  the 
United  States  for  remittance  or  sale.  The  very  testimony  in  this  case 
establishes  this  fact.  It  would  be  a  most  inconvenient  rule  to  hold  that 
such  a  negotiation  of  bills  was  at  the  sole  peril  of  the  holder.  I  know  of 
no  rule  of  law  reaching  to  this  extent."  "Bills,  both  inland  and  foreign, 
having  the  quality  of  negotiability,  are  intended,  in  some  degree,  to  be 
used  as  a  part  of  the  circulation  of  the  country,  and  arc  indisdcnsable 
iu  the  conduct, of  extended  commercial  transactions.     They  afford  a  safe 

:554 


CH.  XI.]        ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  §    216 

retains  possession  of  the  bill  without  presentment  for  ac- 
ceptance for  as  long  a  time  as  is  consumed  in  its  circulation 
from  hand  to  hand,  and  from  place  to  place,  the  delay  will 
be  held  to  be  unreasonable,  although  it  may  be  considered 
reasonable,  if  the  bill  had  been  circulated.^  But  the  bill 
cannot  circulate  indefinitely  without  presentment  to  the 
drawee.  The  circulation  of  the  bill  only  extends  the  time, 
which  will  be  considered  reasonable.  Here  again,  we  find 
the  question  of  reasonable  time  dependent  upon  the  cus- 
toms of  trade  and  the  facts  of  each  case.  In  the  note 
below,  the  authorities  are  given  with  sufficient  illustrations.^ 

and  convenient  mode  of  making  payments  of  indebtedness  between  dis- 
tant points.  Banking  liouses  that  for  a  consideration  issue  such  bills, 
must  be  understood  to  do  so  in  accordance  with  the  known  custom  of 
the  country  —  that  they  will  be  put  in  circulation  for  a  limited  period. 
If  this  were  not  so,  their  value  would  be  greatly  depreciated,  and  their 
utility  in  commercial  transactions  would  be  destroyed."  Scott,  J.,  i 
Montelius  v.  Charles,  7(3  111.  305.  See  also  Shute  v.  Eobins,  3  C.  &  P. 
80;  Mailman  v.  D'Eguino,  2  H.  Bl.  565;  Melli&h  v.  Rawdou,  9  Bing.416; 
2  M.  &  S.  570;  Nichols  v.  Blackmore,  27  Tex.  586;  Jordan  v.  "Wheeler,  20 
Tex.  698;  Richardson  v.  Fenner,  10  La.  Ann.  599;  Bolton  ».  Harrod,  9 
Mart.  326. 

1  See  Muilman  v.  D'Eguino,  2  H.  Bl.  565;  Fry  v.  Hill,  7  Taunt.  397; 
Robinson  v.  Ames,  20  Johns.  146;  Gowan  v.  Jackson,  20  Johns.  176. 

2  In  the  following  cases,  the  delays  were  held  to  be  reasonable :  four 
days,  drawn  in  country  on  London,  Shute  v.  Robins,  3  C.  &  P.  80;  bill 
drawn  in  Erie,  N.  Y.,  on  New  York  City,  delay  eleven  days;  National  New- 
ark Bkg.  Co.  V.  2nd  Nat.  Bank,  G3  Pa.  St.  404;  drawn  in  New  Orleans 
on  Liverpool,  ten  weeks,  Bolton  v.  Harrod,  9  Mart.  326;  drawn  in  Dakota 
on  Chicago,  thirty-five  days,  Montelius  v.  Charles,  76  111.  303;  drawn  in 
Toronto  on  New  York,  three  months,  Boyes  u.  Joseph,  7  U.  C.  Q.  B.  505; 
drawn  in  West  Indies  on  London,  six  months,  Gowan  v.  Jackson,  20 
Johns.  176;  drawn  in  Island  of  Jersey  on  London,  thirty-seven  days, 
Godfrey  v.  Coulman,  13  Moore  P.  C.  11 ;  drawn  at  Rio  Janeiro  on  Lou- 
don, five  months,  Mellish  v.  Rawdou,  9  Bing.  416;  drawn  in  London  on 
Calcutta,  seventy-eight  days,  Muilman  v.  D'Eguino,  2  H.  Bl.  565;  drawn 
in  Loudon  on  Lisbon,  thre3  months  and  ten  days,  Goupy  v.  Harden,  7 
Taunt.  397;  drawn  in  Augusta,  Ga.,  on  New  York,  two  months  and  a 
half,  Robinson  v.  Ames,  20  Johns.  176;  drawn  in  Windsor  on  Loudon, 
four  days,  Fry  v.  Hill,  7  Taunt.  397.  On  the  other  hand,  it  was  held  to 
be  unreasonable  delay  of  preseutment  for  acceptance,  where  the  bill  was 

355 


§    217  ACCEPTANCi:    OF    lilLLS    OF    EXCHANGE.        [CM.   XI. 

§  217.  Form  and  manner  of  presentment  for  accept- 
ance.—  It  is  certainly  necessary  for  tiie  holder  to  have  the 
bill  in  his  potential,  if  not  actual,  possession,  when  he 
makes  presentment  for  acceptance  ;  and  itis  sometimes  hekl 
that  there  is  no  presentment,  unless  the  holder  has  the  bill 
with  him,  and  exhibits  it  to  the  drawee.^  But  it  cannot  be 
said  that  it  is  absolutely  necessary  to  show  the  bill  to  the 
drawee,  if  he  is  satisfied  with  a  verbal  description  of  it, 
and  gives  an  answer  to  the  request  for  acceptance.^  It  is 
only  necessary  when  the  drawee  insists  upon  the  produc- 
tion of  the  bill.  It  is  then  necessary  that  it  be  handed  to 
the  drawee  for  his  examination.^  The  drawee  is  entitled 
to  a  reasonable  time,  in  which  to  examine  into  his  accounts 
and  deliberate  over  the  question  of  accepting  the  bill.  In 
order  to  enable  him  to  make  this  examination,  the  custom- 
ary law  permits  him  to  take  the  bill  into  his  possession  for 
tweutv-four  hours  before  giving  his  answer.*     But  if  the 


drawn  in  Detroit,  on  Ciiicago,  twenty-oue  clay's  delay,  Phoenix  Ins.  Co. 
V.  Allen,  11  Mich.  30;  Phoenix  Ins.  Co.  v.  Gray,  13  Mich.  191;  drawn  in 
Wisconsin  on  New  York,  fourteen  days,  Walsh  v.  Dart,  23  Wis.  334; 
drawn  in  Ohio  on  New  York,  ten  days,  Vautrot  v.  McCulloch,  2  Hilt. 
272;  drawn  in  Charleston,  S.  C,  on  New  York,  two  mouths  and  a  half, 
Fernandez  v.  Lewis,  1  McCord,  322;  drawn  and  payable  In  same  State, 
forty-seven  days,  Nichols  v.  Blackraore,  27  Tex.  58(; ;  same,  thirty  days, 
Dumont  v.  Pope,  7  Blackf.  307;  drawn  in  St.  Louis  on  Chicago,  thirty 
days,  Olshausen  v.  Lewis,  1  Biss.  419. 

1  "The  term  prescutineut  imports  not  a  mere  notice  of  the  existence 
of  a  draft  which  tlie  party  has  in  his  possession,  but  the  exhibiting  of 
it  to  the  person  on  whom  it  is  drawn,  that  he  may  see  the  same,  and  ex- 
amine his  accounts  or  correspondence,  and  judge  what  he  shall  do; 
whether  he  shall  accept  the  draft  or  not."  Fall  Kiver  Union  Bank  r. 
Willard,5  Met.  216. 

"^  Fisher  v.  Beckwith,  19  Vt.  31 ;  Carmichael  r.  Bank  of  Pennsylvania, 
4  How.  (Mi.ss.)  5C7.     But  see  1  Parsons'  N.  &  B.  348. 

3  Fall  River  Union  Bank  v.  Willard,  5  Met.  21(] ;  1  Daniel,  §  403. 

*  Bellasis  v.   Hester,    1    Ld.   Raym.  280;   Ingram  v.  Forster,  2  J.  P. 

Smith,  242;    Montgomery  Co.  Bank  v.  Albany  City   Bank,  8  Barb.  399; 

Overmans.  Hoboken  City  Bank,  31  N.  J.   L.  5(53;    Connelly  v.  McKean, 

64  Pa.  St.   113;    Case   ??.  Burt,    15  Mich.  82;    1  Parsons' N.  &  B.  348;   1 

856 


Cir.  XI.]        ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  §    218 

■drawee  refuses  within  the  twenty-four  hours,  the  bill  should 
be  protested  immediately,'  and  if  the  drawee  fails  to  give 
answer  before  the  expiration  of  that  time,  the  protest  must 
be  made  as  soon  as  it  expires.^  In  many  of  the  States,  the 
time  during  which  the  bill  may  be  detained  by  the  drawee 
is  regulated  by  statute,  generally,  in  accordance  with  the 
customary  rule,  just  stated.'^ 

If  the  bill  has  two  or  more  parts,  either  part  may  be 
presented,  the  original  or  the  duplicate.*  But  the  drawee 
must  accept  only  one  of  the  parts.  If  he  should  write  his 
acceptance  across  the  face  of  more  than  one  part,  and  the 
accepted  parts  should  pass  into  the  hands  of  different  bona 
fide  holders,  the  acceptor  could  be  held  liable  on  all."'' 

In  any  case,  the  presentment  must  be  absolute  and  un- 
conditional. It  will  not  be  sufficient  presentment  if  the 
notary  in  presenting  it  takes  it  away  with  the  understand- 
ing that  he  is  to  return  with  it  the  next  day.^ 

§   218.  When  acceptance  may  be  dispensed  with.  — If 

the  drawee  is  directed  in  the  bill,  to  pay  it  "  without  ac- 
ceptance," or  the  bill  contains  a  clause  indicating  a  waiver 

Daniel's  Negot.  Inst.,  §  492.  It  is  however  held  that  the  time  for  de- 
liberation will  be  limited  to  the  next  post,  if  that  should  leave  before 
the  expiration  of  the  twenty-four  hours.  Bellasis  v.  Hester,  1  Ld. 
Raym.  280.     But  see  contra,  Morrison  v.  Buchanan,  6  C.  &  P.  18. 

1  1  Parsons'  N.  &  B.  348;  1  Daniel's  Negot.  Inst.,  §  492:  Chitty  on 
Bills,  [*279]  317. 

2  Ingram  v.  Forster,  2  J.  P.  Smith,  242.  See  post,  §  224,  as  to  effect 
of  detention  of  the  bill  implying  acceptance. 

2  In  Massachuscts,  lihode  Island,  California,  Alabama,  Arizona,  Ar- 
kansas, Idaho,  District  of  Columbia,  Kansas,  Nevada,  Missouri,  New 
York,  Washington  Territory. 

^  Downes  v.  Church,  13  Pet.  205;  Bank  of  Pittsburgh  v.  Neal,  22  How. 
108;    Walsh  v.  Blatchley,  6  Wis.  422;  Perreira  v.  Jopp,  10  B.  &  C.  450. 

*  Bank  of  Pittsburgh  v.  Neal,  22  How.  96,  109. 

6  Case  V.  Burt,  15  Mich.  82.  But  see  Andrews  v.  German  Nat.  Bank, 
■9  Heisk.  211,  where  it  was  held  to  be  a  good  presentment,  where  a  check 
was  held  back  at  the  request  of  the  drawer  until  a  later  hour  in  the  day, 
three  p.  m. 

357 


§    218  ACCEPTANCE    OF    BILLS    OF    EXCHANGE.        [CH.  XI. 

of  accepttince,  there  is  no  need  of  presenting  the  bill  for 
acceptance,  and  the  drawer  has  the  same  liability  as  on  an 
accepted  bill.^  Acceptance  may  be  dispensed  with,  when- 
ever the  drawee  is  incapable  of  making  a  valid  contract, 
because  he  is  under  legal  disabilities  ;  for  example,  an  idiot 
or  insane  person,  a  minor  or  a  married  woman  ;  ^  in  such 
cases  the  holder  need  not  present  the  bill  for  acceptance, 
but  may  at  once  protest  it,  and  proceed  against  the  other 
parties  for  non-acceptance.^  There  is,  also,  no  need  of  ac- 
ceptance, when  the  drawer  and  drawee  are  the  same  per- 
sons ;  not  only  when  they  are  the  one  natural  person,  or  a 
partnership,*  but,  also,  when  they  are  different  officers  of 
the  same  private  corporation.®  But  it  is  different  with 
public  or  municipal  corporations.  It  is  held  that  the 
drafts  or  warrants  of  one  municipal  officer  on  another  must 
be  presented  for  acceptance  in  order  to  be  protested.® 

On  the  other  hand,  it  has  been  held  that  presentment 
for  acceptance  cannot  be  dispensed  with,  because  the 
drawer  had  countermanded  the  bill.''     And  it  must  be  ob- 


1  Miller  v.  Thompson,  3M.  &  G.  (42  E.  C.  L.  R.)  576;  Key  v.  Kinnear, 
2M.  &R.  117;  English  t'.  Wall,  12  Rob.  (La.)  132;  Denegre  v.  Milne, 
10  La.  Ann.  324;  Carson  v.  Russell,  2G  Tex.  452;  Liggett  v.  Weed,  7  Kan. 
273;  Webb  v.  Hears,  9  Wright,  222. 

2  See  ante,  chap.  IV. 

3  ]  Daniel's  Negot.  Inst.,  §  484;  Chittyon  Bills  [*192.]  221;  Thompson 
on  Bills,  92;  Story  on  Bills,  §  107.  See  Mellish  v.  Simeon,  2  H.  Bl.  378; 
Tooting  V.  Hubbard,  3  Bos.  &  Pul.  291 ;  California  Code. 

*  Cunningham  v.  Wardwell,  3  Fairf.  4G<J;  Roach  v.  Ostler,  1  Man.  & 
R.  120;  Douglass  V.  Cowles,  5  Day,  511;  Marion,  etc.,  R.  R.  Co.  v.  Ilodge, 
9  Ind.  1G3;  Miller  W.Thompson,  3  M.  &  G.  570.  But  see  Kaskas- 
kia  Bridge  Co.  v.  Shannon,  6  111.  15,  where  it  is  held  that  presentment  is 
not  dispensed  with,  where  the  drawer  and  drawee  are  the  same  person, 
but  that  thei'e  is  no  need  of  protest  and  notice. 

5  Hasoy  v.  White  Pigeon  Company,  1  Dough  (Mich.)  193;  Deunio  v. 
Table  Mountain  Water  Co.,  10  Cal.  3G9.     See  ante,  §  128. 

6  See  ante,  §  138. 

'  Chitty  on  Bills,  311;  1  Daniel's  Negot.  Inst.  §  450;  1  Parsons'  N. 
&B.  338;   Hill  t?.  Heap,  Dow.  &R.  57;  Prideaux  v.  Collier,  2  Stark.  57. 

358 


CH.  XI.]        ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  §    219 

served  that  waiver  of  the  notice  of  protest  is  not  equiv- 
alent to  a  waiver  of  the  acceptance.^ 

§  219.  Who  may  accept.  —  Except  in  cases  of  accept- 
ance for  honor,  no  one  but  the  drawee  named  in  the  bill  can 
accept  it,  and  be  bound  as  an  acceptor.  A  stranger  could 
not  bind  himself  as  an  acceptor  by  accepting  a  bill  which 
is  not  addressed  to  him.^  But  if  the  name  of  the  drawee  is 
left  blank,  the  acceptance  by  an  apparent  stranger  would 
be  an  acknowledgment  that  he  was  the  intended  drawee, 
and  he  would  be  bound  by  it.^  And  it  has  been  held  that 
if  the  bill  be  addressed  to  A.,  or  in  his  absence  to  B.,  it  will 
be  a  good  bill  of  exchange,  and  the  acceptance  by  either  of 
them  will  be  sufficient  and  binding.*  But  it  has  been  held 
that  if  any  one,  not  a  drawee,  signs  a  bill  as  an  acceptor, 
he  may,  if  his  obligation  rests  upon  a  sufficient  considera- 
tion, be  bound  thereby  as  a  guarantor.^ 

1  Drinkwater  y.  Tebbetts,  17  Me.  16;  Burnham  u.  Webster,  17  Me. 
60.  In  California,  by  the  code,  waiver  of  presentment  includes  waiver 
of  notice  of  protest,  but  the  waiver  of  protest  only  includes  waiver  of 
presentment  in  the  case  of  foreign  bills. 

2  Polhill  V.  Walter,  3  B.  &  Ad.  (23  E.  C.  L.  E.)  114;  Lindus  v.  Brad- 
well,  5  C.  B.  583;  Jackson  v.  Hudson,  2  Camp.  447;  Malcomson  v.  Mal- 
comson,  1  L.  R.  Ireland,  228;  Nichols  v.  Diamond,  9  Exch.  157;  Davis 
V.  Clark,  6  Q.  B.  (51  E.  C.  L.  R.)  16;  Jenkins  v.  Hutchinson,  13  Q.  B. 
(66  E.  C.  L.  R.)  744;  May  v.  Kelly,  27  Ala.  497;  Smith  v.  Lockridge,  8 
Bush,  425;  Keenan  v.  Nash,  8  Minn.  409. 

3  Gray  v.  Milner,  8  Taunt.  739;  3  J.  B.  Moore,  90;  Peto  v.  Reynolds, 
9  Exch.  410;  Davis  v.  Clark,  6  Q.  B.  (51  E.  C.  L.  R.)  16;  Wheeler  v. 
Webster,  1  E.  D.  Smith,  1 ;  1  Parsons'  N.  &  B.  289, 

*  Anon.,  12  Mod.  447;  1  Daniel's  Negot.  Inst.,  §  98;  Story  on  Bills, 
§58. 

s  Jackson  v.  Hudson,  2  Camp.  447;  Chitty  on  Bills,  321;  Story  on 
Bills,  §  254;  and,  at  least  as  between  the  immediate  parties,  such  a  per- 
son may  show  by  extraneous  evidence  in  which  character  he  intended  to 
be  bound.  Curi-y  v.  Reynolds,  44  Ala.  349.  But  see  Steele  v.  McKiulay, 
43  L.  J.  R.  358,  where  it  was  held  tliat  such  a  person  could  not  be  bound 
as  a  guarantor,  because  there  is  no  sufficient  memorandum  in  writing  to 
satisfy  the  requirements  of  the  statute  of  frauds.  See  Malcomson  v. 
Malcomson,  1  L.  11.  Ireland,  228. 

3.59 


§    21U  ACCEPTANCK    OF    BILLS    OF    EXCHANGE.        [ciI.   XI. 

It  must,  however,  be  remembered,  that  a  person  may 
hnvfully  have  more  than  one  name,  and,  consequently,  a 
drawee,  might  be  described  in  the  ])ill  l)y  one  name,  and 
accei)t  in  another  name.  Parol  evidence  is  admissible  to 
prove  that  the  two  names  describe  one  and  the  same  per- 
son.^ 

Where  the  bill  is  drawn  on  a  partnership,  the  acceptance 
by  any  one  of  the  firm  will  bind  all.''  And  it  has  been 
held  that  the  acceptance  by  one  of  the  firm  in  his  own  name, 
of  a  bill  drawn  against  the  firm,  would  be  binding  on  the 
firm,  since  the  signature  could  have  no  meaning,  unless  it 
M'as  intended  as  an  acceptance  for  the  firm.^  On  the  other 
hand,  if  a  bill  be  addressed  to  an  individual  member  of  a 
partnership,  and  in  accepting  he  uses  the  firm  name,  he 
binds  himself,  and  not  the  firm.^ 

If  the  bill  is  drawn  against  two  or  more  persons  jointly, 
all  should  accept,  and  if  one  of  them  refuses,  the  bill  may 
be  protested  for  his  non-acceptance.^  But  those  who  do 
accept  will  be  bouud  by  their  acceptance,  although  one  or 
more  of  the  drawees  should  refuse.^ 

The  bill  may  be  accepted  by  an  agent  of  the  drawee,  if 
he  has  the  authority  to  so  act  for  his  principal.  And,  al- 
though it  has  been  doubted  whether  the  holder  is  obliged  to 

1  Hascallr.  Life  Association  of  America,  12  N.  Y.  S.  C.  (5  Huu)  152; 
Couro  r.  Port  Henry  Iron  Co.,  12  Barb.  27. 

2  Pinkuey  v.  Hall,  1  Salk.  12G;  Mason  v.  llumsey,  1  Camp.  384;  Lloyd 
V.  Rowland,  2  B.  &  Ad.  23.     See  ante,  chap.  VL 

3  Wells  V.  Masterman,  2  Esp.  731;  Mason  v.  Rumsey,  1  Camp.  384; 
Dolman  u.  Orchard,  2  C.  &  P.  104;  Tolraau  v.  Hanuahan,  44  Wis.  133. 
But  see,  contra,  Heeuan  v.  Nash,  8- Minn.  40!>. 

*  Nichols  V.  Diamond,  24  Eng.  L.  &  Eq.  403. 

5  Chitty  on  Bills,  73,  321;  Dnpays  v.  Shepherd,  Ho)t,  297. 

6  Owen  V.  Van  Uster,  10  C.  B.  (70  E.  C.  L.  R.)  318;  Nichols  v.  Dia- 
mond, 9  Exch.  154;  Smith  v.  Milton,  133  Mass.  369.  And  it  would  be  no 
variance  to  allege  in  the  declaration  on  a  bill  addressed  to  A.,  B.,  and 
C,  where  only  A.  and  B.  accepted,  that  the  bill  was  drawn  on  A.  and  B. 
and  made  no  reference  to  C.     Mountstepheu   v.  Brooke,  1  B.  &  Aid.  224. 

360 


CH.  XI.]         ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  §    220 

take  an  acceptance  by  an  agent,  since  such  an  acceptance 
would  increase  the  burden  of  proving  the  holder's  title;  ^ 
there  are  authorities  which  assert  that  he  is  bound  to  take 
such  an  acceptance,  if  the  evidence  of  the  agent's  authority  is 
clear. 2  Certainly,  in  any  such  case,  the  holder  can  treat  the 
bill  as  dishonored,  unless  the  clearest  evidence  of  the  agent's 
authority  is  furnished  to  him.^  For,  if  an  acceptance  be 
taken  from  an  unauthorized  agent,  it  would  sustain  an  ac- 
tion for  damages  against  the  pseudo  agent,*  but  it  would 
be  otherwise  valueless ;  and  the  failure  to  give  to  the 
drawer  and  indorsers  notice  of  protest  and  non-acceptance 
M'ould  release  them,  unless  the  drawee  ratifies  the  unauthor- 
ized acceptance  of  his  agent.* 

§    220.   At  what    time    acceptances    may    be    made.  — 

Usually  a  bill  is  accepted  within  a  reasonable  time  after  its 
execution  and  delivery.  But  the  acceptance  may  be  made 
before  the  bill  is  drawn  or  when  it  is  still  incomplete.*'  The 
blank  acceptance,  so  delivered  by  the  acceptor,  may  be  filled 
up  by  any  one  who  gets  possession  of  it  ;^  and  the  acceptor  is 
liable  to  a  bona  fide  holder  for  whatever  amount  the  bill 

1  Coore  V.  Callaway,  1  Esp.  115;  Richards  v.  Bartou,  1  Esp.  269; 
Byles,  113;  Chitty,  321;   1  Dauiel's  Negot.  lust.,  487. 

-  Thompson  ou  Bills,  211;   Beawes,  No.  87. 

2  Atwoodw.  Munnings,  7  B.  &  C.  (14  E.  C.  L.  R.)  278;  Thompson  ou 
Bills,  211. 

<  See  Owen  v.  Van  Uster,  10  C.  B.   (70  E.  C.  L.  R.)  318. 

5  1  Daniel's  Negot.  Inst.,  §  487. 

6  Harvey  v.  Cane,  34  L.  T.  R.  G4;  Molloy  v.  Delves,  7  Bing.  428;  5  M. 
&  P.  275.  See  too  Johnson  v.  Collins,  1  East,  105;  Milne  u.  Brest,  4 
Camp.  393;  Baker  v.  Jubber,  1  M.&  G.  212;  Moiese  v.  Knapp,  30  Ga.  942; 
Coolidge  V.  Rayson,  2  Wheat.  66;  Murdock  v.  Mills,  11  Met.  5;  Russell 
V.  Wiggin,  2  Story,  213;  Wilder  v.  Savage,  1  Story,  22;  Goodrich  v.  De 
Forest,  15  Johns.  6;  Stemau  v.  Harrison,  42  Pa.  St.  49;  Bayard  v.  Lathy, 
2  McLean,  462;  Read  v.  Marsh,  5  B.  Mon.  8;  Crowell  v.  Van  Bibber,  18 
La.  Ann.  637. 

'  Schultz  V.  Ashley,  7  C.  &  P.  (32  E.  C.  L.  R.)  99. 

361 


§     220  ACCEPTANCE    OF    BILLS    OF    EXCHANGE.        [CH.   XI. 

may  bo  filletl  up.^  The  acceptance  may  also  he  made  after 
the  bill  has  matured,  aud  has  beeu  protested  for  non- 
payment.^ In  such  a  case,  the  bill  will  be  regarded  as 
payable  on  demand.''  But  unless  the  bill  has  been  pro- 
tested, the  drawee's  acceptance  after  a  refusal  to  accept 
will  not  bind  any  one  but  himself.*  The  death  of  the 
drawer  does  not  have  any  effect  upon  the  validity  of  the 
bill.  It  may  therefore  be  accepted  after  his  death,  and  be 
binding  upon  the  drawer's  estate.^  But  it  is  said  that  the 
drawee  cannot  accept  after  he  knows  of  the  bankruptcy 
of  the  drawer,®  although  it  will  be  a  good  acceptance,  if 
the  acceptor  had  no  knowledge  of  the  drawer's  bank- 
ruptcy." 

It  is  customary,  and  the  holder  may  require,  that  the 
date  of  the  acceptance  shall  be  written  on  the  bill,  partic- 
ularly where  the  bill  is  payable  a  certain  time  after  sight  or 
on  demand,  in  order  that  the  holder  may  ascertain  from  the 
face,  and  without  the  help  of  extraneous  evidence,  when 
the  bill  becomes  due.^     AYhen  the  acceptance  bears  no  date, 

1  Bank  of  Commonwealth  v.  Carry,  2  Dana,  142;  Moody  v.  Thielkelcl, 
13  Ga.  55;  Montague  v.  Perkins,  22  Eng.  L.  &  Eq.  51  r,. 

2  Jackson  v.  Pigot,  1  Ld.  Raym.  3G4;  12  Mod.  212;  Wynne  v.  Raikes, 
5  East,  513;  Grant  v.  Shaw,  16  Mass.  344;  Exchange  Bank  of  St.  Louis 
V.  Rice,  98  Ma^s.  288;  Mechanics'  Bank  v.  Livingston,  33  Barb.  458; 
Williams  v.  Winans,  2  Green  (N.  J."),  339;  Spalding  v.  Andrews,  48  Pa. 
St.  413;  Stockwell  v.  Bramble,  3  Ind.  428. 

»  Jackson  v.  Pigot,  1  Ld.  Raym.  364;  Mitford  v.  Walcot,  1  Ld.  Raym. 
374;  Billing  v.  De  Vaux,  3  M.  &  G.  565;  Christie  v.  Pearl,  7  M.  &  W.  491: 
Stein  V.  Yglesias,  5  Tyrw.  174;  Bank  of  Louisville  t).  EUery,  34  Barb. 
630;  Williams  v.  Winans,  2  Green  (N.  J.),  339;  Stockwell  v.  Bramble,  3 
lud.  428. 

4  Wynne  v.  Raikes,  5  East,  514;  Chitty  on  Bills,  [*286]  324. 

5  Cutts  V.  Perkins,  12  Mass.  206;  Debesse  v.  Napier,  1  McCord,  106; 
Hammond  v.  Barclay,  2  East,  227;  Chitty  on  Bills,  [*287]  325. 

6  Pinkerton  v.  Marshall,  2  H.  Bl.  334. 

T  Wilkins  v.  Casey,  7  T.  R.  711;  Copland  v.  Stein,  8  T.  R.  208. 

8  Daniel's  Negot.  Inst.,  §  395;  Powell  v.  Monnier,  1  Atk.  611;  Du- 
faur  V.  Oxenden,  1  M.  &R.  90;  Chitty  on  Bills,  [*292]  330;  Moore  v.  Wil- 
ley,  Buller  N.  P.  270.  And  the  date  need  not  be  in  the  handwriting  of 
3(12 


CH.  XI.]         ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  §    221 

it  is  presumed,  in  the  absence  of  specific  evidence,  to  Iiave 
been  made  a  reasonable  time  after  its  execution,  and  prior 
to  the  day  of  payment.^  And  in  every  such  case,  tlie  ac- 
tual time  of  acceptance  may  be  proved  by  parol  evidence.^ 

§  221.  Wben  acceptance  may  be  revoked.  —  When  the 
bill  is  once  accepted  and  delivered  to  the  holder,  it  is  irrev- 
ocable, even  with  the  consent  of  the  holder,  since  the 
drawer  and  indorsers  have  a  vested  interest  in  the  accept- 
ance.^ It  has  however  been  held  that  the  acceptance  is 
revocable  even  after  delivery,  as  long  as  there  is  time 
enough  to  give  the  proper  notice  of  non-acceptance,  where 
the  acceptance  was  given  in  consequence  of  a  mistake  of 
fact.*  But  the  acceptance  is  not  complete,  as  long  as  there 
has  been  no  delivery  to  the  holder.  Simply  writing  an 
acceptance  on  the  bill  does  not  make  a  complete  accept- 
ance, and  it  may  be  cancelled  before  the  return  of  the  bill 
to  the  holder.®  But  in  those  States,  in  which  verbal  ac- 
ceptances are  legal,  the  acceptance  will  be  irrevocable 
without  a  return  of  the  bill  to  the  holder,  if  the  fact  of 
acceptance  has  been  communicated  to  the  holder  in  any 
other  way.^ 

the  acceptor,  in  order  to  raise  the  presumption  of  its  being  the  date  of 
the  acceptance.     Glossup  v.  Jacob,  i  Camp.  227. 

1  Begbi  V.  Levi,  I  C.  &  J.  180;  Roberts  v.  Bethel,  22  L.  J.  C.  P.  G9. 
But  it  has  been  said  that  acceptance  may  be  presumed  to  have  been  made 
on  the  date  of  the  bill.     Chitty  on  Bills,  [*300]  338. 

2  Kenner  0.  Creditors,  1  La.  120. 

•"  Chitty  on  Bills,  [*308]  347;  1  Daniel's  Negot.  Inst.,  §  493;  Thornton 
V.  Dick,  4  Esp.  270;  Audressen  v.  First  Nat.  Bank,  1  McCrary,  252. 

^  Irving  Bank  v.  Wetherald,  36  N.  Y.  335.  In  California,  by  the  code, 
it  is  revocable,  as  long  as  the  bill  has  not  been  transferred  to  a  pur- 
chaser for  value.     1  Hittell's  Code  &  Stat.,  §  8198. 

6  Cox  V.  Troy,  5  B.  &  Aid.  474;  Wilkinson  v.  Johnson,  5  Dowl.  &  Ey. 
408;  3  B.  &  C.  428;  1  Dow.  &  Ry.  38;  Bentinck  v.  Dorrien,  6  Ea.st,  199; 
Trimmer  v.  Addy,  6  East,  206;  Bank  of  Van  Diemen's  Land  ^  Bank  of 
Victoria,  L.  R.  3  P.  C.  526;  Chapman  v.  Cottrell,  34  L.  J.  (x.  s.)  186; 
Ralli  V.  Deniston,  6  Exch.  483.     See  Lindsay  i'.  Price,  33  Tex.  280. 

6  Grant  v.  Hunt,  1  C.  B.  44;  Smith  v.  M'Lure,  5  East,  47G. 

363 


§    222  ACCEPTANCE    OF    BILLS    OF    EXCHANGE.        [CH.   XI. 

It  has  also  been  held  that  an  agreement  to  accept  is 
revocable  as  long  as  the  bill  has  not  been  presented  for 
acceptance.^ 

§  222.  Acceptances,  verbal  and  written  —  Statute  of 
frauds.  — Acceptances  are  usually  written  across  the 
face  of  the  bill ;  and  it  seems  that  the  holder  may  insist 
upon  such  an  acceptance,  and  refuse  to  take  any  other, 
whether  written  or  verbal. ^  But,  except  in  those  States  in 
which  there  are  statutory  provisions  to  the  contrary,  a  ver- 
bal acceptance  will, be  valid  and  effectual,  if  assented  to  by 
the  holder.^  In  England,  and  in  many  of  the  United 
States,  statutes  now  expressly  require  that  all  acceptances 
shall  be  in  writing,  and  by  most  of  these  States  the  written 
acceptance  is  required  to  be  signed  by  the  acceptor.*     The 

1  Ilsley  V.  Jones,  12  Gray,  260;  First  N|t.  Bank  v.  Clark,  61  Md.  401. 
In  the  last  case,  the  agreement  to  accept  and  the  revocation  of  tliat 
agreement  Avere  sent  to  the  drawer  in  separate  telegrams,  and  the  drawer 
in  negotiating  the  bill  fraudulently  suppressed  the  telegraphic  revoca- 
tion. 

2  Chitty  on  Bills,  [*287]  326;  1  Daniel's  Negot.  Inst.,  §  504. 

3  Scudder  v.  Union  Nat.  iJiink,  91  U.  S.  40G;  Bird  v.  McElvaine,  10 
Ind.  40;  Stockwell  v.  Bramble,  3  Ind.  428;  Exchange  Bank  of  St.  Louis 
V.  Rice,  93  Mass.  288;  Cook  v.  Baldwin,  120  Mass.  317;  Pierce  v.  Kitt- 
redge,  115  Mass  374;  Storer  v.  Logan,  9  Mass.  55;  Wells  v.  Brigham,  6 
Cush.  6;  Julian  r.  Shobrook,  2  Wils.  9;  Sproatu.  Matthews,  1  T.R.  182; 
Grant  tj.  Shaw,  16  Mass.  341;  Dunavan  v.  Flynn,  118  Mass.  537;  Fisher 
V.  Beckwith,  19  Vt.  31;  Arnolds.  Sprague,  34  Vt.  402;  Jai-vis  v.  Wilson, 
46  Conn.  90;  Williams  v.  Winans,  2  Green  (N.  J.),  339;  Ward  v.  Allen,  2 
Met.  53;  Spaulding  u.  Andrews,  48  Pa.  St  411;  Mull  v.  Bricker,  75  Pa. 
St.  255;  Leonard  v.  Mason.  1  We«ul.  522;  Walker  v.  Lide,  1  Rich.  249; 
Bancroft  v.  Denny,  5  Houst.  9;  Miller  v.  Neihaus,  21  Ind.  401 ;  Hunler  v. 
Cobb,  1  Bush.  239;  McCutcheon  v.  Rice,  56  Miss.  455;  Phelps  v.  North- 
rup,  56  111.  156;  Walters  v  G.  II.  &  Co.,  1  Tex.  App.  753;  Kennedys. 
Geddes,  8  Port.  263;  Whilden  v.  Merchants',  etc..  Bank,  64  Ala.  1;  St. 
Louis  Stock  Yards  v.  O'Reilly,  85  111.  546;  Sturges  v.  Fourth  Nat.  Bank, 
76  111.  595. 

*  19  and  20  Vict.,  ch.  971,  §  6 ;  Arkansas,  Rev.  Stat.  1874,  §  549 ;  Georgia, 
1  P.  L.  62,  No.  117,  1880.     In  the  following  States  it  is  required  that  the 
acceptor    sign    the  acceptance:  Alabama,  1876,  Code,  §  2101;  Arizona, 
364 


CH.  XI.]        ACCEPTANCE   OF   BILLS    OF    EXCHANGE.  §    222 

question  whether  parol  acceptances  are  binding  upon  the 
acceptor  is,  in  those  States  in  which  the  matter  is  not  ex- 
pressly regulated  by  statute,  further  complicated  by  its 
relation  to  a  provision  of  the  statute  of  frauds.  The 
provision  is  that  all  promises  to  answer  for  the  debt  of 
another  shall  be  in  writing  and  signed  by  the  promisor. 
If  an  acceptance  or  a  promise  to  accept  is  a  promise  to  an- 
swer for  the  debt  of  another,  then  it  is  within  the  statute  of 
frauds,  and  must  be  in  writing  and  signed,  in  order  to  be 
binding  upon  the  drawee.  And  so  it  has  been  held  by  some 
of  the  cases. ^  Other  cases  maintain  that  the  acceptance  is 
a  promise  to  answer  for  the  debt  of  another,  and  therefore 
within  the  statute  of  frauds,  when  the  drawer  accepts  for 
accommodation,  ^.e.,  without  having  in  his  possession 
funds  of  the  drawer  with  which  to  pay  the  bill. 2  But  if  the 
drawee  has  funds  of  the  drawer,  and  the  draft  is  in  fact  a 


1877,  C.  L.,  §§  3469-3471;  California,  1  Hittell's  Codes  &  Stats.,  §  8193; 
District  of  Columbia,  1857,  R.  C.  134;  Idaho,  1874,  R.  L.  653;  Kansas, 
1879,  C.  L.,  ch.  14,  §  8;  Maine,  1871,  Rev.  Stat.,  ch.  32,  §  10;  Michigan, 
1871,  1  C.  Lc  516,  §  7;  Minnesota,  1878,  G.  S.  316,  §  13;  Mississippi,  1880, 
Rev.  Code,  §  1133;  Nevada,  1873,  1  C.  L.,  ch.  5,  §  G;  New  York,  Rev. 
Stat.  768,  §  6;  1882,  R.  S.  2242;  Oregon,  1872,  Deady  G.  L.  718,  §7; 
Pennsylvania,  1881,  P.  L.  17;  Washington  Territory,  1881,  Code,  §§  2302- 
2306;  Wisconsin,  1878,  R.  S.,  §  1681.  Iq  South  Carolina  (1873,  R.  S.  320, 
§  11),  and  Dakota  (1877,  Rev.  Code,  §  1896),  the  acceptance  is  required  to 
be  in  writing  on  the  bill.  In  the  following  States  it  is  provided  by  the 
statutes  that  if  the  acceptor  refuses  to  write  the  acceptance  on  the  bill, 
the  bill  may  b«  treated  as  dishonored,  and  protested  for  non-acceptance ; 
Alabama,  1876,  Code,  §  2103;  Arizona,  1877,  C.  L.,  §§  34G«-3471 ;  Ai'kan- 
sas,  1874,  R.  S.,  §  552;  California,  1880,  1  Hittell's  Codes  &  Stat.,  §  8193; 
District  of  Columbia,  1857,  R.  C.  134,  §  9;  Idaho,  1874,  R.  L.  653,  §  9; 
Kansas,  1879,  C.  L.,  ch.  14,  §  11;  Mississippi,  1880,  R.  C,  §  1133;  Mis- 
souri, 1879,  1  R.  S.,  §  536;  Ne20  York,  1882,  3  R.  S.  2243,  §  9;  Washing- 
ton Territory,  1881,  Code,  §§  2302-2306. 

1  Plummer  v.  Lyman,  49  Me.  229;  Manley  v.  Geagan,  105  Mass.  445; 
Wakefield  v.  Greenhood,.  29  Cal   600. 

2  Pikev.  Irwin,  1  Sandf.  14;  Quin  v.  Hanford,  1  Hill,  82;  Carville  v. 
Crane,  5  Hill,  583;  Taylor  v.  Drake,  4  Strobh.  431 ;  Brown  on  Statute  of 

Frauds,  174. 

365 


§    223  ACCEPTANCE   OF   BILLS    OF   EXCHANGE.        [CH.  XI. 

direction  to  p«iy  a  part  or  the  whole  of  those  funds  to  the 
payee  or  iudorser  of  tlie  bill,  the  acceptance  is  therefore 
not  a  promise  to  answer  for  the  debt  of  another,  but  a 
promise  to  pay  his  own  debt  to  some  one  other  than  his 
creditor.  It  is  therefore  not  within  the  statute  of  frauds.^ 
And  since  the  acceptance  involves  an  admission  that  the 
drawee  has  such  funds,  he  is  estopped  from  denying  that  he 
has  such  funds,  in  any  action  by  -a  holder  for  value  and 
without  notice.^  But  the  great  majority  of  the  cases,  which 
hold  that  verbal  acceptances  are  valid  and  binding,  main- 
tain directly  or  inferentially  that  the  stptute  of  frauds  does 
not  in  any  case  apply  to  commercial  or  negotiable  paper. ^ 

§  223.  What  words  amount  to  acceptance. — The  ac- 
ceptance is  usually  made  by  writmg  the  word  '*  accepted  " 

'  lu  ToTvnsley  v.  Sumrall,  2  Pet.  170,  Story,  J.,  said:  "This  in  not  a 
case  falling  within  the  objects  or  mischiefs  of  the  statute  of  fr«uas.  If 
A.  says  to  B.,  pay  so  much  money  to  C,  and  I  will  repay  it  to  'ou,  it  is 
an  original,  independent  promise;  and  if  the  money  is  paid  on  ;ho  faith 
of  it,  it  has  always  been  deemed  an  obligatory  contract,  even  though  it 
be  Ijy  parol,  because  there  is  an  original  consideration  moving  between 
the  immediate  parties  to  the  contract.  Damage  to  the  promisee  constitutes 
as  good  a  consideration  as  a  benefit  to  the  promisor.  In  cases  not  ab- 
solutely closed  by  authority,  this  court  has  already  expressed  a  strong 
inclination  not  to  extend  the  operation  of  the  statute  of  frauds  so  as  to 
embrace  original  and  distinct  proitises  made  by  different  persons  at  the 
same  time  upon  the  same  general  consideration.  D'Wolf  v.  Raband,  I 
Pet.  47G."  See  also  Shields  v.  Middleton,  2  Cranch  C.  C.  205;  Van 
Reinesdyck  v.  Kane,  1  Gall.  C.  C.  G33;  Pike  v.  IrAvin,  I  Sandf.  14;  Spa- 
dine  V.  Reed,  7  Bush,  455;  Beshears  v.  Rowe,  4G  Mo.  501 ;  Strohccker  v. 
Cohen,  1  Spears,  349.  See  Spalding  v.  Andrews,  48  Pa.  St.  411;  Dunbar 
V.  Smith,  —  Ala.  (1881) 

2  Carvillc  v.  Crane,  5  Hill,  583;  Taylor  v.  Drake,  4  Strobh.  431. 

'  See  cases  cited  in  preceding  notes.  See  also  Butler  v.  Prentiss, 
Mass. 430;  Pillansr.  VanMierop,  3  Burr.  1674;  Nelson  v.  First  Nat.  Bank, 
48  111.  41;  Chitty  on  Bills,  4;  1  Daniel's  Negot.  Inst.,  §  567;  Raborge  v. 
Reyton,  2  Wheat.  385;  Fisher  v.  Beckwith,  19  Vt.  31;  Dullv.  Brucker. 
7G  Pa.  St.  255;  Laflin  Powder  Co.  v.  Sinsheiraer,  48  Md.  411;  Storer  r. 
Logan,  9  Mass.  55.  The  same,  it  is  hold,  even  where  it  is  an  accommo- 
dation acceptance.  Jarvis  v.  Wilson,  46  Conn.  90. 
366 


CH.  XI.]        ACCEPTANCE    OF   BILLS    OF   EXCHANGE.  §    223 

across  the  face  of  the  bill,  and  adding  the  signature  of  the 
drawee.^  According  to  some  of  the  statutes,  it  is  required 
that  the  acceptance  shall  always  be  signed  by  the  acceptor. ^ 
But  by  the  common-law  merchant,  the  signature  is  not 
necessary  to  a  good  acceptance.^  So  also  is  the  word  *'  ac- 
cepted "  not  necessary.  Any  other  word  or  expression, 
which  by  reasonable  intendment  can  be  construed  to  mean 
an  acceptance,  will  be  sufficient.  Thus,  in  written  accept- 
ances on  the  bill,  the  words  '*  seen,"  *  "presented,"^ 
"honored,"^  *' I  will  pay  the  bill,"  ^  "excepted,"  evi- 
dently intended  for  *' accepted,"  ^  "payment  guaran- 
teed,"^ writing  the  day  and  mouth  when  presented,^" 
directing  another  to  pay  the  bill  for  the  drawee, ^^  and 
simply  the  signature  of  the  drawee,  without  any  words  of 
explanation, ^2  have  all  been  held  to  be  sufficient  accept- 
ances.^^ 

1  The  acceptance  is  usually  written  across  the  face  of  the  bill,  but  that 
is  not  necessary.  It  may  appear  on  any  part  of  the  bill,  and  may  even  be 
written  on  the  back.  See  1  Daniel's  Negot.  Inst,  §  498;  Thompson  on 
Bills,  220. 

2  See  preceding  note. 

3  Philips  V.  Frost,  19  Me,  77;  Corlett  v.  Conway,  5  M.  &  W.  653;  Leslie 
V.  Hastings,  1  Moody  &  M.  119;   Dufaur  v.  Oxenden,  1  Moody  &M.  90. 

*  Barnet  v.  Smith,  10  Foster,  256;  Spear  v.  Pratt,  2  Hill,  682. 

5  1  Parsons'  N.  &  B.  282;   1  Daniel's  Negot.  Inst.,  §  497. 

6  Anonymous,  Comb.  401. 

'  Ward  V.  Allen,  2  Mete.  53;  Leach  v.  Buchanan,  4  Esp.  226. 

8  Miller  v.  Butler,  1  Cranch  C.  C.  170;  Meyer  v.  Beardsley,  1  Vroom, 
236. 

9  Block  V.  Wilkinson,  42  Ark.  253. 

"  1  Parsons'  N.  &  B.  243;  1  Daniel's  Negot.  Inst.,  §  497. 

'1  Moore  w.  Whithy,  Butler  N.  P.  270;  Harper  v.  West,  1  Cr.  C.  C.  192. 

12  Spear  v.  Pratt,  2  Hill,  582;  Wheeler  v.  Webster,  1  E.  D.  Smith,  1. 
And  in  such  a  case  it  is  permissible  for  the  drawee  to  show  that  he  re- 
fused to  write  the  word  "accepted"  above  the  signature,  in  order  to 
prove  that  he  did  not  intend  that  his  signature  should  operate  as  an  ac- 
ceptance.    Kaufman  v.  Barrenger,  70  La.  Ann.  419. 

"  It  was  held  in  Massachusetts  that  the  words,  "  I  take  notice  of  the 
above,"  would  not  necessarily  import  an  acceptance.  Cook  v.  Baldwin, 
120  Mass.  317. 

367 


§    223  ACCEPTANCK    OF    15ILLS    OF    KXCHAXGE.        [cil.   XI. 

The  greatest  difficult}^  in  (leterminiug  whether  the  words 
used  are  sufficient  to  constitute  an  acceptance,  is  to  be 
found  when  the  acceptances  are  either  verbal  or  written  on 
a  separate  paper.  The  following  have  been  held  to  be 
sufficient;  "Leave  your  bill  with  me,  and  I  will  accept 
it;"i  "If  the  bill  comes  back,  I  will  pay  it;"^  "  I  am 
prepared  to  pay  your  bill;"  ^  "  That  is  my  signature,  and 
I  will  pay  the  bill,"  *  and  the  like.^ 

On  the  other  hand,  wdien  the  words  are  of  indefinite 
meaning,  they  will  not  suffice  to  make  a  good  acceptance. 
The  words  were  held  to  be  insufficient  in  the  following 
cases:  "  There  is  your  bill,  it  is  all  right;"  ^  "  I  will  pay 
it,  but  I  cannot  now,  I'll  givej'oua  bill  at  three  months;"^ 
"  The  bill  shall  have  attention."  ^ 

Part  payment  and  crediting  it  on  the  bill  is  not  sufficient 
to  bind  the  drawee  to  pay  the  balance.^     But  it  has  been 

1  Chitty  Jr.  12:  1  Dauiel's  Negot.  Inst.,  §  504a. 

2  Cox  V.  Coleman,  Chitty  Jr.  on  Bills,  294.  See  also  Grant  v.  Shaw 
16  Mass.  341. 

3  Billing  u.  Devaux,  3  Man.  &  G.  565. 

4  Leach  v.  Buchanan,  4  Esp.  226;  Edsou  v.  Miller,  22  N.  H.  183; 
Hatcher  v.  Stalworth,  26  Miss.  376;  Sturges  v.  Fourth  Nat.  Bank,  75  111. 
595. 

^  "  The  bill  is  correet  and  shall  be  paid."  Ward  v.  Allen,  2  Mete.  53; 
"  If  you  will  send  it  to  the  counting-house  again,  I  will  give  directions  for 
its  being  accepted,"  held  to  be  good,  if  presented  again,  Anderson  v.  Hicks, 
3  Camp.  179;  the  exclamation,  "  What!  not  accepted!  we  have  had  the 
money ;  they  ought  to  be  paid,  but  I  do  not  interfere  in  this  business, 
you  should  see  Mr.  P."  Fairlie  v.  Herring,  11  Moore,  320;  3  Biug.  525. 
"  Will  pay  A.  Harper,  draft  $2,300  for  stock  "  by  telegram.  Coffman  v. 
Campbell,  S7  111.  (1878)  98;  a  promise  to  pay  bill  drawn  at  sight  on  a 
subsequent  day.  Clark  v.  Gordon,  3  Rich.  311.  But  see  Peck  r.  Coch- 
ran, 7  Pick.  35. 

6  Powell  0.  Jones,  1  Esp.  17. 

7  Reynolds  v.  Peto,  11  Exch.  410;  s.  c.  33  Eng.  L.  &  Eq.  481. 
*  Rees  V.  Warwick,  2  Barn.  &  Aid.  113. 

3  First  Nat.  Bank  u.  Whitman,  94  U.  S.  343;  Bassett  r.  Haines,  9  Cal. 
261 ;  Cook  V.  Baldwin,  120  Mass.  317.     It  is  insufficient,  even  where  there 
is  an  indorsement  of  a  calculation   as  to  the  balance   due.     Hunter  v. 
Cobb,  1  Bush,  2.^9.     But  see  Gallagher  v.  Black,  44  Me.  99. 
3(;8 


CH.  XI.  J         ACCEPTANCE    OF    BILLS    OB"    EXCHANGE.  §    224 

held  in  Michigan  to  be  a  good  acceptance,  where  there  was 
indorsed  on  the  bill  "paid  on  this  order"  and  signed  by 
the  drawee.^ 

But,  in  any  event,  words  of  the  description  just  given, 
will  not  aniDunt  to  an  acceptance,  unless  they  are  addressed 
to  the  drawee  or  his  agent.  They  are  insufficient,  if  ad- 
dressed to  a  stranger. 2 

§  224.  Implied  acceptances,  detention  and  destruction 
of  bill. — It  is  held  that  the  acceptance  of  a  bill  may  be 
implied  from  any  conduct  of  the  drawee,  which  is  incon- 
sistent with  the  act  of  refusing  acceptance.^  Thus,  if  a 
bill  is  drawn  for  the  drawee's  accommodation,  and  he  has 
it  discounted,  his  negotiation  of  it,  with  a  promise  to  pay 
at  maturity,  will  be  an  implied  acceptance.^  So,  also,  will 
part  payment,  with  a  certificate  of  deposit  for  the  balance, 
be  an  implied  acceptance.^ 

The  more  common  cases  of  implied  acceptances,  are  those 
which  arise  from  agreements  to  accept.  These  cases  are 
discussed  in  a  separate  section.® 

It  is  also  sometimes  held  that  if  the  drawee  detains  a  bill 
for  a  longer  period  than  twenty-four  hours,  without  giving 
a  reply,  the  detention  will  operate  as  an  implied  acceptance 
of  the   bill.     This  is   especially  true,    where    the    drawee 

1  Peterson  v.  Hubbard,  28  Mich.  197.  And  so  also  where  in  addition 
to  the  part  payment,  there  was  indorsed  •'  It  being  all  the  drawee  agrees 
to  pay  unless  the  drawer  intended  the  order  to  be  exclusive  of  twenty 
dollars  which  the  drawee  had  previously  paid  without  order."  Philips 
V.  Frost,  29  Me.  77. 

2  Martin  v.  Bacon,  2  Mills,  132;  1  Parsons'  N.  &  B.  286;  1  Daniel's 
Negot.  Inst.,  §  507. 

3  1  Parson's  N.  &  B.  287;  1  Negot.  Inst.,  §  499;  Billing  v.  DeVaus,  3 
M.  &  G.  565;  McCutchen?;.  Price,  56  Miss.  455. 

<  Bank  of  Rutland  v.  Woodruff,  34  Vt.  89;  1  Daniel's  Negot.  Inst., 
§  501.     But  see  Swope  v.  Ross,  40  Pa.  St.  186. 

5  Andressen  v.  First  Nat.  Bank,  2  Fed.  Rep.  125.  As  to  the  effect  of 
part  payment  generally,  see  ante,  §  223. 

6  See  post,  §  226. 

24  369 


§    224:  ACCEPTANCE    OF    BILLS    OF    EXCHANGE.        [CH.  XI. 

makes  use  of  language,  from  which  an  iuteDtion  to  accept 
may  be  inferred.^  Some  of  the  cases  seem  to  recognize 
that  a  simple  detention  amounts  to  an  acceptance,  unless 
explained  by  accompanying  circumstances;  ^  but  since  it  is 
the  duty  of  the  holder  to  send  or  return  for  th'e  bill  at  the 
expiration  of  the  twenty-four  hours,  or  whatever  other  time 
is  permitted  to  the  drawee  for  the  purpose  of  deliberation, 
it  does  not  seem  reasonable  that  the  detention  of  the  bill 
should  operate  as  an  implied  acceptance,  unless  there  has 
been  a  demand  for  the  return  of  the  bill.^  It  has  been 
held  that  the  willful  destruction  of  the  bill,  will  support 
the  implication  of  an  acceptance,  unless  there  has  been  a 
previous  refusal  to  accept.*     And  this  is  now  provided  by 

1  Chitty  on  Bills,  [*295]  334;  1  Daniel's  Negot.  Inst.,  §  499a;  Har- 
vey V.  Martin,  1  Carap.  425.  In  Harvey  v.  Martin,  supra,  the  drawee  was 
told  by  the  payee  that  an  unreasonable  detention  of  the  bill  will  be  treated 
as  an  implied  acceptance.  In  Hough  v.  Loring,  24  Pick.  254,  the  deten- 
tion was  coupled  with  a  statement  of  the  drawee  to  a  third  person  that 
he  intended  to  accept. 

2  Hall  V.  Steele,  G8  111.  231;  Dunavan  v.  Flynn,  118  Mass.  537. 

3  See  Jenne  v.  Ward,  2  Stark.  326;  1  B.  &  Aid.  654;  Mason  v.  Barff,  2 
B.  &  Aid.  26;  Koch  v.  Howell,  6  Watts  &  S.  350.  In  Mason  v.  BarfiE,  su- 
pra, the  bill  was  detained  for  ten  or  twelve  days,  in  expectation  of  re- 
ceiving funds  from  the  drawer  to  cover  the  amount  of  the  bill.  In  Koch 
V.  Howell,  6  Watts  &  S.  350,  the  agent  of  the  drawee  originally  detained 
the  bill  until  he  could  submit  it  to  the  drawee  who  retained  possession 
of  the  bill  until  the  trial  of  the  action  on  it,  but  refused  to  accept.  In 
many  of  the  States,  it  is  now  provided  by  statute,  that  if  the  drawee  re- 
fuses to  return  the  bill  within  twenty-four  hours  after  receiving  it,  he 
will  be  presumed  to  have  accepted  it.  Alabama,  1876,  Code,  §  2105;  Ari- 
zona, 1877,  C.  L.,  §  3474;  Arkansas,  1874,  R.  S.,  §  554 ;  Distnctof  Columbia, 
1857,  Rev.,  eh.  135,  §  11;  Idaho,  1874,  R.  L.  653,  §  11;  Kansas,  1879,  C. 
L.,  ch.  14,  §  13;  Missouri,  1879,  1  R.  S.,  §  538;  iVew  York,  1882,  3  R.  S. 
2243,  §  11;  Washington  Territory/,  1881,  Code,  §  2307.  It  is  expressly  held 
under  the  New  York  statute,  th^t  there  must  be  a  demand  and  refusal  to 
return,  in  order  that  the  detention  may  operate  as  an  implied  accept- 
ance. Matteson  v.  Moulton,  11  Hun,  268;  s.  c.  79  N.  Y.  627.  According 
to  the  California  Code,  the  refusal  of  the  drawee  to  return  the  bill,  makes 
it  payable  immediately.     1  Hittel's  Codes  &  Stats.,  §  8195. 

*  Jenne  v.  Ward,  2  Stark.  326;  1  B.  &  Aid.  653, 
370 


CH,  XI.]         ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  §    225 

statute  in  New  York  and  Missouri.^  Independently  of 
statute,  it  would  seem  illogical  to  hold  that  the  destruction 
of  a  bill  implied  an  intention  to  accept,  and  by  acceptance 
to  pay  the  bill  to  the  holder.^  It  would  seem  more  logical 
to  hold  that  the  willful  destruction  of  the  bill  would  be  the 
strongest  evidence  of  a  determination  not  to  honor  the  bill, 
but  that  this  tortious  act  would  subject  the  drawee  to  an 
action  in  trover.^ 

§  225.  Acceptances  on  separate  paper.  —  Unless  a  stat- 
ute prohibits  it,*  the  acceptance  may  be  written  on  a 
separate  paper,  instead  of  across  the  bill.^  Acceptances 
may  be  communicated  by  telegrams,  as  well  as  by  letter.^ 
But  in  many  of  the  States  it  is  provided  by  statute,  and 
elsewhere  it  is  held  independently  of  statute,  that  the 
holder  can  refuse  to  take  any  acceptance  that  is  not  written 
on  the  bill.^ 

It  is  a  general  rule  that  an  acceptance  written  on  a  sep- 
arate paper,  will  be  an  effective  acceptance  only  as  to  those 
persons  who  take  the  bill  with  knowledge  of  the  acceptance 
and  on  the  strength  of   it.     A  holder,  who  takes  the  bill 


1  1882,  3R.  S.  N.  Y.  2243,  §  11;  IE.  S.  Mo.  1879,  §  538.  See  Pousch 
V.  Duff,  35  Mo.  312. 

2  Chitty  ou  Bills,  [*296]  335. 

3  Story  on  Bills,  §  248;  1  Parsons'  N.  &  B.  285 ;  1  Daniel's  Negot.  Inst., 
§  500. 

^  It  is  so  prohibited  in  South  Carolina  and  Dakota.  R.  S.  So.  Ca. 
(1873),  320,  §  11;  Rev,  Code,  Dakota  (1877),  §  1896. 

5  1  Daniel's  Negot.  Inst.,  §  503 ;  Billing  v.  DeVaiix,  3  M.  &  G.  565;  Fair- 
lie  V.  Herring,  3  Bing.  625;  Grant  v.  Hunt,  1  M.  G.  &  S.  44;  Wynne  v. 
Raikes,  5  East,  514;  Pierson  v.  Dunlap,  Cowp.  571;  Ex  parte  Dyer,  6 
■Ves.9;  Clark  r.  Cock,  4  East,  57;  McEvers  v.  Mason,  10  Johns.  207; 
Greele  u.  Parker,  5  Wend.  414. 

«  Coffmau  V.  Campbell,  87  111.  98;  First  Nat.  Bank  v.  Clark,  61  Md. 
401;  Whilden  v.  Merchants',  etc,  Nat.  Bank,  64  Ala.  1;  Centi-al  Sav. 
Bank  v.  Richards,  109  Mass.  413. 

'  See  antCf  §  222. 

371 


§    226  ACCEPTANCE    OF    BILLS    OF    EXCHANGE.        [CH.  XI. 

without  knowledge  of  the  separate  acceptance  can  not  hold 
the  drawee  liable  on  it.' 

§  226.  Agreements  to  accept. — The  authorities  agree 
that  a  written  promise  to  the  drawer  to  accept  a  bill,  when 
communicated  to  the  holder,  will  have  the  same  effect,  and 
will  be  treated,  as  an  acceptance,  whether  the  bill  be 
already  in  existence,^  or  is  not   yet  executed. ^     In  both 

1  1  Parsons'  N.  &  B.  286 ;  Worcester  Bank  v.  Wells,  8  Met.  107;  McEv- 
ers  V.  Mason,  10  Johns.  207.  And  in  the  following  States^  this  is  made 
a  provision  of  the  statutes:  Arizona  (1877,  C.  L.,  §§  3469-3471)  ;  Arkan- 
sas (1374,  R.  S.,  §  550);  California  (1880,  1  Hittell's  Codes  «S;  Stats.,  § 
8196);  Dakota  (1877,  Rev.  Code,  §  1898);  District  of  Columbia  (1857,  R. 
C.  134,  §  7) ;  Idaho  (1874,  R.  L.  653,  §  7)  ;  Kansas  (1879,  C.  L.,  ch.  14, 
§§  9, 10) ;  Missouri  (1879,  R.  S.,  §§  536,  537) ;  JSTevada  (1873,  1  C.  L.,  ch. 
5,  §  7) ;  Neio  York  (1882,  3  R.  S.  2242). 

2  "  The  defendant  has  thereby  enabled  another  with  truth  to  assert, 
and  furnished  him  with  the  means  of  proving  that  assertion,  by  the  pro- 
duction of  the  defendant's  letter,  that  he  had  undertaken  to  accept  the 
bills,  which  in  ordinary  mercantile  understanding  amounts  to  an  accept- 
ance, and  by  that  credit  was  attached  to  the  bills.  *  *  *  It  may  be 
for  the  convenience  of  mercantile  affairs  that  a  bill  may  be  accepted  by 
a  collateral  writing,  without  the  bill  itself  coming  to  the  actual  touch  of 
the  acceptor,  which  would  sometimes  create  great  delay.  This  accept- 
ance being  by  writing  comes  within  all  the  cases  cited."  Lord  Ellen- 
borough  in  Clarke  v.  Cock,  4  East,  57.  See  also  Wilson  w.  Clements,  3 
Mass.  10;  Musgrove  v.  Hudson,  2  Stew.  4G4;  Storer  v.  Logan,  9  Mass. 
58;  Savannah  Nat.  Bank  v.  Hoskius,  101  Mass.  370;  Grant  v.  Shaw,  16 
Mass.  341;  McEvers  u.  Mason,  10  Johns.  213;  Wakefield  v.  Greenhood, 
29  Cal.  597;  Goodrich  v.  Gordon,  15  Johns.  6;  Grcele  v.  Parker,  5  Wend. 
514;  De  Tastett  v.  Crousillot,  2  Wash.  C.  C.  132;  Russell  v.  Wiggin,  2 
Story  0.  C.  214;  Mayfield  v.  Wheeler,  37  Tex.  256;  Cassel  w.  Dows,  1 
Blatchf.  C.  C.  335;  Edson  v.  Fuller,  2  Foster,  183;  Johnson  v.  Clark,  39 
N.  Y.  216;  Steman  v.  Harrison,  42  Pa.  St.  57;  Ulster  Co.  Bankw.  Mc- 
Farlan,  5  Hill,  432;  Ontario  Bank  v.  Worthington  Bk.,  12  Wend.  593; 
Vance  v.  Ward,  2  Dana,  95;  CarroUton  Bank  v.  Tayleur,  16  La.  (o.  s.) 
490;  Crowell  v.  Van  Bibber,  18  La.  Ann.  637;  Cook  v.  Miltenberger,  23 
La.  Ann.  377. 

3  <<  Upon  a  review  of  the  cases  which  are  reported,  a  letter  written 

within  a  reasonable  time  before  or  after  the  date  of  a  bill  of  exchange, 

describing  it  in  terms,  not  to  be  mistaken,  and  promising  to  accept  it,  is. 

If  shown  to  the  person  who  afterward  takes  the  bill  on  the  credit  of  the 

372 


CH.  XI.]        ACCEPTANCE    OF   BILLS    OF   EXCHANGE.  §    226 

classes  of  cases,  but  more  especially  in  the  case  of  non- 
existing  bills,  it  is  necessary  that  the  promise  to  accept 
must  describe  the  bills  to  be  accepted  particularly  enough 
to  ascertain  whether  the  bill  in  suit  was  intended  to  fall 
within  the  promise. ^  If  the  promise  is  of  a  gjeneral  or 
indefinite  character,  it  will  not  constitute  an  acceptance  ;  but 
if  the  refusal  to  accept  the  bill  in  question  is  proven  to  be 
a  breach  of  the  promise  to  accept,  the  promisor  can  be  sued 
for  the  breach  of   his  contract,   but  not  as  an  acceptor.^ 

letter,  a  virtual  acceptance."  Coolidge  v.  Payson,  2  Wheat.  66;  Schim- 
melpennich  u.  Bayard,  1  Pet.  264;  Boyce  v.  Edwards,  4  Pet.  Ill;  Gates 
V.  Parker,  43  Me.  644;  Wilson  v.  Clements,  3  Mass.  10;  Storer  v.  Logau, 
9  Mass.  58;  Goodrich  v.  Gordon,  15  Johns.  11 ;  Greele  v.  Parker,  5  Wend. 
414;  Kennedy  1?.  Geddes,  8  Porter  (Ala.),  268;  s.  c.  3  Ala.  581;  Whilden 
V.  M.  &  P.  N.  B.,  64  Ala.  30;  Lathrop  v.  Harlow,  23  Mo.  209;  Steman  v. 
Harrison,  42  Pa.  St.  57;  Valle  v.  Cerre,  36  Mo.  591;  Kendrick  v.  Camp- 
bell, 1  Bailey,  552;  Vance  v.  Ward,  2  Dana,  95;  Beach  v.  State  Bank,  2 
Ind.  488 ;  Wildes  v.  Savage,  1  Story  C.  C.  22 ;  Russell  v.  Wiggin,  2  Story 
C.  C.  214;  Johnson  v.  Blakemore,  28  La.  Ann.  140;  Mason  v.  Hunt,  I 
Doug.  297;  Merchants'  Bank  v.  Griswold,  16  N.  Y.  S.  C.  (9  Hun)  565.  A 
promise  to  accept,  sent  by  telegram,  has  been  held  to  have  the  same 
effect.  Molson's  Bank  of  Montreal  v.  Howard,  8  Jones  &  S.  156;  Central 
Saving  Bank  v.  Richards,  109  Mass.  414,  Morton,  J. :  "The  telegram 
sent  to  the  St.  Louis  Zinc  Company  was  an  authority  for  it  to  draw  the 
bill  of  exchange  in  suit,  and  necessarily  implied  a  promise  to  accept  it. 
This  telegram  was  shown  to  the  plaintiffs  who  thereupon  discounted  the 
bill.  They  took  the  bill  upon  the  faith  of  tlie  defendant's  promise,  and 
are  entitled  to  hold  them  as  acceptors." 

1  In  Franklin  Bank  v.  Lynch,  52  Md.  270,  the  telegraphic  communica- 
tion "  You  may  draw  on  me  for  $700,"  was  held  to  be  too  indefinite  to 
constitute  an  acceptance.  And  in  Boyce  v.  Edwards,  4  Pet.  Ill,  the 
communication  was :  "  Mr.  John  Doe  is  authorized  to  draw  on  us  for  the 
amount  of  any  lots  of  cotton  which  he  may  buy  and  ship  to  us,  as  soon 
after  as  opportunity  will  offer;  such  drafts  will  be  duly  honored,"  etc. 

2  Coolidge  V.  Payson,  2  Wheat.  66;  Schimmelpennich  v.  Bayard,  1 
Pet.  264 ;  Boyce  v.  Edwards,  4  Pet.  Ill ;  Ulster  County  Bank  v.  McFarland, 
3  Den.  553;  Carnegie  v.  Morrison,  4  Mete.  406;  Cassel  v.  Dows,  1  Blatch. 
C.  C.  335;  Von  Phul  t;,  Sloan,  2  Rob.  (La.)  148;  Carrollton  Bank  v.  Tay- 
leur,  16  La.  (o.  s.)  490.  In  an  action  for  the  breach  of  the  promise  to  accept, 
whatever  damage  the  holder  of  the  bill  actually  suffered,  not  exceeding 
the  amount  of  tke  bill  with  interest  and  costs,  may  be  recovered.    It 

373 


§    '22i]  ACCErTANCE    OF    HILLS    OF    i:\riIAXOE.        [CH.  XI. 

But  there  are  authorities  which  hold  that  no  nicety  of 
description  is  required  to  make  the  promise  to  accept  the 
equivalent  of  an  acceptance,  as  long  as  the  language  of  the 
promise  was  general  enough  to  include  the  bill  in  question.^ 

It  is  also  necessary,  in  the  case  of  non-existing  bills,  that 
they  be  drawn  within  a  reasonable  time  after  the  promise 
to  accept  was  given. ^ 

The  promise  to  accept  is  certainly  not  the  same  as  an 
acceptance,  and  it  can  only  operate  as  an  acceptance,  when 
the  refusal  to  accept  would  work  an  injury  to  one  who  took 
the  bill  in  reliance  upon  the  performance  of  the  promise. 
In  other  words,  in  such  a  case,  the  drawee  is  estopped  from 
denying  that  the  bill  had  not  been  accepted.  But  in  order 
that  the  drawer  may  be  estopped  by  his  promise  to  accept, 
the  promise  must  be  communicated  to  the  payee  or  holder, 

may  be  the  whole  amount  of  the  bill,  and  it  may  be  only  nominal.  Ils- 
ley  V.  Jones,  12  Gray,  2C0;  Riggs  v.  Lindsay,  7  Crauch,  500. 

>■  Bissell  V.  Lewis,  4  Mich.  450;  Parker  v.  Greele,  2  Wend.  545;  Vallc 
V.  Cerre,  36  Mo.  575;  Greele  v.  Parlcer,  5  Wend.  414;  Barney  v.  New- 
comb,  9  Cush.  46;  Naglee  r.  Lyman,  14  Cal.  451;  Bank  of  Michigan  r. 
Ely,  17  Wend.  508;  1  Daniel's  Negot.  Inst.,  §  561.  In  Ulster  County 
Bank  v.  McFarland,  5  Hill,  444;  3  Denio,  553,  where  a  letter  was  ad- 
dressed to  the  drawers  as  follows :  '*  I  hereby  authorize  you  to  draw  on 
me,  at  ninety  days,  from  time  to  time,  for  such  amounts  as  you  may  re- 
quire, provided  that  the  whole  amount  running  and  unpaid  shall  not 
exceed  three  thousand  dollars,"  etc.,  Bronsou,  J.,  citing  the  cases  given 
above,  said:  "These  cases  show  that  the  written  promise  to  accept 
need  not  contain  a  particular  description  or  identification  of  the  bill  to 
be  drawn.  It  is  enough  that  it  be  drawn  in  pursuance  of  the  authority. 
The  plaintiff  received  and  discounted  the  bill  upon  the  faith  of  the  letter, 
and  it  was  drawn  in  pursuance  of  the  authority;  the  judge  was  right  in 
charging  the  jury  that  there  was  a  sufficient  acceptance."  See  also  to 
same  effect.  Nelson  v.  First  Nat.  Bank,  48  111.  39,  where  the  promise  to 
pay  the  checks  of  the  drawer. 

2  Coolidge  V.  Paysou,  3  Wheat.  CG;  Wilson  v.  Clements,  3  Mass.  1; 
Cassel  V.  Dows,  1  Blatch.  C.  C.  335;  Greele  v.  Parker,  5  Wend.  414.  In 
Boyce  v.  Edwards,  4  Pet.  Ill,  the  bill  was  written  two  years  after  the 
promise,  and  in  First  Nat.  Bank  v.  llensiey,  2  Fed.  Rep.  G09,  one  year 
after,  and  in  both  cases  the  delay  was  held  to  be  unreasonable. 
374 


CH.  XI.]        ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  §    226 

and  the  holder  must  take  the  bill  in  reliance  upon  the 
drawee's  promise  to  accept.  And  this  is  the  ruling  of  most 
of  the  cases. ^  But  there  are  a  few  cases,  which  hold 
that  a  written  promise  to  accept  will  operate  as  an  accept- 
ance in  favor  of  a  holder  who  did  not  know  of  the  promise 
when  he  took  the  bill,  and  consequently  could  not  have 
taken  the  bill  in  reliance  upon  the  promise.'^ 

In  those  States,  in  which  there  are  no  statutes  to  the  con- 
trary, a  verbal  promise  to  accept,  like  a  verbal  acceptance, 
is  as  binding  as  a  written  promise. "^  It  is  however  held, 
rather  uniformly,  that  in  order  that  a  verbal  promise  can 
operate  as  an  acceptance,  it  must  be  communicated  to  the 
holder,  before  he  takes  the  bill.*     But  it  is  held  that  in  no 

1  Goodrich  v.  Gordon,  15  Johns.  6;  Pierson  v.  Dunlap,  2  Cowp.  571; 
Wilson u.  Clements,  3  Mass.  10;  Storer  v.  Logan,  9  Mass.  68;  Paysou  v. 
Coolidge,  2  Wheat.  66;  Gates  u.  Parker,  43  Me.  544;  New  York,  etc., 
Bank  v.  Gibson,  5  Duer,  574;  McEvers  v.  Mason,  10  Johns.  207;  Lewis 
V.  Ej-amer,  3  Md.  289;  Pollock  v.  Helm,  54  Miss.  1;  Baring  v.  Lyman,  1 
Story  C.  C.  396;  Kennedy  v.  Geddes,8  Port.  (Ala.)  268;  Sherwin  v.  Bing- 
ham, 39  Ohio  St.  137;  Loque  v.  Woodruff,  28  Ga.  649;  Bank  of  St.  Louis 
V.  Rice,  98  Mass.  288 ;  s.  c.  107  Mass.  41 ;  Burns  v.  Rowland,  40  Barb.  368. 

2  Powell  V.  Mounier,  1  Atk.  611;  Wynne  v.  Raikes,  5  East,  514;  Pil- 
an  V.  Mierop,  3  Burr.  1663;  Jones  v.  Bank  of  Iowa,  34  111.  313;  Mason 
V.  Dousay,  35  111.  424  .  In  Read  v.  Marsh,  5  B.  Mon.  10,  Breck,  J.,  said: 
"  It  seems  to  be  now  well  settled  that  a  letter,  promising  to  accept  or 
protect  a  bill,  whether  written  before  or  after  it  is  drawn,  may  operate 
as  an  acceptance,  and  that  it  may  so  operate,  although  the  holder  has 
not  been  induced  by  such  letter  or  promise  to  take  the  bill." 

3  Johnson  v.  Callings,  1  East,  98;  Townsley  w.  Sumrall,  2  Pet.  170; 
Bank  of  Ireland  v.  Archer,  11  M.  &  W.  383;  Kennedy  v.  Geddes,  8  Port. 
(Ala.)_268;  Spaulding  v.  Andrews,  48  Pa.  St.  411;  Scudder  t^.  Union  Nat. 
Bank;  91  U.  S.  406;  Light  v.  Powers,  13  Kan.  96.  But  in  many  of  the 
States  statutes  prohibit  all  parol  promises  to  accept.  Blakiston  v. 
Dudley,  5  Duer,  373;  Brinkman  v.  Hunter,  73  Mo.  172;  R.  S.  Mo.  (1879), 
§  537  See  ante,  §  222,  for  statutes  prohibiting  all  verbal  acceptances  and 
for  a  discussion  of  relation  of  statute  of  frauds  to  acceptances. 

*  Johnson  v.  Collings,  1  East,  98;  Boyce  v.  Edwards,  4  Pet.  122; 
Espy  V.  Bank  of  Cincinnati,  18  Wall.  620 ;  Oberman  v.  Hobokeu  City 
Bank,  2  Vroom,  564;  Wilson  v.  Clements,  3  Mass.  10;  Strohecker 
V.  Cohen,  1  Spears,  327;  Bank  of  Michigan  v.  Ely,  17  Wend.  508.  But 
see  contra,  Spaulding  v.  Andrews,  48  Pa.  St.  411. 

375 


§    227  ACCEPTANCE    OF    BILLS    OF    EXCHANGE.         [CH.   XI. 

event  can  the  promise  to  accept  be  treated  as  an  accept- 
ance, where  the  bill  is  one  payable  at  or  after  sight,  for  the 
reason  that  there  must  be  a  presentment  in  order  to  fix  the 
day  of  payment ;  ^  and  a  mere  promise  to  accept,  with- 
out more,  would  cover  only  bills  payable  at  the  drawee's 
place  of  business. 2 

§  227.  Conditional    and    qualified   acceptance. — The 

holder  is  entitled  to  an  absolute  and  unconditional  accept- 
ance, according  to  the  tenor  of  the  bill ;  and  if  a  conditional 
or  qualified  acceptance  is  offered  in  its  place,  the  holder  may 
refuse  it  and  protest  the  bill  for  non-acceptance.^  The 
holder  may,  however,  take  a  conditional  or  qualified  accept- 
ance, if  he  wishes  ;  but  if  he  does,  he  must  at  once  notify 
the  drawer  and  indorsers  and  obtain  their  consent  to  the 
modification  in  the  acceptance.     If  he  takes  the  conditional 

1  story  on  Bills,  §  249;  Edwards  on  Bills,  414;  Wildes  v.  Savage,  1 
Story  C.  C.  28;  Franklin  Bank  v.  Lynch,  52  Md.  270. 

2  Michigan  State  Bank  v.  Leavenworth,  28  Vt.  209. 

3  Boehm  v.  Garcias,  1  Camp.  425;  Gammon  v.  Schmall,  5  Taunt.  -344; 
Parker  u.  Gordon,  7  East,  385;  Shaver  v.  Western  Union  Tel.  Co.,  57  N. 
Y.  459;  Shackleford  t;.  Hooker,  54  Miss.  71G;  Ford  v.  Angelrodt,  37  Mo. 
50;  Green  V.  Raymond,  9  Neb.  298.  In  Boehra  v.  Garcias,  1  Camp.  425, 
the  bill  was  drawn  on  Lisbon  "  payable  in  effective  and  not  in  val  reals." 
The  drawee  offered  to  accept  payable  in  val  demaros,  another  kind  of 
currency.  In  holding  this  to  be  a  conditional  or  qualified  acceptance, 
Lord  Ellenborough  said:  "The  plaintiff  had  a  right  to  refuse  this  ac- 
ceptance ;  the  drawee  has  no  right  to  vary  the  acceptance  from  the  terras 
of  the  bill,  unless  they  be  unambiguously  and  unequivocally  the  same. 
Therefore,  without  considering  whether  a  payment  in  demaros  might 
have  satisfied  the  term  effective,  an  acceptance  in  demaros  was  not  asuffic- 
ient  acceptance  of  the  bill  drawn  payable  in  effective.  The  drawee 
ought  to  have  accepted  generally,  and  an  action  being  brought  against 
them  on  the  general  acceptance  the  question  would  probably  have  arisen 
as  to  the  meaning  of  the  term.  A  general  protest  or  notice  of  non-ac- 
ceptance would  indicate  a  refusal  of  the  conditional  acceptance,  and  pre- 
clude him  from  afterward  availing  himself  of  it  (Sproat  tJ.  Matthews, 
1  T.  R.  182;  Bentinck  v.  Dorrien,  G  East,  200),  unless  it  can  be  shown 
that  he  did  not  know  of  the  conditional  acceptance,  when  he  protested 
the  bill."     Fairlie  v.  Herring,  3  Bing.  625;    11  Moore,  520. 

376 


CH.  XI. J         ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  §    227 

or  qualified  acceptance  against  the  consent  of  the  parties  sec- 
ondarily liable,  he  does  so  at  his  risk.^ 

The  rule  just  stated  is  certainly  true  under  ail  circum- 
stances in  respect  to  indorsers.^  But  it  is  claimed  that  the 
drawer  impliedly  guarantees  that  the  drawee  is  in  funds 
wherewith  to  pay  the  bill,  and  consequently  if  the  drawee 
accepts  on  condition  that  he  is  in  funds,  it  is  not  a  condi- 
tional acceptance  as  to  the  drawer,  and  the  drawer's  con- 
sent to  such  an  acceptance  need  not  be  obtained.^ 

A  verbal  acceptance  may  be  subjected  to  conditions,  like 
a  written  acceptance,*  but  the  condition  must  be  made  con- 
temporaneous with  the  acceptance.  The  character  of  the 
acceptance  cannot  be  varied  by  a  subsequent  agreement.^ 
If  the  acceptance  is  written,  it  may  be  varied  by  another 
contemporaneous  writing,  and  this  condition  will  be  as 
binding  as  if  it  had  been  incorporated  into  the  written  ac- 
ceptance, except  as  against  bona  fide  holders  who  take  the 
bill  without  notice  of  it.^  But  a  written  acceptance  cannot 
be  varied  by  any  contemporary  parol  agreement.^ 

1  Petit  V.  Benson,  Cumberbach,  452;  Julian  v.  Shorbrook,  2  Wills.  9; 
Andersons.  Hick,  3  Camp.  179;  Paton  v.  Winter,  1  Taunt.  422;  Robin- 
son v.  Ames,  20  Johns.  146;  Russell  v.  Phillips,  14  Q.  B.  900;  Smi^h  u. 
Abbott,  2Str.  1152.  Mitchells.  Barring,>0  B.  &  C.  4;  Sebag  v,  Abithol, 
4  M.  &  Sel.  462;  Wintersmith  v.  Post,  4  Zab.  420;  Shackleford  v.  Hooker, 
54  Miss.  716;  McCutchen  v.  Rice,  56  Miss.  455;  Ford  v.  Angelrodt,  37 
Mo.  50;  Crowell  v.  Plant,  53  Mo.  145, 

-  Edwards  on  Bills,  428,  430;  1  Daniel's  Negot.  Inst.,  §  511. 

3  Walkers.  Bank  of  the  State,  13  Barb.  636;  Edwards  on  Bills,  429; 
Robinson  v.  Ames,  20  Johns.  146. 

<  1  Daniel's  Negot.  Inst.,  §  517;  Edwards  on  Bills,  426. 

fi  Wells  V.  Brigham,  6  Cush.  6. 

^  Bowerbank  v.  Monteiro,  4  Taunt.  884 ;  Montague  v.  Perkins,  22  Eng. 
L.  &  Eq.  516;  United  States  u.  Bank  of  Metropolis,  15  Pet.  377;  Merritt 
V.  Duncan,  7  Heisk.  156. 

^  Hoare  v.  Graham,  3  Camp.  57;  Adams  v.  Wordley,  1  M.  &  W.  347; 
Besautv.  Cross,  IOC.  B.  (70  Eng.  C.  L.)  896;  Meyer  v.  Beardsley,  1  Vroom, 
236;  Foster  v.  Clifford,  44  Wis.  569;  Goodwin  v.  McCoy,  13  Ala.  271 ; 
Hunting  v.  Emmart,  55  Md.  265;  Haverin  v.  Donuell,  7  Smed.  &  M.  244; 
Coffman  v.  Campbell,  87111.  98. 

377 


§    227  ACCEPTANCE    OF    BILLS    OF    EXCHANGE.        [CH.   XI. 

The  drawer  may,  in  drawing  the  bill,  call  for  a  conditional 
acceptance,  and  in  such  a  case  nothing  but  this  conditional 
acceptance  would  be  according  to  the  tenor  of  the  bill,  and 
therefore  no  other  would  be  binding  on  the  drawer  and 
indorsers.^ 

The  following  may  be  mentioned  as  illustrative  examples 
of  conditional  and  qualified  acceptances:  "To  pay  when 
goods  consigned  to  me  are  sold  ;"  ^  "to  pay  as  remitted 
for  :  "  ^  "to  pay  when  cargo  of  equal  value  is  consigned 
to  me;  "*  "payable  when  house  is  ready  for  accept- 
ance;"* "accepted  payable  on  giving  up  a  bill  of  lad- 
ing; "  ^  "  acceptance  payable  at  a  different  time  from  that 
named  in  the  bill;  "  ^  <'  payable  at  a  different  place  from 
that  named  in  the  bill."  ^ 

It  has  been  held  in  England  that,  in  the  absence  of  stat- 
utory regulations,  an  acceptance  payable  at  a  particular 
place,  'when  the  bill  did  not  specify  any  place,  was  a 
conditional  acceptance,  because  the  bill  was  not  payable 
anywhere  else;  ^  but  in  the  United  States,  it  has  been  gen- 
erally held  that  such  an  acceptance  is  not  a  conditional 
acceptance,  beyond  the  necessity  of  presenting  the  bill  at 
the  place  named,  to  save  costs  and  interest,  unless  it  is 
expressly   provided  thati,  the  bill  shall   be  payable  at  no 

1  See  Newhall  v.  Clark,  3  Cush.  376;  Kemble  v.  Lull,  3  McLean,  272; 
Crowellv,  Plaut,  53  Mo.  145. 

2  Smith  V.  Abbott,  2  Stra.  1152, 

3  Banbury  v.  Bassett,  2  Stra.  1211. 
*  Mason  v.  Hunt,  2  Doug.  297. 

«  Cook  V.  "Wolfeudalc,  105  Mass.  401. 

6  Smith  V.  Vertue,  30  L.  J.  C.  P.  5G;  9  C.  B.  (99  E.  C.  L.  R.)214. 
'  Green  u.  Raymond,  9  Neb.  205;  Wylic  v.  Bryce,  70  N.  C.  426;  Russell 
V.  Phillips,  14  Q.B.  891;  Clarke  v.  Gordon,  3  Rich.  311. 

8  Niagara  Bank  v.  Fairraan  Co.,  31  Barb.  403. 

9  RoTve  V.  Young,  2  Brod.  &  Bing.  1C5;  2  Bligh,  391.  It  is  now 
changed  by  statute,  1  and  2  Geo.  IV.,  so  that  itdoes  not  constitute  a  con- 
ditional acceptance,  unless  it  is  expressly  stated  to  be  payable  at  a  par- 
ticular place  and  nowhere  else.     Ilalstead  v.  Skelton,  5  Ad.  &  El.  86. 

378 


CH.  XI.  J        ACCEPTANCE   OF   BILLS    OF   EXCHANGE.  §    227 

other  place. ^  A  bill,  addressed  to  a  drawee  generally,  may 
be  accepted  payable  at  a  particular  bank,  without  making  it 
a  conditional  or  qualified  acceptance  of  such  a  character  as 
to  require  the  consent  of  the  drawer  and  indorsers.^ 
An  acceptance  payable  "  when  in  funds,"  or  in  words  of 
similar  import,  makes  the  drawee  liable  only  when  he  is  in 
possession  of  funds,  which  he  is  authorized  to  apply  to- 
wards the  payment  of  the  bill.^  If  the  funds  are  not  re- 
ceived before  the  death  of  the  acceptor,  but  are  received 


1  Wallace  v.  McConnell,  13  Pet.  136;  Foden  v.  Sharp,  4  Johns.  183  j 
Blair  v.  Bank  of  Tenn.,  11  Humph.  84.  See  Cox  v.  National  Bank,  100  U. 
S.  714;  Yeaton  v.  Bemey,  62  111.  61;  Schoharie  Co.  Nat.  Bank  v.  Bevard, 
61  Iowa,  258;  Baltzer  v.  Kansas  P.  K.  R.  Co.,  3  Mo.  App.  574;  Armistead 
V.  Armistead,  10  Leigh,  525;  Ruggles  v.  Patten,  8  Mass.  480;  Caldwell 
V.  Cassidy,  8  Cow.  271;  Hills  v.  Place,  48  N.  Y.  520;  Thiel  v.  Conrad,  21 
La.  Ann.  214;  Renshaw  u.  Richards,  30  La.  Ann.  398;  McNairy  v.  Bell, 
1  Yerg.  502 ;  McCulloch  v.  Cook,  34  Ind.  334 ;  Reeve  v.  Pack,  6  Mich. 
240;  Howard  v.  Bowman,  17  Wis.  459.  Professor  Parsons  says  (1  Par- 
sons' N.  &  B.  309,  310,  311)  :  •'  If  a  bill  were  accepted  '  payable  only  at 
such  a  place,'  it  would  be  so  entirely  conditional  under  the  English 
statutes,  that,  if  not  demanded  there,  the  acceptor  would  not  be  liable 
at  all.  We  think  this  should  be  the  rule  in  the  United  States,  on  the 
ground  that  such  words  are  equivalent  to  'accepted,  provided  that,' or 
'on  condition  that;  '  but  it  is  not  certain  that  a  bill  accepted  with  the 
word  'only'  or  possibly  with  express  words  of  condition,  might  not  be 
held  by  some  courts  as  binding  the  acceptor  to  the  amount  of  the  bill,  but 
discharging  him  from  interest  and  costs,  if  he  had  funds  at  the  proper 
place  at  the  maturity  of  the  bill,  by  which  it  would  then  and  there  have 
been  paid.  For  a  full  discussion  of  the  effect  of  such  acceptances,  in 
respect  to  presentment  for  payment,  see  post,  chapter  on  Presentment 
for  Payment. 

2  Troy  City  Bank  v.  Lauman,  19  N.  Y.  477;  Niagara  Bank  v.  Fairman 
Co.,  31  Barb.  403;  Meyers  v.  Staudart,  11  Ohio  St.  29. 

3  Marshall  v.  Claiy,  44  Ga.  513;  Browne  v.  Coit,  1  McCord,  408;  Win- 
termute  v.  Post,  4  Bab.  420;  Owen  v.  Iglanor,  4  Cold.  15;  Hunter  v. 
Ingraham,  1  Strob.  271;  Stevens  v.  Androscoggin  Water  Power  Co.,  62 
Me.  498;  Perry  v.  Harrington,  2  Met.  368;  Ray  v.  Faulkner,  73  111.  469. 
"Funds"  means  "  cash,"  and  he  will  consequently  not  be  liable  on  his 
acceptance,  if  he  should  have  available  securities  out  of  which  money 
may  be  realized,  until  the  money  has  been  actually  realized.  Campbell 
».  Pettingill,  7  Greenl.  126;  Carlisle  v.  Hooks,  7  Me.  129. 

379 


§    228  ACCEPTANCE    OF    BILLS    OF    EXCHANGE.        [CH.  XI. 

by  his  personal  representative  after  his  death,  the  personal 
representative  will  be  bound  by  the  acceptance.^  In  the 
same  manner,  the  drawer  cannot  be  sued  on  the  bill,  until 
the  drawee  has  refused  payment  after  he  has  been  in  re- 
ceipt of  funds. ^ 

Wherever  the  terms  of  the  condition  are  ambiguous  and 
uncertain  of  meaning,  parol  evidence  is  admissible  to  ex- 
plain the  meaning  of  the  terms. ^ 

It  is  necessary,  in  a  suit  against  the  drawer,  to  aver  and 
prove  that  he  had  known  and  had  given  his  consent  to  the 
conditional  acceptance.*  And  in  all  suits  upon  bills  ac- 
cepted conditional!}',  it  is  incumbent  upon  the  holder  to 
prove  the  performance  of  the  condition  ;  ^  but  when  the 
condition  is  not  incorporated  Into  the  written  acceptance, 
and  appears  in  a  separate  paper,  the  burden  of  proving 
the  condition  is  upon  the  acceptor.^ 

§   228.  Acceptances   for    honor,    or    supra    protest.  — 

Another  kind  of  conditional  acceptance,  which  deserves  a 
separate  consideration  on  account  of  distinguishing  charac- 
teristics, is  the  acceptance  for  honor,  or  supra  protest. 
When  the    drawee    or  drawees,  named  in  the    bill,  have 

1  Galley  v.  Prindle,  14  Barb.  18G;  Swansey  v.  Breck,  10  Ala.  533; 
Owen  V.  Iglanor,  4  Cold.  15. 

*  Campbell  v.  Pettingill,  7  Greenl.  126;  Knox  v.  Reeside,  1  Miles,  294; 
Gallery  v.  Prindle,  14  Barb,  186;  Andrews  v.  Baggs,  Minor,  173. 

3  Gallagher  v.  Black,  44  Me.  99,  Swan  v.  Cox,  1  Marsh.  179;  Lamon 
V.  French,  25  Wis.  37;  Shackleford  v.  Hooker,  54  Miss.  71G;  U.  S.  v.  Bank 
of  Metropolis,  15  Pet.  377. 

•*  Taylor  v.  Newman,  77  Mo.  257. 

fi  Andrews  v.  Baggs,  Minor,  173,  Knox  v.  Reeside,  1  Miles,  294;  At- 
kinsons. Manks,  1  Cow.  691;  Owen  v.  Lavine,  14  Ark.  389;  Read  v.  Wil- 
kinson, 2  Wash.  C.  C.  514;  First  Nat.  Bank  v.  Bensley,  2  Fed.  Rep.  609; 
Marshall  v.  Clary,  44  Ga.  511;  Nagle  v.  Homer,  8  Cal.  353;  Ford  v.  Au- 
gelrodt,  37  Mo.  50. 

«  Thomas  v.  Bishop,  Cas.  Temp.  Hardw.  1 ;  Clarke  v.  Cocke,  4  East, 
57;  Mason  v.  Hunt,  Dougl.  296;  Kaines  v.  Knightly,  Skin-.  54;  Bower- 
bank  V.  Monteiro,  4  Taunt.  846,  37  Mo.  50. 

380 


CH.  XI.]        ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  §    228 

refused  to  accept  and  the  bill  has  been  protested  for  non- 
acceptance,  and  notice  given  to  all  the  parties  to  the  bill, 
any  third  person  may  accept  it  for  the  honor  of  one  or 
more  of  the  parties  to  the  bill.^  But  there  can  be  no 
acceptance  for  honor,  until  there  has  been  a  presentment 
to  the  original  drawee,  and  notice  and  protest  of  non-accept- 
ance. For  this  reason  the  acceptance  for  honor  is  some- 
times called  acceptance  supra  protest.  This  acceptance 
enures  to  the  benefit  of  all  the  parties  for  whose  honor  the 
bill  was  accepted.^  Although  there  can  not  be  successive 
acceptors  before  protest,  there  may  be  as  many  acceptors 
for  honor,  as  there  are  parties  to  the  bill;  for  example, 
one  may  accept  for  the  honor  of  the  drawee,  another  for 
the  honor  of  the  drawer,  another  for  the  first  indorser, 
another  for  the  second  indorser,  etc.^  But  one  may  ac- 
cept for  the  honor  of  two  or  more,  and  even  all,  of  the 
parties ;  and  in  his  acceptance  it  should  be  stated  for  whose 
honor  it  is  given.*  If  it  is  not  stated  for  whose  honor  the 
bill  has  been  accepted,  it  is  presumed  to  have  been  ac- 
cepted for  the  honor  of  the  drawer.^ 

The    holder  is    not   bound   to    take    an  acceptance  for 

^  The  original  drawee  may  himself  accept  for  honor  of  one  of  the 
parties,  if  he  should  not  care  to  accept  for  the  whole  bill.  But  that  is 
only  possible,  when  the  drawee  is  under  no  obligation  to  accept.  If  he 
is  under  such  an  obligation,  he  cannot  change  it  by  refusing  to  accept 
in  the  first  instance,  and  then  accepting  for  honor.  Schimmelpennich  v. 
Bayard,  1  Pet.  264-;    Story  on  Bills,  §  259. 

^  Hussey  v.  Jacob,  1  Ld.  Raym.  88 ;  Ex  parte  Wackerbath,  5  Ves.  574 ; 
Jackson  tj.  Hudson,  2  Campb.  447;  Davis  v.  Clarke,  6  Q.  B.  16;  Jenkins 
V.  Hutchinson,  13  Q.  B.  744;  Eastwood  v.  Bain,  3  H.  &  N.  738;  Hoare  v. 
Cazenove,  16  East,  391;  Konig  v.  Bayard,  1  Pet.  250;  May  v.  Kelley,  27 
Ala.  497;  Markham  u.  Hazen,  48  Ga.  570;  "Walton  v.  "Williams,  44  Ala. 
347. 

^  Chitty  on  Bills,  375;  1  Parsons'  N.  &  B.  315;  Jackson  v.  Hudson,  2 
Camp.  447;  Byles  on  Bills,  [*255]  403. 

■*  Hussey  v.  Jacob,  1  Ld.  Raym,  88;  Lewin  v.  Brunette,  1  Lutw.  896; 
Gazzamv.  Armstrong,  3  Dana  552;  1  Parsons'  N.  &B.  313. 

«  Chitty  on  Bills,  [*346]  387;  1  Parsons'  N.  &B.  313. 

381 


§    22>'<  ACCKI'TAXCE    OF    15ILI.S    OF    KXCHAXGE.        [CH.  XI. 

honor  ;^  but  if  he  does,  he  can  not  sue  an}'  of  the  parties, 
for  whose  honor  the  bill  had  been  accepted,  until  it  has 
matured  and  payment  has  been  refused  by  the  acceptor  for 
honor. - 

In  order  to  make  a  proper  acceptance  for  honor,  the  ac- 
ceptor nuist  api)ear  before  a  notary  public,  declare  his 
intention  to  accept  for  the  honor  of  some  one  or  more  of 
the  parties  to  the  bill,  and  subscribe  his  name  to  some  such 
words  as  "  accepted  sujji^a  pi'otest  for  the  honor  of  A."  ^ 

The  acceptance  for  honor  is  not  absolute.  As  already 
stated,  it  is  a  conditional  acceptance;  and  the  acceptor  is 
only  liable  when  all  the  implied  conditions  have  been  per- 
formed.* In  order  to  make  such  an  acceptor  liable,  the 
bill  must  be  again  presented  to  the  drawee  at  maturity, 
notwithstanding  his  refusal  to  accept,  so  that  he  might  pay 
the  bill,  if  he  saw  reasons  for  changing  his  previous  de- 
termination.^    If  he  refused,  the   bill  should  be  protested 

1  Gregory  v.  Walcup,  1  Comyns  7G;  Mitford  v.  Walcott,  12  Mod.  410; 
Ld.  Raym.  575;  Pillans  v.  Van  Mierop,  3  Burr.  1G63. 

2  Williams  v.  Germain,  7  B.  &  C.  4G8;   1  Man.  &  R.  394. 

3  Byles  on  Bills,  [*2G5]  402;  Chitty  on  Bills,  [*34G]  386;  1  Daniel's 
Negot.  Inst.,  §  523.  The  form  is  sometimes,  "  Accepted,  under  protest, 
for  honor  of  A.  &B.,  and  will  be  paid  for  their  account,  if  regularly  pro- 
tested and  refused  when  due."  Mitchell  v.  Baring,  10  B.  &  C.  4 ;  4  C.  & 
P.  35. 

*  Lord  Teuterdeu  says,  such  an  acceptance  "  is  to  be  considered  not 
as  absolutely  such,  but  in  the  nature  of  a  conditional  acceptance.  It  is 
equivalent  to  saying  to  the  holder  of  the  bill,  '  keep  this  bill,  don't  re- 
turn it,  and  when  the  time  arrives  at  which  it  ought  to  be  paid,  if  it  be 
not  paid  by  the  party  on  whom  it  was  originally  drawn,  come  to  me  and 
you  shall  have  your  money.'"  Williams  v.  Germaiue,  7  B.  &  C.  457;  1 
M.  &  R.  304. 

5  In  Hoare  v.  Cazenove,  16  East,  391,  Lord  Ellenborough  said:  "  It 
(the  acceptance  for  honor)  is  an  undertaking  to  pay  if  the  original 
drawee,  upon  a  presentment  to  him  for  payment,  should  persist  in  dis- 
honoring the  bill,  and  such  dishonor  by  him  be  notified  by  protest  to  the 
person  who  has  accepted  for  honor.  *  *  *  Indeed  the  reason  of  the 
thing,  as  well  as  the  strict  law  of  the  case,  seems  to  render  a  second 
resort  to  the  drawee  proper,  when  the  unaccepted  bill  remains  with  the 
382 


CH.  XI.]        ACCEPTAXCE    OF    BILLS    OF    EXCHANGE.  §    228 

for  non-payment,  and  then  presented  to  the  acceptor  for 
honor, ^  And  if  the  acceptor  for  honor  refused  to  pay  the 
bill,  it  should  be  again  protested,  and  in  this  protest,  all 
the  steps  that  had  been  taken  to  secure  the  payment  of  the 
bill  should  be  stated,  and  then  notice  should  be  given  to  all 
the  parties  for  whose  honor  the  bill  had  been  accepted. ^ 
If  the  bill  is  payable  at  a  certain  time  after  sight,  and  it  is 
accepted  for  honor,  the  time  runs  from  the  day  of  the 
acceptance,  and  not  from  the  date  of  presentment  to  the 
drawee.^  In  order  that  the  acceptor  may  have  recourse 
against  the  party  for  whose  honor  he  has  accepted,  he  must 
have  notified  such  party  of  his  acceptance  for  his  honor, 
as  well  as  of  his  payment  of  the  bill,  and  these  notices 
must  be  sent  within  a  reasonable  time  thereafter.*  The  ac- 
ceptor then  has  recourse  against  the  parties  for  whose  honor 
he  accepts,  and  all  those  who  are  liable  to  these  parties.^ 

But  he  will  have  no  recourse  against  any  other  of  the 
parties,  such  as  subsequent  indorsers.  If  he  accepts  for 
the  honor  of  the  drawer,  he  will  have  recourse  only  against 
him;   and  if  he  accepts  for   the  honor  of  an  indorser,  he 

holder;  for  effects  often  reach  the  drawee  who  has  refused  acceptance 
in  the  first  instance,  out  of  which  tlie  bill  may  and  would  be  satisfied, 
if  presented  to  him  again,  when  the  period  of  payment  had  arrived. 
And  the  drawer  is  entitled  to  the  chance  of  benefit  to  arise  from  such 
second  demand,  or  at  any  rate  to  the  benefit  of  that  evidence  which  the 
protest  affords,  that  the  demand  has  been  made  duly  without  effect,  as 
far  as  such  evidence  may  be  available  to  him  for  purposes  of  ulterior 
resort."  If  this  second  presentment  is  omitted,  it  will  discharge  the 
•  acceptor  for  honor,  as  well  as  all  the  parties  for  whose  honor  he  had 
accepted.  Story  on  Bills,  §  261;  Schofield  v.  Bayard,  3  Wend.  488; 
Barry  v.  Clark,  19  Pick.  220. 

1  Story  on  Bills,  §  261 ;  Chitty  on  Bills,  [*348,  350,  351]  389,  390,  392. 

2  Chitty  on  Bills,  [*352]  393;   1  Parsons'  N.  &  B.  320. 

3  Williams  v.  Germaine,  7  B.  &  C.  468;   1  M.  &  R.  394,  403. 

*  Story  on  Bills,  §  259;  1  Daniel's  Negot,  Inst.,  §  523;  Barry  v.  Clark, 
19  Pick.  220;  Schofield  v.  Bayard,  3  Wend.  488;  Wood  v.  Pugh,  7  Ohio, 
pt.  n.,  156. 

5  Goodall  V.  Polkill,  1  C.  B.  233;   1  Daniel's  Negot.  Inst.,  §  526. 

383 


§    230  ACCEPTANCE    OF    BILLS    OF    EXCHANGE.        [CH.   XI. 

will  have  recourse  af];ainst    the  drawer  anil    all    prior  in- 
dorsers,  but  not  against  a  subsequent  indorser.^ 

§  229.  Protest  for  better  security.  — Another  kind  of 
acceptance  for  honor  is  that  which  is  given  in  consequence 
of  a  protest  for  better  security.  It  is  very  uncommon,  but 
it  is  feasible,  if  resorted  to,  in  any  part  of  England  or  of 
the  United  States.  Whenever  the  acceptor  absconds  or 
becomes  bankrupt  before  the  maturity  of  the  bill,  the 
holder  can  protest  the  bill  at  once  for  better  security,  and 
if  the  drawer  and  indorsers  choose  to  do  so,  they  may  fur- 
nish additional  security,  in  the  way  of  a  second  acceptance 
or  guaranty. 2 

§  230.  What  acceptance  admits.  —  In  accepting  a  bill 
the  drawee  admits  the  genuineness  of  the  drawer's  signa- 

1  "We  are  decidedly  of  the  opinion  that  he  (the  acceptor  for  honor) 
acquired  no  demand,  or  right  of  action,  against  any  party  subsequent  to 
the  one  for  whom  he  made  the  payment,  and  that,  even  as  against  the 
preceding  parties,  he  was  only  substituted  to  the  rights  of  that  party 
in  the  same  condition  as  if  he  paid  the  bill  himself."  Marshall,  J.,  ia 
Gazzam  v.  Armstrong,  3  Dana,  554. 

2  Mr.  Chitty  says:  "  The  custom  of  merchants  is  stated  to  be,  that  if 
the  drawee  of  a  bill  of  exchange  abscond  before  the  day  when  the  bill  is 
due,  the  holder  may  protest  it,  in  order  to  have  better  security  for  the 
payment,  and  should  give  notice  to  the  drawer  and  indorsers  of  the 
absconding  of  the  drawee;  and  if  the  acceptor  of  a  foreign  bill  become 
bankrupt  before  it  is  due,  it  seems  that  the  holder  may  also,  in  such 
case,  protest  for  better  security;  but  the  acceptor  is  not,  on  account  of 
the  bankruptcy  of  the  drawee,  corapeilable  to  give  thi-s  security.  The 
neglect  to  make  this  protest  will  not  affect  the  holder's  remedy  against 
the  drawer  and  indorsers;  and  its  principal  use  appears  to  be  that,  by 
giving  notice  to  the  drawers  and  indorsers  of  the  situation  of  the  ac- 
ceptor, by  which  it  is  become  improbable  that  payment  will  be  made, 
they  are  enabled  by  other  means  to  provide  for  the  payment  of  the  bill 
when  due,  and  thereby  prevent  the  loss  of  re-exchange,  etc.,  occasioned 
by  the  return  of  the  bill.  It  may  be  recollected  that,  though  the  drawer 
or  indorsers  refuse  to  give  better  security,  the  holder  must,  neverthe- 
less, wait  till  the  bill  be  due  before  he  can  sue  either  of  those  parties." 
Chitty  on  Bills,  ['344]  385.     See  also  Ex  parte  Wackerbath,  5  Ves.  574. 

384 


CH.  XI.]        ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  §    230 

ture,  for  he  is  presumed  to  know  the  signature  of  one  who 
calls  on  him  to  pay  out  money  for  him,  and  he  is  therefore 
estopped  from  showing,  in  any  action  against  him,  that  the 
drawer's  signature  was  a  forgery.^  And  the  acceptance 
admits  the  agent's  signature  and  authority  to  sign  for  the 
drawer,  where  the  bill  was  drawn  by  procuration. ^  But  it 
has  been  claimed  in  a  late  case,  with  much  show  of  reason 
therefor,  that  the  drawee  is  only  estopped  from  denying 
the  agent's  signature  and  authority,  in  any  action  by  a 
boiia  fide  transferee ;  and  that  the  estoppel  does  not  apply 
to  actions  by  the  original  payee. ^ 

1  Wilkinson  v.  Lutwidge,  I  Strange,  648;  Jeuys  v.  Fawler,  2  Stra. 
946;  Smith  v.  Chester,  1  T.  R.  654;  Leach  v.  Buchanan,  4  Esp.  226;  Price 
V.  Neal,  3  Burr.  1354;  Sanderson  v.  Coleman,  4  Man.  &  G.  209;  Wilkinson 
V.  Johnson,  3  B.  &  C.  428;  Bank  of  U.  S.  v.  Bank  of  Georgia,  10  Wheat. 
333;  Hortsman  v.  Henshaw,  11  How.  177;  Ploffman  &  Co.  v.  Milwaukee, 
12  Wall.  193;  Bank  of  Commerce  v.  Union  Bank,  3  Comst.  235;  Goddard 
V.  Merchants'  Bank,  4  Comst.  147;  Nat.  Park  Bank  v.  9th  Nat.  Bank, 
46  N.  Y.  77;  White  v.  Continental  Nat.  Bank,  64  N.  Y.  316;  Canal  Bank 
V.  Bank  of  Albany,  1  Hill,  287;  Levy  v.  Bank  of  U.  S.,  1  Binn.  27;  Ellis 
V.  Ohio  Life,  etc.,  Ins.  Co.,  4  Ohio  St.  628;  Whitney  v.  Bunnell,  8  La. 
Ann.  429;  Peoria  R.  R.  Co.  v.  Neill,  16  111.  269;  Angel  v.  Ellis,  1  Mc- 
Gloin,  57. 

2  Robinson  v.  Yarrow,  7  Taunt.  445;  1  Moore,  150;  Chitty  on  Bills, 
L*639]  717;  I  Parsons'  N.  &  B.  322;  1  Daniel's  Negot.  Inst.,  §  537. 

3  Agnel  V.  Ellis,  1  McGloin  57,  McGloin,  J.,  saying:  "A party  accepting 
a  commercial  negotiable  draft  or  Ijill  of  exchange,  guarantees  the  authority 
of  the  drawer  to  execute  the  same  and  the  genuineness  of  his  signature. 
This  principle  has  been  held  applicable  to  such  an  instrument  drawn  by 
an  agent,  and  the  authority  of  the  agent  declared  to  be  amongst  the 
things  guaranteed  by  the  acceptance.  Robinson  v.  Yarrow,  7  Taunt.  445. 
There  is  really  no  reason  why,  in  the  hands  of  an  innocent  holder,  the 
guarantee  should  not  extend  so  far.  But  as  one  who  received  a  draft 
from  a  forger  with  notice,  actual  or  legal,  could  not  impose  such  guar- 
antee upon  the  acceptor,  and  as  one  dealing  with  an  agent  must,  at  his 
peril,  inquire  into  the  scope  of  that  agent's  authority,  and  is  negligent  if 
he  do  not,  it  is  reasonable  to  hold  a  person  taking  a  draft,  executed  by  a 
mandatary,  as  charged  with  knowledge  as  to  the  character  and  extent  of 
the  agency,  and  not  protected  by  the  acceptance,  as  an  innocent  person 
would  be.  And  in  view  of  this  obligation  upon  the  part  of  per- 
sons dealing  primarily  and  directly  with  agents,  the  drawer  has  as  much 

25  385 


§    230  ACCEI'TAXCE    OF    BILLS    OF    EXCHANGE  [cil.  XI. 

The  drawee  also  by  acceptance  admits  that  he  has  in  bis 
possession  funds  of  the  drawer,  wherewith  to  pay  the 
draft,  and  be  is  not  permitted  to  deny  this  fact  in  any  suit 
by  the  holder  of  the  bill.^  But  as  against  the  drawer,  it  is 
only  prima  facie  evidence  that  the  drawee  bad  such  funds 
in  his  possession,  iwid  it  may  be  rebutted  by  any  proper 
testimony. 2  The  drawee's  acceptance  admits  likewise  the 
drawer's  capacity  to  draw  the  bill,  so  that  he  will  be 
estopped  from  proving,  for  the  purpose  of  defeating  the 
bill,  that  the  drawer  was  under  a  legal  disability  because  of 
infancy,^  or  bankruptcy,*  or  for  any  other  reason.^  If  the 
bill  is  drawn  in  the  name  of  a  firm,  it  admits  the  existence 
of  such  a  firm,*'  and  if  drawn  by  one,  signing  himself  as 
executor  or  administrator,  it  admits  his  right  to  sign  in 
that  capacity.' 

right,  and  perhaps  more,  to  presume  that  the  payee  has  performed  his 
prior  duty,  and  ascertained  the  extent  of  the  agent's  power  before  tak- 
ing liis  draft,  as  the  negligent  payee  has  to  suppose  that  the  acceptor 
■would  not  commit  himself  unless  the  draft  were  correct." 

1  Eaborg  v.  Peyton,  2  Wheat.  385;  Jarvis  v.  Wilson,  46  Conn.  90; 
Byrd  v.  Bertrand,  7  Ark.  327;  Hortsman  r.  Henshaw,  11  How.  177; 
Eastin  v.  Succession  of  Osborn,  26  La.  Ann.  153;  Hoffman  v.  Bank  of 
Milwaukee,  12  Wall.  181;  Kennedy  v.  Galvin,  15  Me.  131;  Gillilan  v. 
Meyers,  31  HI.  525;  Kemble  «.  Lull,  3  McLean,  272;  Jarvis  v.  Wilson, 
46  Conn.  90;  Jordan  v.  Tarkiugtou,  4  Dev.  357;  Marsh  v.  Low,  55  Ind. 
271;  Byrne  v.  Schwing,  6  B.  Mon.  199. 

2  Darnell  v.  Williams,  2  Stark.  145;  Parker  v.  Lewis,  39  Tex.  394; 
Turner  v.  Browder,  5  Bush,  216;  Pomeroy  v.  Tanner,  70  N.  Y.  517;  Hid- 
den V.  Waldo,  55  N.  Y.  294. 

3  Taylor  v.  Croker,  4  Esp.  187;  Jones  v.  Darch,  4  Price,  300. 

4  Braithwaite  v.  Gardiner,  8  Q.  B.  473;  Pitt  v.  Chappelew,  8  M.  &  W. 
616. 

5  Such  as  that  the  drawer  was  a  married  woman,  Smith  v.  Marsack,  6 
C.  B.  48G;  Cowton  v.  Wickershain,  34  Pa.  St.  302;  or  a  fictitious  person, 
Cooper  V.  Meyer,  10  B.  &  C.  468;  5  M.  &  R.  387;  s.  c.  33  L.  J.  Q.  B.  328; 
Ashpittle  1-.  Bryan,  32  L.  J.  Q.  B.  91 ;  3  Best  &  S.  474;  or  a  corporation, 
without  authority  to  draw,  Halifax?;.  Lyle, 3  W.  H.  &  G.  446. 

6  Bass  V.  Clive,  4  M.  &  S.  13. 

'  Aspinwall  v.  Wake,  10  Bing.  51. 
38G 


CH.  XI,]        ACCEPTANCE    OF   BILLS    OF   EXCHANGE.  §    230 

The  acceptance,  in  the  same  manner,  admits  the  capacity 
of  the  payee  to  indorse  when  the  bill  is  drawn  payable  to 
his  order,  for  by  his  acceptance  he  agrees  to  pay  to  the 
order  of  the  paye.e.  He  cannot,  therefore,  set  up  the  de- 
fense that  the  payee  was  incapacitated  by  law  to  indorse.^ 

But  the  acceptor  does  not  admit  the  genuineness  of  the 
payee's  signature,  where  the  bill  has  been  indorsed.  If, 
therefore,  the  signature  is  forged,  the  acceptor  will  not  be 
bound  to  pay  the  bill  to  the  holder.-  For  the  same  rea- 
sons, he  does  not  admit  or  vouch  for  the  genuineness  of  an 
asfent's  indorsement  or  for  his  authority  to  indorse  for  the 
payee. ^  The  acceptance  does  not  admit  the  genuineness  of 
the  payee's  indorsement,  even  when  the  bill  is  drawn  pay- 
able to  the  drawer's  order,  and  the  indorsement  appears  in 
the  handwriting;  of  the  drawer.*     But  if  the  drawer  is  a 

1  Jones  V.  Darch,  4  Price,  300;  Taylor  v.  Croker,  4  Esp.  187;  Smith 
V.  Marsack,  6  C.  B.  486;  Draton  v.  Dale,  2  B.  &  C.  293.  See  Feaslee  v. 
Kobins,  3  Met.  164.     See  also  ante,  §§  49,  56,  63,  65. 

-  "The  plaintiffs  as  drawees  of  the  bill  were  only  held  to  acknowledge 
the  signature  of  their  correspondents ;  by  accepting  and  paying  the  bill 
they  only  vouched  for  the  genuineness  of  such  signatures,  and  were  not 
held  to  a  knowledge  of  the  want  of  genuineness  of  any  part  of  the  in- 
strument, or  of  any  other  names  appearing  thereon,  or  of  the  title  of  the 
holder."  Allen,  J.,  in  White  v.  Continental  Nat.  Bank,  64  N.  Y.  320; 
Holt  V.  Eoss,  54  N.  Y.  474;  Williams  v.  Drexel,  14  Md.  566;  Hortsmanu. 
Henshaw,  11  How.  177;  Tucker  v.  Robarts,  16  Q.  B.  560;  Smith  v.  Ches- 
ter, 1  T.  R.  654.  If  he  has  paid  the  bill  on  the  faith  of  the  genuineness 
of  the  payee's  signature,  he  may  recover  the  money  back.  Canal  Bank 
17.  Bank  of  Albany,  1  Hill,  287;  Williams  v.  Drexel,  14  Md.  566;  Dick  v. 
Leverich,  11  La.  573. 

3  Robinson  v.  Yarrow,  7  Taunt.  455,  Park,  J. :  "  The  mere  acceptance 
proves  the  drawing,  but  it  never  proves  the  indorsement;  it  is  not  at  all 
necessary  that  a  power  given  to  draw  bills  by  procuration  should  enable 
the  agent  to  indorse  by  procuration ;  the  first  is  a  power  to  get  funds 
into  the  agent's  hands,  the  other  to  pay  them  out.  See  also  Prescott  v. 
Flinn,  9  Bing.  19. 

*  Robinson  v.  Yarrow,  7  Taunt.  455;  Garland  v.  Jacomb,  L.  R.  8 
Exch.  21G;  Beemau  v.  Duck,  11  M.  &  W.  257;  Canal  Bank  v.  Bank  of 
Albany,  1  Hill,  287;  Williams  v.  Drexel,  14  Md.  566.  See  contra,  Bur- 
gess V.  Northern  Bank,  4  Bush,  600. 

387 


§    231  ACCEPTANCE    OF    BILLS    OF    EXCHANGE.        [CH.  XI. 

fictitious  person,  and  the  bill  is  made  payable  to  the  draw- 
er's order,  the  acceptor  is  bound  to  pay  to  the  order  of  the 
person  who  drew  the  bill.^ 

Again,  the  acceptor  does  not  admit  the  genuineness  of 
the  body  of  the  bill,  so  that  if  the  terms  have  been  altered, 
without  authority,  the  acceptor  is  not  bound  by  them,  and 
can  refuse  to  pay  the  altered  bill.^  And  if  he  has  paid  the 
bill  accordino;  to  its  altered  terms,  he  could  recover  back 
the  excess  over  the  original  amount  of  the  bill,^  unless  the 
alteration  was  rendered  possible  by  the  negligence  of  the 
draAver ;  in  such  a  case  the  acceptor  would  be  bound  for  the 
whole  amount,  and  could  not  recover  back  any  part  of  it, 
since  the  drawer  would  be  bound  for  the  whole  amount  to 
him.*  The  same  rule  prevails  when  the  drawer  alters  the 
bill  himself  or  acquiesces  in  its  alteration.^ 

§  231.  The  admissions  of  acceptor  for  honor. — Ac- 
cording to  some  of  the  authorities,  the  acceptor  for  honor 
does  not  admit  the  genuineness  of  the  signatures  to  the  bill, 
not  even  the  signature  of  the  person  for  whose  honor  he  has 
accepted.  The  principal  ground  for  this  opinion  is  that  the 
acceptance  for  honor  is  an  extraordinary  proceeding,  and 
not  a  matter  of  course  in  trade;  and  the  admissions  being- 
required  only  for  commercial  convenience,  they  should  not 
apply  to  the  unusual  acceptance  for  honor,  which  can  occur 
only  after  the  bill  has  been  dishonored,  and  the  commercial 
world  has  been  put  on  its  guard  .^    But  while  we  incline  to  this 

1  Cooper  V.  Meyer,  10  B.  &  C.  468;  Beeman  v.  Duck,  11  M.  &  W.  2.51. 

2  Young  V.  Grote,  4  Biug.  253;  Hall  v.  Fuller,  5  B.  &  C.  750;  Marine 
Nat.  Bank  v.  Nat.  City  Bank,  59  N.  Y.  C7;  White  v.  Continental  Nat.  Bank, 
64  N.  Y.  320;  Young  v.  Lehman,  63  Ala.  519;  Espy  v.  Bank  of  Cincinnati, 
18  Wall.  604.     See  post,  chapter  on  Forgery. 

3  Bank  of  Commerce  v.  Union  Bank,  3  Corast.  230.  See  post,  chap- 
ter on  Forgery,  in  respect  to  effect  of  forgery. 

*  Van  Duzer  v.  Howe,  21  N.  Y.  531. 

5  Langton  v.  Lazarus,  5  M.  &  W.  628;   Ward  v.  Allen,  2  Met.  57. 
e  1  Parsons'  N.  &  B.  323.     In   Wilkinson  v.  Johnson,  3  B.  &  C.  428, 
388 


CH.  XI.]        ACCEPTANCE   OF   BILLS    OF    EXCHANGE  §    231 

opinion,  it  must  be  admitted  that  the  opposite  view,  taken  by 
some  of  the  authorities,  is  not  without  reason,  and  that  the 
point  is  at  best  a  very  doubtful  one.^ 

It  has  also  been  held  that  the  acceptor  for  honor  is  free 
from  admissions,  only  when  he  accepts  for  an  indorser ; 
and  that  when  lie  accepts  for  the  honor  of  the  drawer,  he 
admits  that  the  bill  is  valid,  and  is  estopped  from  denying 
its  validity.^     And  it  seems  that  he  is  estopped  in  any  case 

Lord  Tenterden  said:  "A  bill  is  carried  for  payment  to  the  person 
whose  name  appears  as  acceptor,  or  as  agent  for  an  acceptor,  entirely 
as  a  matter  of  course.  The  person  presenting  very  often  knows  nothing 
of  the  acceptor,  and  merely  carries  or  sends  the  bill  according  to  the 
direction  that  he  finds  upon  it;  so  that  the  act  of  presentment  informs ' 
the  acceptor  or  his  agent  of  nothing  more  than  that  his  name  appears 
to  be  on  the  bill  as  the  person  to  pay  it ;  and  it  behooves  him  to  see  that 
his  name  is  properly  on  the  bill.  But  it  is  by  no  means  a  matter  of  course 
to  call  upon  a  person  to  pay  a  bill  for  the  honor  of  aa  indorser;  and 
such  a  call,  therefoi-e,  imports,  on  the  part  of  the  person  making  it,  that 
the  name  of  a  correspondent  for  whose  honor  the  payment  is  asked,  is 
actually  on  the  bill ;  but  still  his  attention  may  reasonably  be  lessened 
by  the  assertion  that  the  call  itself  makes  to  him  in  fact,  though  no  asser- 
tion may  be  made  in  words.  And  the  fault,  if  he  pays  on  a  forged  sig- 
nature,  is  not  wholly  and  entirely  his  own;  but  begins  at  least  with  the 
person  who  thus  calls  upon  him.  And  though,  where  all  the  negligence 
is  on  one  side,  it  may  perhaps  be  uu'flt  to  inquire  into  the  quantum;  yet 
where  there  is  any  fault  in  the  other  party,  and  that  other  party  cannot 
be  said  to  be  wholly  innocent,  he  ought  not,  in  our  opinion,  to  profit  by 
the  mistake  into  which  he  may  by  his  own  prior  mistake  have  led  the 
other;  at  least,  if  the  mistake  is  discovered  before  any  alteration  in 
the  situation  of  any  of  the  other  parties,  that  is,  while  the  remedies  of 
all  the  parties  entitled  to  remedy  are  left  entire,  and  no  one  is  discharged 
by  laches." 

1  "  Why,  indeed,  the  acceptor  supra  protest  should  not  be  bound  by 
the  same  rules  which  apply  to  an  ordinary  acceptor  in  the  usual  course 
of  business  we  cannot  perceive.  It  is  his  own  voluutary  act,  and  unless 
he  has  been  imposed  upon  by  the  holder  of  the  bill  to  such  an  extent  as 
to  warrant  a  defense  on  the  distinct  ground  of  fraud,  he  should,  we  think, 
be  held  up  to  the  strict  performance  of  his  engageraeut,  and  estopped 
from  denying  any  fact  —  such  as  the  validity  of  the  signatures  of  par- 
ties—  which  it  presupposes."  1  Daniel's  Negot.  Inst,,  §528;  Byles  on 
Bills,  [*265]  406. 

-  In  Phillips  V.  Thurn,  18  C.  B.  (n.  s.)  G'J4,  the  payee  was  a  fictitious 

389 


§    '202  ACCEPTAXCE    OF    BILLS    OF    EXCHANGE.        [cil.  XI. 

from  setting  up  the  defense  of  forgery  in  an  action  brought 
by  a  bona  fide  transferee  of  the  bill.^ 

§  232.  How  acceptor's  liability  may  be  waived.  —  Pay- 
ment or  a  release  will  extinguish  the  acceptor's  liability. 
They  will  be  considered  elsewhere.^  It  is  proposed  to  dis- 
cuss here,  when  and  under  what  circumstances  the  accept- 
or's liability  may  be  discharged  by  a  waiver.  It  is  a 
general  rule  of  law  that  an  executory  contract  may  before 
breach  be  discharged  by  the  mutual  agreement  of  the  par- 
ties to  waive  their  respective  rights  under  the  contract ;  and 
this  agreement  may  be  written  or  verbal.  But  after  a 
breach  of  the  contract  it  can  only  be  discharged  by  pay- 
ment, or  by  a  renunciation  based  upon  some  valuable  con- 
sideration, offered  in-  place  of  the  rights  under  the  contract.^ 
But  it  is  claimed  that  the  bills  of  exchange  constitute  an 
exception  to  this  general  rule,  and  the  acceptor  may  be  dis- 
charged by  an  express  renunciation  of  his  obligation,  with- 
out consideration.  Not  only  is  this  held  to  be  the  case, 
w^here  the  acceptance  was  for  the  accommodation  of  the 
drawer,*  but    also  where  the   acceptor   had    funds  of   the 

person,  and  Erie,  C.  J.,  said:  "  I  take  it  to  be  clear,  that  if  the  defendant 
had  not  intervened  and  the  action  had  been  brought  by  the  holder  of  the 
bill  against  the  drawer,  the  drawer  would  have  been  by  law  compelled  to 
admit  that  the  bill  was  a  valid  bill  payable  to  bearer.  *  *  *  It  seems 
to  me  that  there  is  good  reason  for  saying  that  that  which  the  drawer 
would  be  estopped  from  denying,  the  acceptor  for  honor  should  also  be 
estopped  from  denying.  I  think  that  he  is  equally  bound  to  admit  that 
the  bill  is  a  valid  bill." 

1  Story  on  Bills,  §262;  1  Daniel's  Negot.  Inst.,  §  528;  Salt  Springs 
Bank  v.  Syracuse  Sav.  Inst.,  02  Barb.  101. 

2  See  post,  chapter  on  Payment. 

5  Story  on  Bills,  §  266;  1  Parsons'  N.  &  B.  324;  Foster  v.  Dawber,  G 
Exch.  850;  Dobson  v.  Espie,  26  L.  J.  (N.  s.)  240;  Byles  on  Bills,  [*196, 
197]  308,  309. 

<  Whatley  v.  Tricker,  1  Camp.  35;  Story  on  Bills,  §  266;  1  Parsons' 
N.  &  B.  324;  Chitty  on  Bills,  r*311]  350. 

390 


CH.  XI.]        ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  §    232 

drawer,  against  which  the  bill  had  been  drawn. ^  But  the 
language  of  the  English  author  is  broader  than  the  author- 
ities warrant  to  be  used  in  stating  the  existing  law  on  this 
question.  Whatever  may  be  the  prevalent  rule  in  foreign 
countries,  not  only  in  most  of  the  cited  cases  is  the  waiver 
or  renunciation  of  the  acceptance  acknowledged  to  be  sup- 
ported by  a  sufficient  consideration ;  ^  but  the  law  writers 

1  Walpole  V.  Pulteney,  cited  in  Dingwall  v.  Dunster,  1  Dougl.  248; 
Wintermute  v.  Post,  4  N.  J.  420;  Farquhar  v.  Southey,  2  C.  &  P.  497; 
Parker  v.  Leigh,  2  Stark.  228.  **  It  is  a  general  rule  of  law  that  a  simple 
contract  may,  before  breach,  be  waived  or  discharged,  without  a  deed, 
and  without  a  consideration;  but  after  breach  there  can  be  no  discharge, 
except  by  deed,  or  upon  sufficient  consideration.  To  this  rule  it  has  been 
repeatedly  held  that  contracts  on  bills  of  exchange  form  an  exception, 
and  that  the  liability  of  the  acceptor,  or  other  party,  remote  or  immediate, 
though  complete,  may  be  discharged  by  an  express  renunciation  of  his 
claim  on  the  part  of  the  holder  without  consideration.  The  exception 
seems  at  first  to  violate  a  fundamental  rule,  but  the  reason  may  be  that  a 
distinction  between  a  release  under  seal,  and  a  release  not  under  seal,  is 
quite  unknown  in  foreign  countries.  An  express  and  complete  renunci- 
ation by  the  holder  of  his  claim  on  any  party  to  the  bill,  is,  therefore,  ac- 
cording to  the  law  merchant  equivalent  to  a  release  under  seal.  And  as 
it  would  be  highly  inconvenient  to  introduce  nice  distinctions  and  nice 
questions  of  international  law,  all  the  contracts  on  a  foreign  bill,  though 
negotiated  or  made  in  England,  and  all  the  contracts  on  an  inland  bill, 
depending,  as  they  do,  on  the  same  law  merchant,  may  be  so  released. 
And  such  a  relaxation  of  the  general  rule  in  the  case  of  bills  of  exchange 
Is  not  unreasonable  on  another  ground.  The  money  due  at  the  maturity 
of  a  bill  of  exchange  is  in  practice  expected  to  be  paid  immediately,  and 
in  many  cases  with  remedies  over  in  favor  of  the  debtor.  Parties  liable 
who  are  expressly  told  that  recourse  will  not,  in  any  event,  be  liad  to 
them,  are  almost  sure,  m  consequence,  to  alter  their  conduct  and  posi- 
tion."    Byles  on  Bills,  [*196,  197]  308,  309. 

2  In  "Whatley  v.  Tricker,  1  Camp  35,  the  acceptor  parted  with  some 
property  of  the  drawer,  in  reliance  upon  his  release  from  liability.  See 
also  Parker  V.  Leigh,  2  Stark.  228;  Badnall  v.  Samuel,  3  Price,  521;  Per- 
fect V.  Musgrave,  G  Price,  HI;  Walpole  v.  Pulteney,  cited  in  1  Dougl. 
248.  In  Wintermute  v.  Post,  4  N.  J.  420,  Haines,  J.,  said'  "That  a  parol 
waiver  is  lawful,  and  will  discharge  the  acceptor,  there  can  be  no  doubt, 
and  the  court  was  correct  in  charging  the  jury,  that  if,  in  their  opinion, 
the  circumstances  and  the  conduct  of  the  plaintiff  induced  the  defend- 
ant to  believe  that  no  further  resort  would  be  had  to  him,  it  was  a 

391 


§    232  ACCEPTANCK    OF    BILLS    OF    EXCHANGE.        [CH.  XI. 

also,  with  the  exception  of  Mr.  Byles,  recognize  the  neces- 
sity of  a  consideration  of  some  sort  to  support  a  waiver.^ 
It  is  probably  true  that  no  case  of  a  renunciation  of  the  ac- 
ceptance can  arise  where  a  subsequent  enforcement  of  the 
acceptor's  liability  would  not  work  an  injury  in  parting  with 
the  funds  or  other  property  of  the  drawer,  or  in  failing  to 
take  the  steps  necessary  for  his  protection,  because  of  his 
reliance  upon  the  release  of  his  liability.  But  the  principle 
must  not  be  lost  sight  of,  that  here,  as  well  as  elsewhere  in 

waiver.  If  the  plaintiff  induced  the  defendant  fairly  to  suppose  that  ho 
■would  look  to  the  drawer,  and  not  to  him,  he  thereby  relieved  the  de- 
fendant from  any  further  care  to  secure  funds  in  his  hands  to  meet  the 
draft,  and  relinquished  to  the  defendant  any  liability  that  resulted  from 
the  acceptance.  And  whether  he  did  so  waive  the  liability  of  the  defend- 
ant, was  a  question  of  fact  properly  submitted  to  the  jury." 

1  "Where  the  renunciation  is  clear,  and  the  intention  to  discharge 
unquestionable,  there,  if  there  be  a  sufficient  consideration,  or  an  act 
done  on  the  part  of  the  acceptor,  which  might  not  otherwise  have  been 
done,  which  affects  his  interest,  the  acceptor  will  be  discharged."  Story 
on  Bills,  §  266.  "Whether  such  waiver  or  renunciation,  however  abso- 
lute, would  be  valid  if  without  consideration,  may  be  doubted.  There 
is,  or  seems  to  be,  some  authority  for  it.  But  it  is  certain  that  it  must 
have  full  force  and  effect  where  it  has  induced  the  acceptor  to  do  any 
act  which  would  be  injurious  to  hira  if  the  obligation  were  afterwards 
insisted  on.  We  think  that  a  waiver  operates  by  estoppel  rather  than  by 
contract,  and  we  should  therefore  state  the  rule  thus.  Any  renunciation 
founded  upon  a  valid  consideration,  or  acted  upon  in  good  faith  by  the 
acceptor,  so  as  to  put  him  in  a  worse  situation  than  if  this  renunciation 
had  not  been  made;  or  any  act  of  the  holder  authorizing  the  acceptor  to 
believe  that  the  holder  had  renounced  all  claim  upon  him,  which  belief 
was  acted  upon  by  the  acceptor,  discharges  him."  1  Parsons-  N.  &  B.  320, 
321.  "  The  acceptor  enters  into  his  engagement  with  funds  of  the  drawer 
in  his  hands,  or  under  some  business  arrangement  according  to  his 
course  of  dealing,  and  if  the  holder  expressly  renounces  claim  against 
him,  his  hands  are  then  untied,  and  he  is  left  free  to  account  to  the 
drawee  for  the  funds  in  his  hands,  or  at  least  is  no  longer  bound  to  ap- 
propriate them  to  the  payment  of  the  bill,  or  to  carry  out  the  arrange- 
ments contemplated  for  its  payment.  To  permit  the  holder,  after  thus 
exonerating  the  acceptor,  to  recur  to  him  for  payment,  would  work  in 
many  cases  the  harshest  injustice,  and  he  is  estopped  from  doing  so."  1 
Daniel's  Negot.  Inst.  §544. 
302 


€H.  XI.]        ACCEPTANCE   OF    BILLS    OF    EXCHANGE.  §    232 

the  law  of  contracts,  a  consideration  is  necessary  to  make  a 
waiver  or  release  valid.  There  is,  then,  in  fact  no  differ- 
ence between  bills  of  exchange  and  other  contracts  in  re- 
spect to  the  requisites  of  a  legal  waiver.^ 

In  order  that  the  renunciation  of  the  acceptor's  liability 
may  be  binding  upon  the  holder  and  may  release  the  ac- 
ceptor, it  must  be  absolute  and  unconditional.  There  is  no 
discharge  where  the  waiver  is  conditional.^  And,  although 
it  has  been  held  that  the  waiver  must  be  express,^  yet  it  is 
probable  that  the  courts  cannot  be  said  to  have  gone  fur- 
ther than  requiring  that  the  fact  of  renunciation  must  be 
made  clear,  and  that  it  may  be  implied  from  the  circum- 

1  Judge  Sharswood,  in  a  note  to  Byles  ou  Bills,  p.  310,  after  quoting 
from  Judge  Story  on  this  subject  (see  quotation  in  preceding  note) ,  says : 
"  Thei'e  can  be  no  hesitation  in  assenting  to  this  statement  of  the  law. 
But  there  is  nothing  peculiar  in  this  doctrine  to  bills  of  exchange.  It  is 
the  application  only  of  principles  well  settled  in  all  other  classes  of  con- 
tracts. It  is  to  be  observed,  also,  that  bills  or  notes  are  not  within  the 
rule  that  simple  contracts  may  be  discharged  by  parol  before  breach; 
it  would  be  more  accurately  expressed,  to  say  that  executory  con- 
tracts may  be  discharged  or  varied  by  parol  before  breach,  and-  then  I 
am  not  aware  of  any  principle  or  cases  which  would  confine  it  to  simple 
contracts.  If  A.  agreed  to  build  a  house  for  B.,  or  to  sell  him  certain 
materials,  whether  by  articles  under  seal  or  not,  A.  and  B.  may  before 
breach  vary  such  agreement  by  parol.  But  if  the  consideration  on  either 
side  is  executed,  or  just  so  far  as  it  is  executed,  it  is  no  longer  an  execu- 
tory but  an  executed  contract,  and  an  accord  without  satisfaction  is  no 
bar.  A  bond,  a  bill,  a  note,  the  price  to  be  paid  for  making  a  coat,  build- 
ing a  house,  or  selling  a  barrel  of  flour,  if  the  service  has  been  performed, 
or  the  merchandize,  though  a  credit  is  given,  are  debitann presenti,  solvenda 
in  futuro,  and  cannot  be  re'leased,  unless  by  an  instrument  under  seal,  or  an 
agreement  founded  upon  sufficient  consideration."  It  may  be  added  that 
there  is  even  no  difference,  in  respect  to  requiring  a  consideration  for  a 
release  or  waiver,  between  executory  and  executed  contract,  except  in  re- 
spect to  the  kind  of  consideration.  As  long  as  the  contract  is  executory, 
the  release  of  the  rights  under  the  contract  of  one  party  constitutes  the 
consideration  for  the  release  of  the  other  party's  rights. 

2  Whatley  v.  Tricker,  1  Camp.  35 ;  Story  on  Bills,  §  266 ;  1  Parsons' 
N.  &  B.  324. 

3  Dingwall  v.  Dunster,  1  DougL  2-17;   13  East,  430. 

393 


§    232  ACCEPTANCE    OF    HILLS    OF    EXCHANGE.         [CIl.  XI. 

stances.^  It  will  be  implied  from  a  cancellation  of  the  accept- 
ance, Avhere  it  was  done  by  the  holder  or  by  his  authority  ,2 
but  not  when  done  without  his  consent  or  by  mistake.' 
But  the  acceptor  will  not  be  discharged  merely  because 
the  holder  has  delayed  to  proceed  against  him,*  or  has 
received  interest  from  the  drawer  or  indorser,^  or  has  given 
them  an  extension  of   time  or  taken  security  from  them.® 

1  1  Daniel's  Negot.  Inst.,  §  545;  Farquhar  v.  Southey,  2  C.  &  P.  497; 
Parker  v.  Leigh,  2  Stark.  228;  Wintermute  v.  Post,  4  N.  J.  420. 

2  Sproat  V.  Mattliews,  1  T.  R.  182;  Bentinck  v.  Dorrien,  6  East,  199; 
1  Parsons'  N.  &  B.  328. 

3  Wilkinson  v.  Johnson,  3  B.  &  C  428;  Novelli  v.  Rossi,  2  B.  &  Ad. 
757;  Raper  v.  Birkbeck,  15  East,  17.  It  is  a  question  for  the  jury  to  de- 
termine -whether  the  cancellation  was  intentional  or  unintentional,  with 
or -without  the  holder's  consent.  Sweeting  v.  Halse,  9  B.  &C.  (17  Eng. 
C.  L.  H.)  305;  4  Man.  &  R.  287. 

4  Anderson  v.  Cleveland,  13  East,  430. 

s  Farquhar  v.  Southey,  2  C.  &  P.  497;  Moody  &  M.  14;  Dingwall  v. 
Dunster,  1  Doug.  247. 

6  Story  on  Bills,  §  268 ;  Dingwall  v.  Dunster,  1  Doug.  247 ;  Ellis  v. 
Galindo,  1  Doug.  250,  note;  Farquhar  v.  Southey,  2  C.  &  P.  497.  In 
Laxton  v.  Peate,  2  Camp.  185,  it  was  held  by  Lord  Ellenborough  that 
where  it  was  an  accommodation  acceptance,  the  aceptance  was  dis- 
charged by  taking  interest  or  security  from  the  drawer,  or  by  giving  an 
extension  of  time  to  him,  since  the  acceptor  in  that  case  is  but  a  surety 
of  the  drawer.  But  in  Fentum  v.  Pocock,  5  Taunt.  192,  1  Marsh.  14, 
Lord  Mansfield  repudiated  the  doctrine  laid  down  by  Lord  Ellenborough, 
saying:  "  As  it  appears  to  me,  if  tlie  holder  had  known  in  the  clearest 
manner,  at  the  time  of  his  taking  the  bill,  that  it  was  merely  an  accom- 
modation bill,  it  would  make  no  manner  of  difference ;  for  he  who  ac- 
cepts a  bill,  whether  for  value,  or  to  serve  a  friend,  makes  himself  in  all 
events  liable  as  acceptor,  and  nothing  can  discharge  him  but  payment  or 
release."  The  doctrine  of  Fentum  v.  Pocock,  has  been  followed  in  En- 
gland in  Price  V.  Edmunds,  10  B.  &  C.  578;  Yallop  v.  Ebers,  1  B.  &  Ad. 
698;  Strong  v.  Foster,  17  C.  B.  201;  Angell  v.  Ohler,  5  M.  &  W,  600; 
Charles  v.  Marsden,  1  Taunt.  224 ;  Carstairs  v.  RoUeston,  5  Taunt.  551 ; 
Smith  V.  Knox,  3  Esp.  4<];  Mallet  v.  Thompson,  5  Esp.  178;  and  in  the 
United  States,  in  Farmers,  etc.,  Bank  v.  Rathbone,  26  Vt.  19;  Murray  v. 
Judah,  6  Cow.  484;  Bank  of  Montgomery  Co.  v.  Walker,  9  S.  &  R.  229; 
Walker  v.  Bank  of  Montgomery  Co.,  12  S.  &  R.  382;  Clopper  r.  Union 
Bank,  7  Harr.  &  J.  92;  Yates  v.  Donaldson,  5  Md.  389;  Hansbrough  w. 
Gray,  3  Gratt.  35G;  Lambert «.  Sandford,  2  Blackf.  137;  Cronise  v.  Kel- 
394 


CH.  XI.]         ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  §    234 

§  233.  Certified  notes.  —  There  cannot,  of  course,  be 
any  regular  acceptance  of  a  promissory  note.  But  a  cus- 
tom has  prevailed  more  or  less  in  the  banking  business, 
whenever  a  note  is  made  payable  at  a  particular  bank,  to 
take  the  note  to  the  bank,  and  to  secure  from  the  bank 
officials  a  certificate  that  the  note  is  good.  This  certificate 
amounts  to  a  guaranty  that  the  bank  has  the  funds  where- 
with to  pay  the  note,  and  imposes  upon  the  bank  an  abso- 
lute obligation  to  pay.^  But  the  certification  of  a  prom- 
issory note  does  not  prevent  the  certifying  bank  from 
taking  up  the  note  as  an  indorsee  for  value,  and  holding 
the  maker  and  indorsers  liable  to  it  on  the  note.^ 

§  234.  Certified  checks.  —  Checks  may  also  be  certified 
to  by  the  bank  on  which  they  are  drawn,  and  the  bank  thus 
become  liable  on  them,  like  the  acceptor  of  a  bill  of  ex- 
change. But  as  the  distinguishing  characteristics  of  checks 
are  to  receive  separate  treatment  in  another  chapter  ^  the 
subject  of  certified  checks  will  not  be  discussed  in  this  con- 
nection.* 

logg,  20  111.  11;  Diversy  v.  Moor,  22  111.  330.  See  also  Pickerings. 
Marsh,  7  N.  &H.  192;  Church  v.  Barlow,  9  Pick.  547;  Commercial  Bank 
V.  Cunningham,  24  Pick.  270;  Grant  v.  Ellicott,  7  Wend.  227;  Lordt?. 
Ocean  Bank,  20  Pa.  St.  884. 

1  "The  presentation  of  the  note  at  the  counter  of  the  bank,  on  its  ma- 
turity, for  payment,  was  iu  the  ordinary  course  of  business  and  so  was 
the  certificate  then  and  there  indorsed  by  the  teller,  certifying  that  the 
same  was  good.  The  legal  effect  and  force  of  such  certificate  was,  that 
the  maker  had  deposited  funds  in  the  bank  to  meet  the  note ;  and  that 
the  bank  then  held  the  same  in  deposit  for  that  purpose ;  and  would  pay 
the  amount  upon  request.  *  *  *  The  indorsement  was,  iu  effect,  an 
absolute  engagement  on  the  part  of  the  bank  to  pay  the  note,  and  dis- 
pense with  protest,  or  steps  to  charge  tiie  indorser,  as  much  so  as  if  the 
defendant  had  actually  received  the  cash  on  the  presentation  of  the  note, 
instead  of  taking  the  certificate  of  the  teller  that  the  note  was  good." 
Mead  v.  Merchants'  Bank,  25  N.  Y.  148 

2  Irving  Bank  v.  Wetherall,  36  N.  Y.  337. 

*  See  post,  chap.  XXIII. 

*  See  post,  §§  436-439. 

395 


CHAPTEE    XII. 

THE  TRANSFER  OF  COMMERCIAL  PAPER  IN  GENERAL. 

Section  241.  The  assiguability  of  choses  iu  action  iu  general. 

242.  Transfer  of   non-negotiable  paper  —  Subject  to  what  de- 

fenses. 

243.  Negotiable  instruments   payable  to  bearer, — how  trans- 

ferred. 

244.  The  liability  of  assignors  of  instruments  payable  to  bearer. 

245.  Liability  of  brolier  in  transfer  of  negotiable  paper  by  de- 

livery. 

246.  The  transfer  of  negotiable  paper  payable  to  order  —  In- 

dorsement. 

247.  Assignment  of  negotiable  paper  payable  to  order. 

248.  Effect  of  a  subsequent  indorsement,  —  wliether  it  relates 

back. 

249.  Equitable  or  implied  assignment  of  negotiable  paper. 

250.  Title  to  commercial  paper  passes  by  sale  without  delivery. 

251.  Transfer  by  legal  process. 

252.  Transfer  liy  donatio  mortis  causa. 

§  241.  The  assignability  of  clioses  in  action  in  gen- 
eral. —  It  is  a  well  known  rule  of  the  common  law  that 
choses  iri  action  cannot  be  assigned,  so  as  to  enable  the 
assignee  to  maintain  an  action  upon  it ;  and  such  is  the  rule 
of  law  in  all  common-law  countries,  where  it  has  not  been 
changed  by  statute  or  judicial  legislation.^     The  reason  as- 

1  Hay  V.  Green,  12  Cush.  282;  Orr  v.  Amory,  11  Mass.  25;  Usher  v. 
D'Wolf,  13  Mass.  290;  Boston  Ice  Co.  v.  Potter,  123  Mass.  28;  Hunt  v. 
Mann,  132  Mass.  53,  55;  Greenby  v.  Wilcoclis,  2  Johns.  1;  Gardner?;. 
Adams,  12  Wend.  297;  Robertson  v.  Reed,  11  Wright,  115;  Dunklin  u. 
Wilkius,  5  Ala.  199;  Davis  v.  Ilerndon,  39  Miss.  484.  The  only  other 
exception  to  this  common-law  rule,  that  prevailed  at  any  early  day,  be- 
sides that  in  favor  of  negotiable  paper,  was  the  assignment  of  choses  in 
action  to  and  from  the  king.  Bac.  Abr.  Prerogative  E,  3 ;  Miles  v.  Will- 
lams,  1  P.  Wms.  249;  10  Mod.  243;  Myles  v.  Williams,  Gibb.  Cas.  318; 
396 


CH.  XII.]  TRANSFER    OF    COMMERCIAL    PAPER.  §     241 

signed  for  this  prohibition  was  the  prevention  of  the  op- 
pression of  the  masses,  by  the  accumulation  of  choses  in 
action  in  the  hands  of  the  fevv.^  The  court  of  chancery, 
at  a  very  early  day,  recognized  the  public  demand  for  the 
assignment  of  executory  contracts,  and  held  such  ass'ign- 
ments  valid,  permitting  the  assignees  to  bring  an  appropri- 
ate action  in  that  court  for  the  protection  of  their  interests. ^ 
Yielding  to  the  influence  of  the  courts  of  equity,  the  com- 
mon-law courts,  at  first  not  recognizing  the  assignee  in 
any  way  whatever,  acknowledged  the  assignment  so  far  as 
to  permit  the  assignee  to  enforce  the  contract  by  an  action 
in  the  name  of  the  assignor  ;  and  the  action  was  so  far  under 
the  control  of  the  assignee,  that  although  the  assignor  was 
the  nominal  plaintiff,  he  could  do  nothing  with  the  suit.^ 
It  was  claimed  that  in  the  assignment  was  implied  "  a  cove- 
nant that  the  assignee  shall  receive  the  money  to  his  own 
use."  *  In  very  many  of  the  States,  now,  this  oommon-law 
rule  has  been  completely  abrogated,  so  that  the  assignee  of 
any  contracts,  —  with  the  exception  of  a  few  contracts  whose 
assignment  is  absolutely  prohibited,* —  may  sue  in  his  own 

Breverton's  Case,  1  Dy.  30b.  It  is  claimed  that  the  same  exception  is 
to  be  recognized  in  this  country,  in  favor  of  assignments  to  and  from 
the  governments,  both  State  and  Federal.  United  States  y.  Buford,  3 
Pet.  12,  30. 

1  Lord  Coke  tells  us,  in  Lampet's  Case,  10  Rep.  48,  "  the  great  wis- 
dom and  policy  of  the  sages  and  fouudex-s  of  our  law  have  provided  that 
no  possibility,  title,  right,  nor-thing  in  action  shall  be  granted  or  assigned 
to  strangers,  for  that  would  be  the  occasion  of  multiplying  of  conten- 
tions and  suits,  of  great  oppression  of  the  people,  and  chiefly  of  terre- 
tenants,  and  the  subversion  of  the  due  and  equal  execution  of  justice." 

*  Russell  V.  Clark,  7  Cranch,  69 ;  Mechanics'  Bank  v.  Seton,  1  Pet. 
299;  Story  ».  Livingston,  13  Pet.  359,  375;  Mason  y.  York,  etc.,  R.  R. 
Co.,  52  Me.  82;  Hodges  v.  Saunders,  17  Pick.  470;  Currier  U.Howard, 
14  Gray,  511;  Frye  v.  Bank  of  Hlinois,  5  Gilraan,  332. 

3  Legh  V.  Legh,  1  B.  &  P.  447;  Fay  v.  Guyuon,  131  Mass.  31 ;  McWill- 
iams  V.  Webb,  32  Iowa,  577. 

*  Lord  Holt  in  Caister  v.  Eccles,  1  Ld.  Kaym.  G83 

^  Such  as  agreements,  involving  personal  confidence,  and  the  employ- 

397 


§    242  TRANSFER   OF   COMMERCIAL   PAPER.  [CH.  XTI. 

name.  This  is  particularly  the  case  in  all  the  States  in 
which  the  Xow  York  code  has  been  adopted ;  for  that  code 
has  provided  that  actions  shall  be  brought  always  in  the 
name  of  the  real  ])art3'  in  interest. 

But  before  those  modifications  in  the  early  common-law 
rule  were  broufjht  about  in  favor  of  assi2:nments  of  con- 
tracts  in  general,  a  custom  grew  up  among  merchants,  which 
was  recognized  by  the  courts  as  valid  and  binding  as  law,  to 
permit  without  restrictions  of  any  kind,  except. in  respect  to 
the  form  of  transfer,  the  assignment  of  certain  instruments 
of  indebtedness,  known  as  bills  of  exchange  and  promissory 
notes. ^  In  consequence  of  this  exception,  these  instru- 
ments received  the  name  of  negotiable  paper.  What  is 
negotiable  paper  has  been  explained  in  detail  in  a  previous 
chapter,^  and  need  not  receive  any  further  attention  in 
this  connection. 

§  242.  Transfer  of  non-negotiable  paper —  Subject  to 
what  defenses.  — In  common  with  chofies  in  action  in 
general,  the  non-negotiable  bill  or  note  cannot  be  assigned 
at  common-law  in  the  name  of  the  original  payee.^  But 
the   assignment  of  non-negotiable  paper,  in  common  with 

raent  of  persoual  skill,  Robsoii  v.  Drummoud,  2  B.  &  Ad.  303;  Bethle- 
hem V.  Annis,  40  N.  H.  34;  Joslyn  v.  Parliu,  54  Vt.  (570;  Davis  v.  Co))uru, 
8  Mass.  299;  Nickerson  v.  Howard,  19  Johns.  113;  Handy  «.  Brown,  1 
Cralich  C.  C.  610;  Lansden  v.  McCarthy,  45  Mo.  106;  Stringfleld».  Heis- 
kell,  2  Yerg.  546. 

1  See  ante,  chap.  I,  §§  1-8. 

2  Chap.  II. 

3  Costelo  V.  Crowell,  127  Mass.  293;  Sanborn  v.  Little,  3  N.  H.  5.S9; 
Wissiiis  V.  Damrell,  5  N.  H.  69;  Backus  y.  Daulorth,  10  Conn.  297; 
Conine  r.  Junction,  etc.,  R.  R.  Co.,  SHoust.  2«S;  Johnson  v.  Speer,  92 
Pa.  St.  227;  Pratt  v.  Thomas,  2  Hill,  654;  Clark  v.  Farmers'  Mfg.  Co.,  15 
Wend.  236;  Sutton  v.  Owen,  65  N.  C.  123;  Buckner  v.  Greenwood,  1 
Eng.  (Ark.)  200;  Matlock  v.  Hendricksou,  1  Green  (N.  J.),  263;  Pres- 
cott  i\  Hull,  17  Johns.  284;  Skinner  v.  Somes,  14  Mass.  107;  Amherst 
Academy  v.  Cowls,  6  Pick.  427;  White  v.  Heylman,  34  Pa.  St.  142. 

398 


CIl.  XII. "I  TRANSFER   OF   COMMERCIAL    PAPER.  §    242 

almost  all  kinds  of  contracts,  has  always  been  recognized 
in  equity  ;  and  in  the  court  of  equity  the  transferee  of  such 
paper  may  sue  in  his  own  narae.^  Unless  the  j^uper  has 
all  the  qualities  of  negotiable  paper  as  set  forth  in  chapter 
II.,  it  is  non-negotiable  ;  and  the  parties  cannot  make  the 
paper  transferable  by  making  it  payable  in  terms  to  the 
bearer  or  to  the  order  of  the  payee. ^ 

Another  important  difference  between  negotiable  and 
non-negotiable  paper  is  that  the  latter  is  transferred 
subject  to  all  the  defenses  that  may  be  set  up  against  the 
original  payee,  whereas  in  the  transfer  of  a  negotiable  in- 
strument to  an  innocent  holder  for  value,  the  latter  takes 
it  free  from  all  the  defenses,  unknown  to  him,  and  not  ap- 
pearing on  the  face  of  the  paper.  In  the  transfer  of  non- 
negotiable  instruments  such  defenses  are  admissible,  even 
against  a  bona  fide  holder  for  value. ^ 

The  non-negotiable  paper  may  be  assigned  in  almost  any 
manner  or  form.  Although  some  sort  of  written  assi^n- 
ment,  either  written  on  the  instrument  itself,  or  on  a  separata 


1  Coles  V.  Jones,  2  Vern.  692;  Wright  v.  Wright,  1  Ves.  sr.  411; 
Hughes  r.  Nelson,  29  N.  J.  549;  Halsey  v.  DeHart,  Coxe  (N.  J.),  93; 
Max-well  v.  Gundrum,  10  B.  Mou.  2SC). 

2  Clarli  V.  King,  2  Mass.  524;  Coolidge  v.  Ruggles,  15  Mass.  387; 
Sliinner  v.  Jones,  14  Mass.  107;  Little  u.  Phoenix  Bank,  7  Hill,  359; 
Legro  V.  Staples,  16  Me.  252;  Weidler  v.  Kauffman,  14  Ohio,  455;  People 
V.  Gray,  23  Cal.  125;  Jones  v.  Carter,  8  Q.  B.  134. 

^  (Previous  pledge  of  the  paper)  Cowdrey  v.  Vandenburgh,  101  U.  S. 
.'572;  (want  of  consideration  between  original  parties)  Welter  v. 
Kiley,  95  Pa.  St.  461;  (fraud)  Bradford  v.  Williams,  91  N,  C.  7;  (pre- 
vious attachment  and  garnishee  process)  Sharts  v.  Await,  73  Ind.  304. 
See  also,  generally,  in  support  of  tlie  text,  Willis  v.  Twombly,  13  Mass. 
204;  Banli  v.  Bynum,  84  N.  C.  24;  Dyer  v.  Homer,  22  Picli.  253;  San- 
born r.  Little,  3N.  B.  539;  Wiggin  v.  Damrell,  4  N.  H.  69;  Tliompson  v. 
McClelland,  29  Pa.  St.  475;  White  v.  Heylman,  34  Pa.  St.  142;  Miller  v. 
Bomberger,  76  Pa.  St.  78;  Havens  v.  Potts,  86  N.  C.  31;  Guerry  v.  Pret- 
tyman,  6  Ga.  119;  Cohen  v.  Prater,  56  Ga.  203;  Reddish  v.  Ritchie,  17 
Fla.  867;  Summers  v.  Hutson,  48  Ind.  228;  Herod  v.  Snyder,  48  Ind.  480; 
Haskell  v.  Brown,  65  111.  29. 

399 


§    243  TRANSFER    OF    COMMERCIAL    TAPER.  [CII.  XII. 

paper  is  usually  employed,  it  is  presumable  that  an  oral  as- 
signment, accompanied  by  a  delivery  of  the  instrument, 
would  pass  a  good  title  to  the  assignee  :  an  equitable  title 
where  the  common-law  prohibition  of  assignment  of  choses 
in  action  still  prevails;  and  a  legal  title,  whero  it  has  been 
abrogated  by  statute. 

§  243.  Negotiable  instruments  payable  to  bearer  — 
How  transferred. — It  was  once  thought  that  bills  and  notes, 
payable  to  bearer,  or  payable  to  "A.  or  bearer,"  were  not 
negotiable,  for  the  reason  that  they  contained  no  express 
authority  to  transfer.^  But  this  position  has  long  since 
been  departed  from,  and  instruments  payable  to  bearer  are 
held  to  be  as  much  negotiable,  as  paper  payable  to  order. ^ 
A  note  payable  to  the  holder  is  also  negotiable,  the  word 
holder  being  treated  as  synonymous  with  bearer.^  But  an 
instrument,  payable  "  to  the  bearer,  A."  is  not  negotiable.* 

Negotiable  instruments,  payable  to  bearer,  are  transfer- 
able by  simple  delivery,  and  the  delivery  of  the  instrument 
passes  the  complete  legal  title. ^     This  is  not  only  the  case, 

1  Horton  v.  Coggs,  3  Lev.  299;  Hodges  v.  Steward,  1  Salk.  125;  Brad- 
ley V.  Trammel,  Hempst.  164 ;  Walmsley  v.  Child,  1  Ves.  sr.  341 ;  Nich- 
olson u.  Sedgwick,  1  Ld.  Raym.  180. 

2  Grant  17.  Vaughn,  3  Burr.  151G;  Shelden  v.  Heutley,  2  Show.  160; 
Hiuton's  Case,  2  Show.  235;  Waynam  v.  Bend,  1  Campb,  175;  Pierce  v. 
Crafts,  12  Johns.  90;  Dole  v.  Weeks,  4  Mass.  451;  Ellis  u.  Wheeler,  3 
Pick.  18;  Wilbour  v.  Turner,  5  Pick.  626;  Truesdell  v.  Thompson,  12 
Met.  5G5;  Eddyu.  Bond,  19  Me.  461;  Ilutchings  v.  Low,  1  Green  (N.  J.). 
246;  Matthews'?;.  Hall  1  Vt.  316;  Rankin  w.  Woodworth,  2  Watts,  134; 
Dean  v.  Hall  17  Wend.  214;  Allwood  v.  Haseldon,  2  Bailey,  457;  Sprowl 
V.  Sirapkins,  3  Ala.  515;  White  v.  Joy,  4  Ala.  571 ;  Greeneaux  v.  Wheeler, 
G  Tc.K.  515;  Hopkins  v.  Seymour,  10  Tex.  202;  Tillman  v.  Allies,  5  Sm. 
&M.  373;  Cobb  w.  Duke,  36  Miss.  60;  Hathcock  v.  Owen,  44  Miss.  799; 
Avery  v.  Latimer,  14  Ohio,  542;  Mainer  ^.  Reynolds,  4  Greene  (Iowa), 
187. 

8  Putnam  v.  Crymes,  1  McMull.  9. 
*  Warren  v.  Scott,  32  Iowa,  22. 

"  Holcomb  V.  Beach,  112  Mass.  450;  Lamb   v.  Matthews,  41  Vt.  42; 
Hutchings  v.  Low,  1  Green  (N.  J.),  246;  Lyle  v.  Burke,  40  Mich.  499; 
400 


CH.  XII.]  TRANSFER    OF    COMMERCIAL    TAPER.  §    244 

Avhen  the  instrument  is  originiilly  payable  to  bearer,  but 
also,  when  a  bill  or  note,  originally  payable  to  order,  has 
become  payable  to  bearer  by  a  blank  indorsement.^  In- 
struments payable  to  a  fictitious  person  are  also  treated  as 
payable  to  bearer,  at  least  as  to  bona  fide  holders. ^ 

§  244.  The  liability  of  assignors  of  instriimeiits  payable 
to  beai'er.  —  The  liability  of  assignors  of  instruments  pay- 
able to  bearer  is  not  so  extensive  as  that  of  indorsers  of 
negotiable  paper,  but  they  do  assume  certain  liabilities  by 
way  of  guaranty.  The  principal  difference  in  the  liability 
of  such  assignors  and  of  indorsers  is  in  the  warranty  of  the 
solvency  of  the  parties  to  the  instrument  and  in  the  guar- 
anty that  the  instrument  will  be  honored  at  maturity.  The 
assignor  of  a  note  or  bill  payable  to  bearer  does  not  war- 
rant the  solvency  of  the  parties  to  the  bill,  and  is  not  re- 
sponsible, if  the  instrument  is  not  paid,  unless  he  knew  at 
the  time  of  the  transfer  that  the  parties  were  insolvent,  and 
the  paper  worthless.  Some  of  the  authorities  hold  that 
the  loss,  in  case  of  insolvency,  should  fall  upon  the  party 
who  has  possession  of  the  instrument  at  the  time  when  the 
insolvency  occurred  ;  ^  but  there  are  others  which  maintain 
that  the  loss  should  fall  upon  the  person  holding  the  paper 
when  the  insolvency  becomes  known  to  him,  and  if  no  pre- 

Hallv.  Alleii,  37  lud.  541;  Woodruff  u.  King,  47  Wis.  261;  Gillham  v. 
State,  3  111.  245;  Cobb  v.  Drake,  36  Miss.  60. 

J  Story  on  Notes,  §  116;Watervliet  Bankw.  White,  1  Denio,  608.  And 
the  title  will  become  reinvested  in  the  iudorser  by  a  redelivery  to  him. 
Humphreyville  v.  Culver,  73  111.  485;  Curtis  u.  Sprague,  51  Cal.  239. 

2  Foster  v.  Shatfruck,  2  N,  H.  446;  Elliot  v.  Abbot,  12  N.  H.  549;  Mau- 
iort  V.  Roberts,  4  E.  D.  Smith,  83 ;  Central  Bank  of  Brooklyn  v,  Lang,  1 
Bosw.  202. 

3  Wainwright  v.  Webster,  11  Vt.  576;  Fogg  v.  Sawyer,  9  N.  H.  365; 
Thomas  V.  Todd,  6  Hill,  340;  Lightbody  v.  Ontario  Bank,  11  Wend.  1; 
Roberts  v.  Fisher,  48  N.  Y.  159;  Harley  v.  Thornton,  2  Hill  (S.  C),  509; 
Westfall  V.  Braley,  10  Ohio  St.  188;  Townsend  v.  Bank  of  Racine,  7  Wis. 
185. 

26  401 


§    244  TRANSFER    OF    COM.MKRCIAL    PAPKR.  [ciI.   XII. 

coding  holder  knew  of  the  insolvency  the  loss  should  fall 
upon  the  last  holder.^  But  where  the  bill  or  note,  payable 
to  bearer,  is  delivered  in  payment  of  a  pre-existing  debt, 
but  it  was  passed  only  as  a  conditional  payment,  conditional 
upon  the  payment  of  the  bill  or  note,  the  subsequent  dis- 
honor of  the  bill  or  note  revives  the  original  indebtedness.^ 
But  if  the  payment  was  intended  to  be  absolute,  the  loss 
from  insolvency  of  the  parties  to  the  instrument  will  fall 
upon  the  transferee.^ 

Of  course,  if  the  transferer  expressly  guarantees  the  sol- 
vency of  the  parties,  he  is  bound  thereby,  and  it  has  been 
held  that  the  statute  of  fraud  does  not  apply  to  such  guar- 
anties, so  that  they  will  be  binding  if  they  are  verbal.* 

The  assignor  of  an  instrument,  payable  to  bearer,  does 
warrant  that  the  signatures  and  the  body  of  the  instrument 
are  genuine,  so  that  if  either  proves  to  be  a  forgery,  the 
money  he  received  for  the  transfer  can  be  recovered  back." 

1  Young  V.  Adams,  6  Mass.  182;  Bicknall  v.  Waterman,  5  R.  I.  43; 
Burgess  t?.  Chapiu,  5R.  I.  225;  Bayard  v.  Shunk,  1  Watts  &  S.  92;  Beck- 
with  V.  Farnum,  5  R.  I.  230;  Aldrich  v.  Jackson,  6  R.  I.  228;  Corbet  v. 
Bank  of  Smyrna,  2  Har.  235;  Edmonds  v.  Digges,  1  Gratt.  359;  Fydell 
V.  Clark,  1  Esp.  447;  Emly  v.  Lye,  15  East,  7;  Scruggs  v.  Cass,  8  Yerg, 
175;  Ware  77.  Street,  2  Head,  609;  Bank  of  England  v.  Newman,  1  Ld. 
Raym.  442;  Bartons.  Trent,  3  Head,  1G7;  Lovrcy  v.  Murrell,  2  Port.  282. 
See  also  Chitty  on  Bills,  [*247]  281;  Byles  on  Bills,  [*158]  252. 

2  Marsh  v.  Redder,  4  Camp.  257;  Taylor  v.  Briggs,  Moody  &  M.  28; 
Robinson  v.  Read,  9  B.  &  C.  449. 

3  Eagle  Bank  v.  Smith,  5  Conn.  71;  Limrains  v.  Gibbins,  18  Q.  B.  722; 
s.  c.  14  Eng.  L.  &  Eq.  64.  But  see  contra,  Camridge  v.  AUenby,  C.  B.  & 
C.  373. 

*  Milks  V.  Rich,  80  N.  Y.  2G8;  Cardell  v.  McNiel,  21  N.  Y.  336;  Bruce 
V.  Burr,  67  N.  Y.  237;  Danber  v.  Blackney,  38  Barb.  432;  Johnson  v.  Gil- 
bert, 4  Hill,  178. 

5  Bell  V.  Dagg,  60  N.  Y.  530;  Mdrich  v.  Jackson,  5  R.  I.  218;  Swau- 
zey  V.  Parker,  50  Pa.  St.  441;  Cabot  Bank  v.  Morton,  4  Gray,  158;  Cool- 
idge  V.  Brigham,  1  Met.  547;  s.  c.  5  Met.  68;  Worthington  v.  Cowles, 
112  Mass.  30;  Whitney  v.  National  Bank,  45  N.  Y.  305;  Ross  v.  Terry,  63 
N.  Y.  613;  People's  Bank  v.  Bogart,  81  N.  Y.  101;  Hussey  v.  Sibley,  66 
Me.  199;  Lyons  v.  Miller,  6  Gratt.  440;  Challis  v.  McCrum,  22  Kan.  157; 
402 


CH.XII.]  TRANSFER    OF    COMMERCIAL    PAPER.  §    244 

It  has  been  held  tliut  there  is  no  implied  warranty  of  the 
genuineness  of  an  instrument  paj^able  to  bearer,  when  it  is 
sold  or  exchanged.^  This  ruling  is  contrary  to  the  general 
(hift  of  authority,  and  it  has  been  repudiated  and  overruled 
ill  ]Mas,sachusetts,2  and  doubted  in  Maine. "^  The  assignor 
also  guarantees  the  genuineness  of  any  preceding  indorse- 
ments, where  an  instrument  once  payable  to  order  has  been 
made  payable  to  bearer  by  a  blank  indorsement.* 

This  warrant}^  of  genuineness  is  only  implied,  and  it  may 
be  excluded  at  any  time  by  an  express  agreement  that  the 
transfer  is  made  without  it." 

Of  the  same  character  is  the  assignor's  implied  warranty 
that  the  instrument  is  legal  and  valid.  It  has  lately  been 
held  in  New  York  that  the  assignor  is  not  liable  to  his  as- 
signee, if  the  paper  turns  out  to  be  invalid  because  of  the 
violation  of  some  rule  of  law,  —  for  example,  the  law  against 
usury,  —  unless  he,  the  assignor,  knew  of  the  illegality.^ 
But  the  English  and  other  State  decisions  hold  that  the 
illegality  of  the  instrument  constitutes  a  failure  of  consid- 
eration, and  not  a  breach  of  warranty ;    and  consequently 

Hurst  V.  Chambers,  12  Bush,  155;  Bankhead  v.  Owen,  60  Ala.  475;  Sny- 
der V,  Reno,  36  Iowa,  329;  Merriam  v>.  Wolcott,  3  Allen,  258;  Bartsch 
V.  Attwater,  4  Conn.  419;  Giffert  v.  West,  37  Wis.  116;  Barton  v. 
Trent,  3  Head,  167;  Smith  v,  McNair,  19  Kan.  330;  Jones  v.  Ryde,  1 
Marsh.  157;  5  Taunt.  488.  The  guaranty  extends  to  each  and  every  sig- 
nature, so  that  it  is  broken  if  one  of  the  signatures  is  forged.  Gumey 
V.  Womersley,  4  E.  &  B.  133;  s.  c.  24  L.  J.  Q.  B.  46.  See  also  Merriam 
V.  Wolcott,  3  Alien,  258;  Allen  v.  Clark,  49  Vt.  390;  Hurst  v.  Chambers, 
12  Bush,  155. 

I  Baxter  v.  Duren,  29  Me.  434;  Ellis  v.  Wild,  6  Mass.  321;  Fisher  v. 
Rieman,  12  Md.  oil. 

•  Merriam  u.  Wolcott,  3  Allen,  258;  Worthingtou  «.  Cowles,  112  Mass. 
30. 

3  Hussey  v.  Sibley,  66  Me.  192. 

<  Giffert  v.  West,  37  Wis.  115. 

»  Bell  V.  Dagg,  60  N.  Y.  530;  Eoss  v.  Terry,  63  N.  Y.  615. 

«  Littauer  u.  •Goldman,  72  N.  Y.  506,  overruliug  prior  New  York  de- 
cisions. 

403 


244 


TRANSFER    OF    COMMERCIAL    PAPER.  [CH.  XII. 


knowledge  of   the   defect  is   not   at  all   essential   to   lia- 
bility.' 

The  assignor  also  warrants  that  the  parties  to  the  instru- 
ment were  competent  to  contract ;  and  if  any  one  of  them 
is  incompetent,  on  account  of  infancy,  marriage,  lunacy 
and  the  like,  the  assignor  is  responsible  to  his  assio-nee.^ 
But  by  a  late  decision  of  the  United  States  Supreme  Court, 
a  different  rule  has  been  laid  down  for  the  assignors  and 
assignees  of  government  securities,  viz. ;  in  the  sale  of 
such  securities  the  assignor  does  not  impliedly  guarantee 
the  competency  of  the  public  officials  to  issue  them.^     The 

1  Hurd  V.  Hall,  12  Wis.  112;  Gompertz  v.  Bartlett,  2  El.  &  B.  854; 
YouDg  V.  Cole,  3  Bing.  N.  C.  724;  Challis  v.  McCrum,  22  Kau.  157; 
Giffert  v.  West,  33  Wis.  618;  s.  c.  37  Wis.  115;  Lawtou  v.  Howe,  14  Wis. 
241;  Costigan  v.  Hawkins,  22  Wis.  81 ;  Morrison  v,  Lovell,  4  W.  Va.  350 
See  also  the  following  overruled  New  York  decisions,  Delaware  Bank  v. 
Jervis,  20  N.  Y.  228;  Webb  v.  Odell,  49  N.  Y.  583;  Bell  v.  Dagg,  60  N. 
Y.  530;  Ross  v.  Terry,  63  N.  Y.  614;  Fuke  v.  Smith,  7  Abb.  (n.  s.)  106; 
Littauer  v.  Goldman,  16  N.  Y.  S.  C.  (9  Hun)  234,  overruled  in  Littauer 
V.  Goldman,  72  N.  Y.  506. 

2  Lobdell  V.  Baker,  3  Mete.  472;  1  Met.  547;  Thrall  v.  Newell,  19  Vt. 
202;  Baldwin  v.  Van  Deusen,  37  N.  Y.  487;  Giffert  «.  West,  37  Wis. 
115. 

3  Otis  V.  Cullora,  92  U.  S.  448,  Swayne,  J.,  saying;  •«  In  Lambeth  ». 
Heath,  15  M.  &  W.  486,  the  defendant  bought  for  the  plaintiff  certain 
'  certificates  of  Kentish-Coast  Railway  scrip,'  and  received  from  him 
the  money  for  them.  Subsequently  the  directors  repudiated  the  scrip 
upon  the  ground  that  it  had  been  issued  by  the  secretary  witnout  author- 
ity. The  enterprise  to  which  it  related  was  abandoned.  The  action, 
which  was  for  money  had  and  received,  was  thereupon  brought  to  re- 
cover back  what  had  been  paid  for  the  scrip.  The  court  put  it  to  the 
jury  to  say  whether  the  scrip  bought  was  '  real  Kentish  railway  scrip.' 
A  verdict  was  found  for  the  plaintiff  upon  this  issue.  A  new  trial  was 
moved  for,  the  defendant  insisting  the  court  had  misdirected  the  jury. 
After  hearing  the  argument,  the  court  said :  '  The  question  is  simply 
this,  —  was  what  the  parties  bought  in  the  market  Kentish-Coast  Rail- 
way scrip?  It  appears  that  it  was  signed  by  the  secretary  of  the  com- 
pany, and  if  this  was  the  only  Kentish-Coast  railway  scrip  in  the  market, 
as  appears  to  have  been  the  case,  and  one  chooses  to  sell  and  another  to 
buy,  that  then  the  latter  has  got  all  he  contracted  to  buy.  That  was  the 
question  for  the  jury ;  but  it  was  not  left  to  them.     The  rule  must  there- 

404 


CH.  XII.]  TRANSFER    OF    COMMERCIAL    PAPER.  §    244 

competency  of  public  oflScials  to  issue  instruments  of  in- 
debtedness is  a  matter  of  record  in  most  instances,  and  in 
every  case  the  determination  of  that  question  is  equally 
within  the  reach  of  all.  Whereas,  in  the  case  of  private 
bills  and  notes,  it  is  very  difficult  for  the  purchaser  to 
obtain  this  information  for  himself.  This  suggestion  may 
furnish  a  stronger  reason  for  the  distinction  thus  made 
between  public  and  private  instruments  of  indebtedness.^ 

The  assignor  also  warrants  that  he  does  not  know  any- 
thing affecting  the  validity  or  value  of  the  instrument.^ 
To  attempt  to  sell  an  instrument  which  one  knows  to  be 

fore  be  absolute  for  a  new  trial.'  The  judges  were  unanimous.  Here 
also  the  plaintiffs  in  error  got  exactly  what  they  intended  to  buy  and  did 
buy.  They  took  no  guaranty.  They  are  seeking  to  recover  as  it  were 
upon  one  while  none  exists.  They  are  not  clothed  with  the  rights  which 
such  a  stipulation  would  have  given  them.  Not  having  taken  it  they 
cannot  have  the  benefit  of  it.  The  bank  cannot  be  charged  with  a  liabil- 
ity which  it  did  not  assume.  Such  securities  throng  the  channels  of 
commerce  which  they  are  made  to  seek,  and  where  they  find  their  mar- 
ket. They  pass  from  hand  to  hand  like  bank-notes.  The  seller  is 
liable  ex  delicto  for  bad  faith;  and  ex  contractu,  there  is  an  implied  war- 
ranty on  his  part  that  they  belong  to  him,  and  that  they  are  not  forgeries. 
When  there  is  no  express  stipulation,  there  is  no  liability  beyond  this. 
If  the  buyer  desires  special  protection,  he  must  take  a  guaranty.  He 
can  dictate  his  tei'ms,  and  refuse  to  buy  unless  it  be  given.  If  not  taken, 
he  cannot  occupy  the  vantage-ground  upon  which  it  would  have  placed 
him.  It  would  be  unreasonably  harsh  to  hold  all  those  through  whose 
hands  such  instruments  must  have  passed,  liable  according  to  the  princi- 
ples, which  the  plaintiff  in  error  insists  shall  be  applied  in  this  case. 
Judgment  affirmed.'''' 

1  But  it  has  been  held  in  Nebraska,  that  if  there  are  two  sets  of  se- 
curities on  the  market,  of  the  same  general  description,  one  of  which  is 
legal,  and  the  other  illegal,  proof  of  that  fact  will  enable  the  purchaser 
of  the  illegal  security  to  recover  back  the  purchase-money,  on  the  ground 
that  he  had  purchased  something  very  different,  viz. :  the  legal  security 
of  the  same  description.     Rogers  v.  Walsh,  12  Neb.  (1881)  28. 

2  Fenn  v.  Harrison,  3  T.  R.  759;  Popley  v.  Ashley,  6  Mod.  147;  Holt, 
121;  Camidge  v.  Allenby,  6  Barn.  &  Cres.  373;  Maupin  v.  Compton,  3 
Bibb,  215;  People's  Bank  v.  Bogart,  81  N.  Y.  106;  Littauer  v.  Goldman, 
72  N.  Y.  506";  Kennedy  v.  O'Connor,  35  Ga.  199;  Howell  v.  Wilson,  2 
Blackf.  418;  Bridge  v.  Batchelder,  9  Allen,  394. 

405 


§  245       TRANSFEU  OF  COMMERCIAL  TAPER.     [CH.  XII. 

worthless  is  a  fraud  upon  the  purchaser,  and  naturally  viti- 
ates the  contract  of  sale. 

There  is,  however,  no  implied  warranty  that  the  instru- 
ment is  not  accommodation  paper,  for  this  class  of  paper 
is  of  very  common  occurrence,  and  is  negotiated  in  the 
usual    course  of  trade. ^ 

Finally,  the  assignor  guarantees  that  he  has  a  good  title 
to  the  instrument,  and  has  a  right  to  convey  it  away.  The 
attempted  transfer  of  property,  to  which  one  has  no  title, 
is  held  to  be  an  actual  or  constructive  fraud  upon  the 
purchaser,  according  to  the  knowledge  or  ignorance  of  the 
vendor,  in  respect  to  his  want  of  title.^  But,  inasmuch  as 
the  bona  fide  holder  can  recover  of  the  parties  to  the  in- 
strument, notwithstanding  the  defect  of  title  of  the  assignor, 
and  consequently  the  question  here  mooted  can  only  arise 
as  to  holders  who  take  the  instruments  with  notice  of  the 
defect  of  title,  it  is  di'fficult  to  see  why  these  holders  are 
entitled  to  any  protection.^ 

§  245.  Liability  of  broker  in  transfer  of  negotiable 
paper  by  delivery. — If  the  broker  discloses  his  agency 
and  the  name  of  the  principal,  he  does  not  assume  any 
personal  liability  in  the  transactions  he  conducts  in  his 
representative  capacity,  and  hence  be  does  not  personally 

1  People's  Bank  v.  Bogart,  81  N.  Y.  107.  In  re  Haramoud,  G  De  Gex, 
M.  &  G.  699,  Lord  Justice  Knight  Bruce :  "  Now  I  do  not  think  that 
the  mere  circumstance  of  a  man  parting  with  a  bill,  without  saying  that 
this  is  an  accommodation  bill,  amounts  to  an  implied  representation  that 
it  is  not  an  accommodation  bill." 

2  Baxter  v.  Duren,  29  Me.  434;  Story  on  Notes,  §  118;  1  Daniel's 
Negot.  Inst.,  §  735. 

3  In  2  Parsons'  N.  &  B.  187,  it  is  stated :  «'  Why  should  this  be  so  (that 
is  a  warranty  of  title)  when  an  honest  transferee  need  give  no  such  war- 
ranty? For,  as  we  have  seen,  property  follows  possession;  and  the 
mere  possession  of  the  transferrer  is  enough  to  give  a  perfect  title  to 
the  honest  taker  of  the  paper,  negotiable  by  delivery  only.  We  hold 
that  the  doctrine  of  implied  warranty  in  sales  is  applicable  to  the  sale  of 
bills  and  notes  only  to  the  extent  that  one  who  sells  indorsed  notes  war- 
rants the  indorsement  genuine." 

406 


CH.  XII.]  TRANSFER    OF    COM3IERCIAL    PAPER.  §    247 

warrant  the  genuineness  or  value  of  the  negotiable  paper, 
which  he  transfers  by  delivery.  But  if  in  negotiating  the 
sale  of  such  paper,  he  suppresses  his  agency,  or  merely 
conceals  the  name  of  his  principal,  the  purchaser  is  entitled 
to  treat  him  as  the  principal,  and  hold  him  to  the  same 
liability  in  respect  to  implied  warranties,  as  if  he  was  the 
real  principal.^  But  the  broker  may  of  course  bind  him- 
self personally  by  an  express  warranty,  notwithstanding  he 
has  fully  disclosed  his  agency.^  And,  on  the  other  hand, 
where  he  has  not  disclosed  his  agency,  he  may  exempt  his 
liability  on  implied  warranties,  by  an  express  agreement  to 
that  effect.^ 

§  246.  The  transfer  of  negotiable  paper  payable  to 
order  —  Indorsements. —  The  proper  and  only  complete 
way  of  transferring  negotiable  paper,  payable  to  order,  is 
by  indorsement.  Only  by  indorsement  can  the  legal  title 
be  passed  to  the  transferee.*  The  subject  of  transfer  by 
indorsement  will  receive  special  treatment  in  a  subsequent 
chapter.^ 

§  247.  Assignment  of  negotiable  paper  payable  to 
order. —  But  while  it  requires  an  indorsement  of  such  paper, 
in  order  to  pass  the  legal  title,  the  equitable  title  does  pass 
with  the  delivery  of  the  instrument  without  indorsement, 

1  Cabot  Bank  v.  Morton,  4  Gray,  156;  Merriam  v.  Wolcott,  3  Allen, 
258;  Worthington  v.  Cowles,  112  Mass.  30. 

2  Wilder  v.  Cowles,  100  Mass.  487. 

3  Bell  V.  Dagg,  60  N.  Y.  530. 

4  Hopkirk  v.  Page,  2  Brock.  20;  Blakely  v.  Grant,  6  Mass.  386;  Rus- 
sell V.  Swan,  16  Mass.  314;  Hestone  v.  Williamson,  2  Bibb,  83. 

5  See  posf,  chap.  XIII. 

6  Jones  V.  Witter,  13  Mass.  304;  Ricliards  v.  Stevenson,  99  Mass.  312 
Lackayi;.  Curtis,  6  Ired.  Eq.  199;  Miles  v.  Reiuiger,  39  Ohio  St.  499 
Taylor  v.  Reese,  44  Miss.  89 ;  First  Nat.  Bank  v.  Strang,  72  111.  559 
Balmer  v.  Sunder,  11  Mo.  App.  454;  Fultz  v.  Walters,  2  Mont.  165 
Dodge  V.  Nat.   Exch.   Bank,  30   Ohio  St.  1 ;  Wardop  v.  Dunlop,  1  Hun, 

407 


§    247  TKANSFKR    OF    COMMERCIAL    PAPER.  [CII.  XII. 

or  b}'  an  assignment  by  deed  ;  ^  or  other  formal  in- 
strument on  a  separate  paper  without  delivery  or  in- 
dorsement of  the  paper. 2  But  it  has  been  held  that  an 
agreement  "  to  be  holder  precisely  the  same  as  if  I 
had  indorsed  the  note,"  would,  as  between  the  immediate 
parties,  be  equivalent  to  an  indorsement,  and  give  the 
transferee  all  the  rights  of  an  indorsee.^ 

The  transferee  by  assignment  or  by  delivery  of  a  bill  or 
note  payable  to  order  is  not  treated  as  a  bona  Jide  holder. 
These  modes  of  transfer  of  such  paper  do  not  happen  in 
the  ordinary  course  of  business  ;  and  when  either  of  them 
does  occur,  the  transferee  is  necessarily  put  on  his  guard. 
He,  therefore,  takes  the  paper  subject  to  all  the  equities 
that   might   be  set  up  against  his  transferrer.*     But  it  is 


325;  Van  Riper  v.  Baldwin,  19  Hun,  34-t;  Randall  v.  Lunt,  51  Me.  246; 
Hersey  v.  Elliot,  69  Me.  526;  Golway  v.  Fullerton,  2  C.  E.  Green,  394; 
Hughes  V.  Nelson,  2  Stew.  Eq.  547;  Foreman  v.  Beckwith,  73  Ind.  55; 
Grover  v.  Grover,  24  Pick.  261;  Hale  v.  Hale,  124  Mass.  292. 

1  Burdick  v.  Green,  15  Johns.  247;  McClaiu  v.  Weidemeyer,  25  Mo. 
364;  McGee  v.  Riddlesbarger,  39  Mo.  365;  Grand  Gulf  Bank  v.  Wood,  12 
Sm.  &M.  482;  Ducarse  v.  Keyser,  28  La.  Ann.  419. 

2  Freeman  v.  Perry,  22  Conn.  617;  Osgood  v.  Artt,  17  Fed.  Rep.  575; 
Davenport  v.  Woodbridge,  8  Me.  17;  Goddrich  w.  Stanley,  23  Conn.  79; 
French  v.  Turner,  15  Ind.  62;  Burrows  v.  Keays,  37  Mich.  431;  Franklin 
V.  Twogood,  18  Iowa,  517. 

3  Bishop  V.  Rowe,  71  Me.  263. 

*  Gibson  v.  Miller,  29  Mich.  355;  Hull  v.  Swartout,  29  Mich.  249; 
Miller  v.  Tharel,  75  N.  C.  148;  Lossee  ■;;.  Bissell,  76  Pa.  St.  459;  Sturges 
V.  Miller,  SO  III.  241;  Peck  v.  Bligh,  37  111.  317:  Allum  v.  Perry,  68  Me. 
232;  Simpson  v.  Hall,  47  Conn.  417;  Jones  v.,  "Witter,  13  Mass.  305; 
Hedges  v.  Sealy,  9  Barb.  214;  McMinu  v.  Freeman,  68  N.  C.  341;  Patter- 
sons. Cave,  61  Mo.  439;  Yonker  v.  Martin,  18  Iowa,  143;  Hadden  v. 
Rodkey,  17  Kan.  429;  Terry  v.  Allis,  16  Wis.  478;  Foreman  v.  Beckwith, 
73  Ind.  515;  Franklin  v.  Twogood,  18  Iowa,  515; 'Planters',  etc.,  Ins.  Co. 
V.  Funstall,  72  Ala.  142;  Matteson  v.  Morris,  40  Mich.  52;  Osgood  v. 
Artt,  17  Fed.  Rep.  575;  Boody  v.  Bartlett,  42  N.  H.  558;  Meggert  v. 
Baum,  57  Miss.  22.  This  same  rule  applies  to  the  transfer  of  an  un- 
indorsed check.  Freund  r.  Importers,  etc.,  Bank,  3  Hun,  689;  s.  c.  12 
Hun,  537;  .s.  c.  afTirmed  in  76  N.  Y.  352. 
408 


CH.  XII.]  TRANSFER    OF    COMMERCIAL    PAPER.    .  §     248 

claimed  that  such  a  bill  so  transferred  is  not  subject  to  fresh 
equities  arising  after  notice  to  the  drawer  of  the  transfer. 
Where  a  bill  or  note,  payable  to  order,  is  transferred 
without  indorsement,  since  the  transferee  acquires  only  the 
equitable  title,  he  can  only  bring  suit  on  the  paper  in  the 
name  of  his  assignor,  at  least  in  those  States,  where  the 
common-law  rules  of  pleading  have  not  been  changed  by 
statute.^  But  in  many  of  the  States,  it  is  now  provided  by 
statute  that  all  actions  shall  be  brought  in  tlie  name  of  the 
real  party  in  interest,  so  that  the  equitable  assignee  of  notes 
and  bills  payable  to  order  can  and  must  bring  suit  in^his 
own  name.^ 

§  248.  Effect  of  a  subsequent  indorsement — Whether 
it  relates  back.  —  If  a  bill  or  note  is  transferred  without 

1  2  Parsons' N.  &  B.  46.     • 

2  Amherst  Academy  v.  Cowls,  6  Pick.  427;  Smalley  v.  Wight,  44  Me. 
442;  Tucker  v.  Tucker,  119  Mass.  79;  Durgin  v.  Bartol,  64  Me.  473; 
Boycev.  Nye,  52  Vt.  372;  Nichols  v.  Gross,  26  Ohio  St.  425;  Robinson  u. 
Wilkinson,  38  Mich.  299;  State  v.  Bank  of  Washington,  18  Ark.  554; 
Hardie  v.  Mills,  20  Ark.  153;  Whistler  v.  Porster,  14  C.  B.  (x.  s.)  248; 
Pease  v.  Hirst,  10  B.  &  C.  122.  This  has  been  held  to  be  the  case,  even 
Tvhere  a  bill  was  drawn  to  the  drawer's  own  order,  and  had  been  trans- 
ferred without  his  indorsement.  It  was  held  that  the  action  had  to  be 
brought  in  the  drawer's  name.     Litcomb  v.  Thomas,  5  Me.  282. 

3  McGee  v.  Riddlesbarger,  39  Mo.  365;  BoeKa  v.  Muella,  28  Mo.  180: 
Lewis  y.  Bowen,  29  Mo.  202;  Williard  v.  Moies,  30  Mo.  142;  Willey  u 
Catling,  70  N.  C.  410;  Andrews  v.  McDaniel,  68  N.  C.  385;  Wilcoxen  y. 
Logan,  91N.  C.  449;  Thornton  u.  Crowther,  24  Mo.  164;  Nelson  v.  Eaton, 
26  N.  Y.  410;  Morris  v.  Poillon,  50  Ala.  403;  Taylor  v.  Reese,  44  Miss.  89; 
Weeks  v.  Medler,  20  Kan.  57.  The  plaintiff  in  suit  on  a  note  or  bill, 
need  not  aver  an  indorsement  in  any  case.  Billings  v.  Jane,  11  Barb.  020. 
In  some  of  the  States  the  assignor  is  required  to  be  made  a  party,  de- 
fendant or  plaintiff.  Keller  v.  Williams,  49  Ind.  504 ;  Perry  v.  Seitz,  2 
Duv.  122.  But  if  a  note  is  assigned  without  indorsement  in  a  State^ 
where  such  assignees  are  permitted  to  sue  in  their  own  names,  the  as- 
signee cannot  claim  this  right  in -the  courts  of  a  State,  which  compels 
8uch  assignees  to  bring  their  actions  in  the  names  of  their  assignors. 
The  lex  fori  determines  tlie  form  of  the  action.  Foss  v.  Nutting,  14  Gray 
484. 

409 


§     24i)  TIJANSFEU    OF    COM.AIKRCIAL    TAPKU.  [CII.  XII. 

indorsement,  but  the  transfer  is  made  with  a  pio-mise  to  in- 
dorse ;  or  the  indorsement  has  been  omitted  on  account  of 
some  accident,  mistake  or  fraud;  the  subsequent  indorse- 
ment M'ill  rehite  back  to  the  time  of  the  transfer,  and  will 
shut  out  all  equities  as  effectually  as  if  it  had  been  made 
at  the  same  time.^  And  the  holder  may,  under  such  circum- 
stances, by  an  appropriate  action,  compel  an  execution  of 
the  indorsement.''*  But  if  the  transfer  is  made  without  any 
promise  of  a  future  indorsement,  the  subsequent  indorse- 
ment does  not  relate  back,  so  that  the  transferee  will  take 
the  instrument  subject  to  any  equity  that  might  come  to 
his  knowledge  before  the  indorsement.^  A  different  rule 
rs  applied  to  the  effect  of  a  subsequent  indorsement  on  the 
right  of  set-off.  It  is  held  that  in  any  case  the  subsequent 
indorsement  relates  back  to  shut  out  all  set-offs,  that  might 
otherwise  be  set  up  in  an  action  by  the  transferee.  The 
right  of  set-off  is  not  an  equity.'*     * 

§   249.   Equitable  or  implied  assignment  of  negotiable 

paper. — The  assignment  of  negotiable  paper  may  occur  in 
equity,  merely  by  operation  of  law,  — an  assignment  that 
is  implied  by  law  by  a  court  of  equity,  in  order    to  carry 

1  Southard  v.  Porter,  43  N.  H.  380;  Haskell  v.  Mitchell,  53  Me.  468; 
Watkins  v.  Maule,  2  Jacob  &  W.  237 ;  Weeks  v.  Medler,  20  Kan,  57.  But 
in  order  that  such  a  subsequent  indorsement  may  shut  out  the  equitable 
defenses,  the  indorsement  must  be  made  before  maturity.  Haskell  v. 
Mitchell,  53  Me.  4G8. 

2  Watkins  v.  Maule,  2  Jacob  &  Walk.  237;, Ex  parte  Greening,  13  Ves. 
206.  And  where  tlic  transferrer  has  in  the  meanwhile  become  bankrupt, 
his  assignee  in  bankruptcy  may  be  directed  to  make  the  indorsement. 
Ex  parte  Rhodes,  3  Mont.  &  Ayr.  217;  Ex  parte  Greening,  13  Ves.  206. 

3  Lancaster  Nat.  Bank  v.  Taylor,  100  Mass.  24 ;  Southard  v.  Porter,  43 
N.  H.  380;  Clark  v.  Whitaker,  50  N.  H.  474;  Whistler  v.  Forster,  14  J. 
Scott,  (n.  8.)  (108  E.  C.  L.  R.)  254.  In  Wisconsin,  it  is  held  that  the  in- 
dorsement will  relate  back  so  as  to  exclude  any  equity  arising  outside  of 
the  note  itself.     Beard  v.  Dedolph,  29  Wis.  136. 

4  Ranger  v.  Carey,  1  Met.  369;  Beard  v.  Dedolph,  29  Wis.  136.  But 
see,  contra,  Odiorne  v.  Woodman,  39  N.  H.  544. 

410 


CH.  XII.]  TRANSFER    OF    COMMERCIAL    PAPER.  §    250 

out  the  real  intent  of  the  parties,  or  to  do  justice  between 
them.  Thus,  if  a  debt  is  assigned,  it  will  carry,  by  impli- 
cation, all  the  papers  which  the  creditor  holds  as  security 
for  the  debt.  This  implied  transfer  of  the  securities  is  an 
equitable  assignment,  which  can  be  effectually  enforced  in 
equity.^  A  renewal  of  a  note  or  bill  will  also  carry  by 
equitable  assignment  all  the  papers  held  as  collateral  se- 
curity of  the  original  paper. ^ 

§  250.  Title  to  commercial  paper  passes  by  sale  without 
delivery. —  It  is  a  general  rule,  according  to  the  common 
law,  that  unless  it  can  be  shown  that  such  was  not  the  in- 
tention of  the  parties,  a  contract  for  the  sale  of  specific 
goods  vests  the  title  thereto  in  the  buyer,  immediately  and 
before  delivery  of  the  goods. ^  This  principle  has  been 
applied  to  commercial  paper,  and  the  opinion  has  been  held 
that  the  purchaser  of  a  note  acquires  on  the  executory  con- 
tract of  sale  such  a  title  to  the  note,  as  to  enable  him  to 
recover  it  of  a  subsequent  holder,  who  took  it  with  notice 
of  the  prior  contract  of  sale.*     But  it  is  still  the  general 

*  Adams  v.  Jones,  12  Ad.  &  E.  455;  Marston  v.  Allen,  8  M.  &  W.  494; 
Hayes  v.  Caulfleld,  5  Q.  B.  81;  Freeman's  Bank  v.  Ruckman,  16  Gratt. 
129 ;  Mechanics'  Bldg.  Assn.,  29  La.  549 ;  Dodge  v.  Bank,  1  McArthur,  420 ; 
Debruh  u.  Maas,  54  Tex.  464;  Fisher  u.  Otis,  3  Chandl.  83;  Garret  v. 
Williams,  31  Ark.  240;  Martin  v.  O'Bannon,  35  Ark.  68;  Murray  v. 
Jones,  50  Ga.  118;  Titcomb  v.  Tliomas,  5  Greenl.  282;  Citizen's  Bank  v. 
Ferry,  32  La.  Ann.  120;  Hallu.  Mobile,  etc.,  R.  R.  Co.,  58  Ala.  10;  Kerhane 
V.  Smith,  97  111.  159;  Walker  u.  Kee,  14  S.  C.  144;  Jones  v.  Witter,  13 
Mass.  282;  Dunn  v.  Snell,  15  Mass.  485;  Miller  u.  Ord,  2  Binn.  382;  Fox 
V.  Foster,  4  Pa.  St.  119;  Waller  v.  Tate,  4  B.  Mon.  529;  Croft  v.  Bunster, 
9  Wis.  503;  Kelley  v.  Whitney,  45  Wis.  110;  Potter  v.  Stranskey,  48  Wis. 
244;  Johnson  17.  Carpenter,  7  Minn.  183;  Holmes  v.  McGintry,  44  Miss. 
94. 

2  Gleason  ^7.  Wright,  55  Miss.  247. 

3  Benjamin  on  Sales  (20  ed.)  226. 

4  Sheldon  v.  Parker,  10  N.  Y.  S.  C.  (3  Hun)  499;  Allison  v.  Barrett,  16 
Iowa,  278.  But  see  Allison  v.  King,  21  Iowa,  302,  where  it  was  held  that 
the  buyer's  title  on  a  contract  of  sale  and  without  delivery  is  so  inchoate 

411 


§    251  TRANSFER    OF    COMMERCIAL    PAPER.  [CH,  XII. 

rule,  that  the  delivery  of  ua  instrument  is  essential  to 
complete  legal  transfer. 

§  251.  Transfer  by  legal  process  —  Attachment,  garn- 
ishment, execution. — The  three  principal  legal  processes, 
^vhereby  property  may  be  transferred  to  a  creditor  in  satis- 
faction of  his  claim,  are  attachment,  garnishment  and  execu- 
tion. They  are  all  the  creatures  of  statute,  and  whether 
commercial  paper  can  be  transferred  by  them  for  the  satis- 
faction of  the  holder's  debts  depends  upon  the  language  of 
the  particular  statute  under  which  the  question  arises.^ 
The  attachment  of  bills  and  notes,  and  other  evidences  of 
indebtedness,  is  expressly  authorized  in  Connecticut,  Mis- 
souri, Minnesota,  Nebraska,  New  York,  Tennessee,  and 
Vermont.^  And  the  right  to  attach  such  instrument  of  in- 
debtedness may  be  inferred  from  the  authority  to  attach 
"  debts,  "  *'  debts,  credits  and  effects,  "  and  from  like 
general  expressions,  contained  in  the  statute  on  the  subject 
of  attachment,  in  Alabama,  Arkansas,  California,  Colorado, 
Delaware,  Florida,  Illinois,  Iowa,  Kansas,  Maryland, 
Michigan,  Mississippi,  Nevada,  New  Jersey,  North  Carolina, 

that  if  delivei-y  was  refused  and  the  commercial  paper  was  afterwards 
levied  on  and  sold  as  the  property  of  the  seller,  after  maturity  and  with 
notice  to  the  first  purchaser,  the  purchaser  under  the  execution  will  ac- 
quire an  absolute  title  to  the  paper. 

'  nexv.  Lambton,  5  Price,  428;  Marston  v.  Allen,  8  M.  &  W.  494; 
Dogan  V.  Dubois,  2  Rich.  Eq.  So;  Clerk  v.  Boyd,  2  Ohio,  56;  Mendenhall 
V.  Baylies,  47  lud.  575;  Wulschner  v.  Sells,  87  Ind.  71;  -Benton  v.  Peters, 
L.  R.  5  Q.  B,  475;  Kittle  v.  Delameter,  3  Neb.  325;  s.  c.  4  Neb.  426;  Good- 
win V.  Davenport,  47  Me.  112;  May  v.  Cassiday,  7  Ark.  376;  Cox  v.  Troy, 
5  B.  &  Aid.  474;  s.  c.  1  D.  &  Ry.  38;  Chapman  v.  Cottrell,  34  L.  J.  Exch. 
186. 

2  See,  post,  chapter  on  Law  of  Place,  as  to  what  law  governs  the  ques- 
tion. 

3  Conn.  G.  S.  (1875)  409,  §  40;  Mo.  Rev.  Stat.  (1879),  §  416;  Minn. 
G.  S.  (1878)  729,  §  150;  Neb.  C.  S.  (1885),  §§  212,  214;  N.  Y.  Code  Civ. 
Proc.  (1882),  §648;  Tenn.  Code  (1884),  §  4236;  Vermont  R.  L.  (1880), 
§  1069. 

412 


CH.  XII. J  TRANSFER    OF    COMMERCIAL    PAPER.  §    251 

Ohio,  Pennsylvaniii,  South  Carolina,  Virginia,  West  Vir- 
ginia.^ Attachment  of  commercial  paper  is  also  held  to  be 
permissible  under  a  general  authority  to  attach  all  kinds 
of  property,  in  Oregon,  Texas,  New  Hampshire  and  Wis- 
consin ^  and  perhaps  in  other  States.^  In  Rhode  Island, 
commercial  paper  is  expressly  exempt  from  attachment,* 
while  in  Maine  and  Massachusetts,  only  bank-notes,  and 
other  evidences  of  indebtedness  of  moneyed  corporations, 
which  pass  current  as  money,  can  be  attached.  Commer- 
cial paper  in  general  cannot  be  attached.  ^  In  Louisiana, 
bills  and  notes  may  be  attached  as  the  property  of  the 
payee,,  even  when  they  are  in  the  hands  of  a  depositary, 
but  it  is  required  in  such  a  case,  that  the  sheriff  must  take 
them  into  his  ijossession.* 

As  a  general  rule,  commercial  paper  in   the  hands  of 
a  depositary  for  the  payee,  and  not  yet  due,  cannot  be 


1  Ala.  Code  (1876),  §  3268;  Ark.  Dig.  Stat.  (1884J,  §  320;  California, 
Code  Civ.  Proc.  (1885),  §  542;  Col.  G.  S.  (1883),  §  2007;  Del.  E.  S. 
(1852)  amd.  1874;  Fla.  McCleb.  Dig.  (1881)  550,  §13;  111.  Ann.  Stat, 
(1885),  313,  ch.  13,  §  8.  But  it  has  been  held  in  Illinois  that  the  statute 
does  not  authorize  the  attachmeut  of  promissory  notes.  Prout  v.  Grout, 
72  111.,  456  Iowa  R.  C  (1880),  §  2907;  Kans.  C.  L.  (1885J,  §§  4002,  4015; 
Md.  R.  C.  (1878),  673,  §  8;  Mich.  C  L.  (1871),  §§  6460,  6471,  6488;  Miss. 
R.  C.  (1880),  §  2423;  Nev.  C.  L.  (1873),  §  1189;  N.  J.  Rev.  Stat.  (1874), 
p.  42;  N.  C.  Code  Civ.  Proc.  (1883),  §§  349,  363;  Ohio  R.  S.  (1880), 
§  5524;Penn.  Pard.  Dig.  (1885)  743,  §  37;  So.  Ca.  Code  Civ.  Proc.  (1882), 
§  253;  Va.  Code  (1873),  1011,  §  9;  W.  Va.  Amd.  Code  (1884),  648,  §  5. 

2  Oreg.  G.  L.  (1872)  137,  §  146, 164;  Tex.  R.  S.  (1879),  art.  167;  Wis. 
R.  S.  (1878),  §2738. 

3  See  Ga.  Code  (1882),  §  3287;  Ind.  R.  S.  (1881)  §  913.  In  New  Hamp- 
shire, since  1867,  only  negotiable  paper,  which  is  made  and  payable  in 
that  State,  can  be  attached.  G.  L.  (1873)  517,  ch.  224,  §  1.  See  Chad- 
bourn  v.  Gilraan,  — N.  H.  (1885) 

4  R.  I.  Pub.  Stat.  (1882),  ch.  209,  §  4. 

«  Me. Rev.  Stat.  676,  §  24;  Mass.  Pub.  Stat.  (1882),  925,  ch.  161,  §  38. 
See  also  Indiana,  R.  S.  (1881),  §  913;  Illinois,  Annot  Stat.  313,  ch.  11, 
§  8  (1885). 

6  Lassiter  v.  Bussy,  14  La.  Ann.  699;  Mille  v.  Hebert,  19  La.  Ann.  58; 
Pleasants  t>.  Kemp,  28  La.  Ann.  124;  Reynolds  v.  Horn,  4  La.  Ann.  187 

413 


§    251  TRANSFER    OF    COMMKRCIAL    PAPER.  [CH.   XII. 

attached.^  Nor  is  commercial  paper  attachable  for  the 
debts  of  the  payee,  when  it  is  in  the  hands  of  a  re- 
ceiver or  assignee  for  the  benefit  of  creditors  ;2  nor 
when  it  is  placed  in  the  hands  of  an  agent  to  collect  and 
apply  the  proceeds  to  the  payment  of  a  specific  debt;" 
and  even  when  it  is  merely  placed  in  the  hands  of  an  agent 
for  collection  or  for  any  other  purpose,  resulting  in  benefit 
to  the  payee.*  It  is  not  even  subject  to  attachment,  if  the 
agent  delivers  it  up  to  the  attaching  officer.^  If  an  agent 
invests  money  of  his  principal  in  a  note  payable  to  himself, 
the  note  will  not  be  subject  to  attachment  in  Vermont  as 
the  property  of  the  principal.® 

It  is  very  generally  held  that  promissory  notes  and 
other  commercial  instruments  cannot  be  garnished  in  the 
hands  of  an  agent,  in  an  attachment  proceeding  against 
the   payee.'     It  is  also  the  general  rule,  that  the  maker 

1  Moore  v.  Pillow,  3  Humph.  448;  Wilson  v.  Albright,  2  Greene 
(Iowa),  125. 

2  Taylor  v.  Gillean,  23  Tex.  508;  Gore  v.  Clisby,  8  Pick.  555. 

8  Dickinson  v.  Strong,  4  Pick.  57;  Clark  v.  Cilley,  36  Ala.  652;  Smith 
V.  Clark,  9  Iowa,  241. 

*  New  Hampshire,  etc.,  Co.  v.  Piatt,  5  N.  II.  193;  Fitch  v.  Waite,  5 
Conn.  117;  Tirrell  v.  Canada,  25  Tex.  455;  Ellison  v.  Tuttle,  26  Tex.  283. 

6  Rhoads  V.  Megonigal,  2  Pa.  St.  39.  But  the  agent  is  not  liable  in 
trover  if  he  retains  a  note  on  account  of  an  attachment  against  his 
principal.     Fletcher  v.  Fletcher,  7  N.  II.  452. 

6  Fuller  V.  Jewett,  37  Vt.  473. 

T  Maine  F.  &  M.  Ins.  Co.  v.  Weeks,  7  Mass.  438;  Perry  v.  Coates,  9 
Mass.  537;  Dickinson  v.  Strong,  4  Pick.  57;  Andrews  v.  Ludlow,  5  Pick. 
28;  Lupton?;.  Cutter,  8  Pick.  298;  Gore  v.  Clisby,  8  Pick  555;  N.  H.  I.  F. 
Co.  V.  Piatt,  5  N.  H.  193;  Stone  v.  Dean,  5  N.  H.  502;  Fletcher  v.  Fletch- 
er, 7  N.  H.  452;  Howland  v.  Spencer,  14  N.  H.  530;  Hitchcock  v.  Eger- 
ton,  8  Vt.  202;  Van  Arace  v.  Jackson,  35  Vt.  173;  Ruondlet  v.  Jordon,  3 
Me.' 47;  Copeland  v.  Weld,  8  Me.  411;  Clark  v.  Viles,  32  Me.  32;  Wilson 
V.  Wood,  34  Me.  123;  Skowhegan  Bank  v.  Farrar,  4G  Me.  293;  Deacon  v. 
Oliver,  14  How.  610;  Fitch  v.  Wait,  5  Conn.  117;  Grosvenor  v.  F.  &  M. 
Bank,  13  Conn.  104;  Raignelr?.  McConnell,  25  Pa.  St.  362;  Jones  ».  Norris, 
2  Ala.  526;  Marston  v.  Carr,  16  Ala.  325;  Moore  v.  Pillow,  3  Humpli. 
448;  Price  u.  Brady,  21  Tex.  614;  Taylor  v.  Gillian,  23  Tex.  508;  Wilson 
V.  Albright,  2  G.  Greene,  125. 
414 


CH.  XII.]  TRANSFER    OF    COMMEUCIAL    TAPER.  §    251 

or  acceptor  of  commerciul  paper  cannot  be  garnished 
under  an  attachment  against  the  payee  or  indorsee,  at 
least  as  long  as  the  paper  is  still  negotiable,  i.e.,  before 
maturity;  the  reason  being  that  its  negotiability  would 
bring  the  claims  of  the  attaching  creditor  into  conflict  with 
'A.hona  fide  holder,  and  subject  the  maker  possibly  to  the 
requirement  of  being  liable  to  two  antagonistic  parties  on 
the  same  indebtedness;  or  at  the  least,  to  subject  him  to 
the  necessity  of  participating  in  another's  lawsuit,  a  result  not 
at  all  contemplated  in  the  issue  of  negotiable  instruments.^ 

1  Dusendorf  v.  Oliver,  8  Kan.  365;  GafEney  v.  Bradford,  2  Bailey,  441; 
Greer  v.  Powell,  1  Bush,  489;  Howe  v.  Hartness,  11  Ohio  St.  449;  Little- 
field  V.  Hodge,  6  Mich.  326;  Bowker  ??.  Hill,  60  Me.  172;  Hubbard  v. 
Williams,  1  Minu.  54;  Gregorys.  Higgins,  10  Cal.  339;  Denhamv.  Pogue, 
20  La.  Ann.  195;  Meyers  v.  Beemau,  9  Ired.  IIG;  Ormondu.  Moye,  11  Ired. 
664;  Wybrants  v.  Rice,  3  Tex.  458;  Iglehart  v.  Moore,  21  Tex.  501;  Bas- 
sett  V.  Garthwaite,  22  Tex.  230;  Davis  i?.  Pawlette,  3  Wis.  300;  Carson  v. 
Allen,  2  Chandl.  123;  Smith  v.  Blatchford,  2Ind.  184.  In  Sheets  v.  Cul- 
ver, 14  La.  449,  the  court  said:  "In  this  case,  negotiable  paper,  sup- 
posed to  belong  to  the  defendant,  is  attempted  to  be  attached,  by  inter- 
rogatories propounded  to  the  maker,  and  upou  the  latter  answering 
that  he  does  not  know  by  whom  his  notes  are  held,  he  is  sought  to  be 
made  liable  as  if  he  had  actually  declared  himself  indebted  to  defendant. 
Untenable  as  such  a  position  would  seejn  to  be,  an  effort  has  been  made 
to  support  it  by  argument.  It  is  said  the  attachment  was  laid  in  the 
garnishee's  hands  before  he  had  notice  of  the  transfer  of  his  notes,  and 
a  series  of  decisions  of  this  court  have  been  cited  to  show  that  the 
transferee  of  a  debt  is  only  possessed,  as  regards  third  persons,  after 
notice  has  been  given  to  the  debtor  of  the  transfer  having  been  made ; 
than  this,  there  is,  perhaps,  no  principle  of  our  laws  better  settled;  but 
it  obviously  applies  only  to  credits  not  in  a  negotiable  form.  As  to 
notes  indorsed  in  blank,  which  circulate  and  pass  from  hand  to  hand 
by  mere  delivery,  it  has  never  been,  nor  can  it  be  pretended,  that  any 
notice  of  transfer  is  necessary.  If,  then,  no  such  notice  is  ever  given, 
how  is  a  garnishee,  who  has  issued  his  promissory  note,  indorsed  in 
blank,  to  know  in  whose  hands  it  happens  to  be  at  the  precise  moment 
when  he  is  called  upon  to  answer  interrogatories?  And  if,  perchance, 
he  were  to  know  that  his  note  was  still  the  property  of  the  defendant, 
and  were  so  to  declare  it,  could  such  a  proceeding  restrain  its 
negotiability?  Could  it  affect  the  rights  of  a  bona  fide  holder?  Sure- 
ly   not.     The    ownership    of     negotiable    paper    is    inces^^antly    vary- 

415' 


§    251  TRANSFER    OF    COMMERCIAL    PAPER.  [CH.  XII. 

But,  on  the  other  liimd,  iu  uiauy  of  the  States,  it  is  held 
that  the  obligors  of  commercial  paper  may  be  garnished, 
and  the  attachment  thus  obtained  will  prevail  as  long  as 
there  is  no  transfer  before  maturity.  In  other  words, 
the  garnishment  is  operative  to  attach  the  claim  or 
credit  of  the  defendant,  represented  by  a  negotiable 
instrument,  but  the  attachment  will  be  defeated  by  a  trans- 
fer to  a  bona  fide  holder.^  In  Vermont  it  is  required  by 
statute  that  the  purchaser  of  a  negotiable  instrument, 
other  than  a  bank,  or  insurance  company,  in  order  to  take 
the  instrument  free  from  the  claims  of  a  subsequent  attach- 
ment, must  give  notice  to  the  maker  or  acceptor  of  its 
transfer  to  him.     He   takes  the  instrument    subject  to  all 

ing,  and  the  obligation  of  the  maker  of  such  instruments  is  not  to  pay  to 
any  particular  person,  but  to  the  holder  at  maturity,  whoever  he  might 
be.  Thus  it  is  obvious,  tliat  the  garnishee,  in  this  case,  could  give  no 
other  answer  than  that  he  has  made,  and  it  is  equally  obvious,  that  by 
jjursuing  this  course,  the  plaintiffs  have  attached  no  property  out  of 
which  their  judgment  can  be  satisfied." 

1  Enos  V.  Tuttle,  3  Coun.  27;  Culver  v.  Parrish,  21  Conn.  408;  Scott 
V.  Hill,  3  Mo.  88;  Walden  v.  Valliant,  15  Mo.  409;  Funkhouser  v.  How, 
24  Mo.  44;  Dickey  ij.  Fox,  24  Mo,  217;  Myers  v.  Beeman,  9  Ired.  116; 
Ormond  v.  Moye,  11  Ired.  504;  Kieffer  v.  Ehler,  18  Pa.  St.  388,  the  court 
saying:  "  To  hold  that  an  attachment  prevents  a  subsequent  bona  fide  in- 
dorsee for  value  from  acquiring  a  good  title,  would  be  almost  a  destruc- 
tion of  one  of  the  essential  characteristics  of  negotiable  paper.  It  would 
be  a  great  injury  to  persons  in  embarrassed  circumstances  holding  such 
paper;  for  no  one  could  buy  it  from  them  with  any  confidence  in  the 
title.  Moreover,  it  would  present  tlie  strange  result,  that  the  more 
hands  such  paper  had  passed  through,  and  the  more  indorsers  there 
were  on  it,  the  less  it  would  be  worth  in  the  money  market;  for  it  would 
be  subject  to  the  more  risks  of  attachment,"  Hill  v.  Kroft,  29  Pa.  St. 
186;  Mayberry  u.  Morris,  02  Ala.  113;  Green  v.  Gillet,  5  Day,  485;  Mims 
r.West,  38  Ga.  18;  Warne  v.  Kendall,  78  111,  598;  Cruett  v.  Jenkins,  53 
Ind.  217,  overruling  Somerville  v.  Brown,  5  Gill,  399,  where  it  was  held 
that  the  attachment  prevailed  against  bona  fide  holders;  Potter  v.  Mc- 
Dowell, 43  Mo.  93;  Mason  v.  Noonan,  7  Wis.  609;  Matheny  v.  Hughes, 
10  Heisk.  401;  Fulweiler  v.  Hughes,  17  Pa.  St.  440;  Day  v.  Zimmerman, 
68  Pa.  St.  72. 

416 


Cll.  Xri.]  TRANSFER    OF    COMMERCIAL    PAPER.  §    251 

attachments,  intervening  before  such  a  notice.^  But  as 
soon  as  the  instrument  becomes  due,  its  negotiability  is  at 
an  end,  and  if  it  be  subsequently  assigned,  the  assignee 
takes  it  subject  to  all  the  defenses  that  can  be  set  up 
against  it  in  the  hands  of  the  holder  at  maturity.  A  prior 
attachment  would  therefore  prevail  against  such  a  transfer 
after  maturity.^  But  in  every  such  case,  the  attachment 
must  precede  the  transfer ;  and  in  some  of  the  cases  it  is 
held  that  the  attachment  by  garnishment  will  not  operate, 
unless  it  be  shoAvn  that  the  defendant  is  at  the  time  the 
holder  of  the  instruments  garnished.^ 

If  the  garnishee  should  in  his  answer  make  the  mistake 
of  admitting  his  indebtedness  to  the  defendants,  judgment 
will  be  entered  up  against  him  in  favor  of  the  attaching 
creditor,  although  it  is  discovered  afterwards  that  the 
negotiable  instrument,  which  represents  the  indebtedness, 

1  Kimball  v.  Gay,  16  Vt.  131;  Chase  v.  Haughton,  16  Vt.  594;  Worden 
I'.  Nourse,  36  Vt.  756.  But  the  notice  is  sufficient,  if  given  to  one  of 
sevej-al  joint  and  several  makers  (Ayott  v.  Smith,  40  "Vt.  532,),  or  to  an 
accommodation  indorser  (Hunt  v.  Miles,  42  Vt.  533).  It  is  not  necessary 
to  give  notice  to  a  surety,  Seward  v.  Garlin,  33  Vt.  583.  Notice  must  be 
given,  by  the  indorsee  or  his  agent;  notice  by  a  stranger  is  not  suffic- 
ient. Peck  V.  Walton,  25  Vt.  33;  Worden  v.  Nourse,  36  Vt.  756.  Knowl- 
edge of  the  transfer  by  the  maker  or  other  primary  obligor  takes  the 
place  of  notice.  Seward  v.  Garlin,  33  Vt.  583;  Farmers,  etc.,  Bank  v. 
Drury,  35  Vt.  469.  But  see  Peck  v.  Walton,  25  Vt.  33.  See  Shetler  v. 
Thomas,  16  Ind.  223;  Elston  v.  Gillis,  69  Ind.  128;  Smith  v.  Blatchford, 
2Ind.  184;  Cadwallader  u.  Hartley,  17  Ind.  520;  Bill  v.  Hauney,  15  La. 
Ann.  654;  Amoskeag  Mfg.  Co.  v.  Gibbs,  28  N.  H.  316. 

2  Mills  V.  Stewart,  12  Ala.  90;  Leslie  v.  Merrill,  58  Ala.  322;  Culver  v. 
Parish,  21  Conn.  408;  Hill  v.  Kroft,  29  Pa.  St.  186;  Burton  v.  Wynne,  55 
Ga.  615;  Cleneay  v.  Junction  R.  R.  Co.,  26  Ind.  375;  Junction  R.  R. 
Co.  V.  Cleneay,  13  Ind.  161;  Huff  v.  Mills,  7  Yerg.  42;  Bassett  v. 
Garthwaite,  22  Tex.  230.  But  see,  contra,  Miller  v.  Streeder,  18  La. 
Ann.  56,  where  it  is  held  that  an  actual  seizure  of  the  instrument  is 
necessaT-y  to  support  an  attachment.  See  also,  contra,  Knisely  v.  Evans, 
34  Ohio  St.  158. 

3  Cleneay  v.  Junction  R.  R.  Co.,  26  Ind.  375;  Junction  R.  R.  Co.  v. 
Cleneay,  13  Ind.  101;  Bassett  v.  Garthwaite,  22  Tex.  230;  Price  v.  Brady, 
21  Tex.  614. 

27  417 


§    251  TRANSFER    OF    COMMERCIAL    PAPER.  [CH.  XII. 

has  been  transferred  to  a  bona  fide  holder.  He  will  be 
liable  to  the  attaching  creditor  as  well  as  to  the  bona  fide 
holder  of  the  instrunieut.^  But  if  he  pleads  that  the  in- 
strument has  been  transferred  by  the  payee,  or  that  he 
does  not  know  whether  the  payee,  or  defendant,  is  still 
the  holder  of  the  instrument,  the  burden  is  then  thrown 
upon  the  garnisher  of  showing  that  the  instrument  has  not 
been  transf erred. ^ 

The  writ  of  execution  is  also  a  creature  of  statute.  At 
common  law,  no  cJiose  in  action  could  be  reached  by  legal 
process  for  the  benefit  of  creditors.  But  in  England  ^  and 
in  many  of  the  States  of  the  American  Union,  au  execu- 
tion, issued  in  satisfaction  of  a  judgment  debt,  is  made  by 
statute  to  cover  the  negotiable  instruments,  payable  to  the 
judgment  debtor.  Execution  maybe  levied  on  all  kinds  of 
choses  in  action,  including  negotiable  instruments,  in  Cali- 
fornia, Iowa,  Kansas,  Minnesota,  Nevada,  Oregon,  Pennsyl- 
vania, Texas,  and  West  Virginia.*  Execution  may  be 
levied  on  negotiable  instruments  only  in  Missouri,  New 
York,  Wisconsin.®     In  Arkansas,  Colorado,  Illinois,  Indi- 


1  Crayton  v.  Clark,  11  Ala.  787;  Bibb  v.  Tomberlin,  1  Duv.  186;  Cross 
r.  Halderman,  1 5  Ark.  200;  Daniels  v.  Rawlings,  6  Humph.  403;  Yar- 
borough  V.  Thompson,  3  Sm.  &  M.  291. 

2  Ormond  v.  Moye,  11  Ired.  564;  Thompson  v.  Shelby,  3  Sra.  &  M. 
296;  Davis  V.  Pawlette,  3  Wis.  300;  Foster  v.  Walker,  Ala.  177;  Wicks 
V.  Branch  Bank,  12  Ala.  594;  Turner  v.  Armstrong,  9  Yerg.  412;  Daniel 
V.  Rawlings,  G  Humph.  403 ;  McNeill  v.  Roach,  49  Miss.  436. 

3  1  &  2  Vict.,  c.  110,  §12. 

i  Cal.  Dearing's  Code  (1885),  C  P.,  §688;  Iowa  R.  C.  (1880),  §  3046; 
Savery  V.  Hays,  20  Iowa,  25;  Hetherington  v.  Hayden,  11  Iowa,  335; 
Earhart  u.  Gant,  32  lowa^  481;  Allison  ».  Barrett,  16  Iowa,  278;  Kau. 
Dassler's  C.  L.  (1885),  §  4294;  Minn.  G.  S.  (1878),  p.  755,  §  300; 
Nev.  C.  L.  (1873),  §  1280;  Oregon  G.  L.  (1872),  164;  Pa.  Pard. 
Dig.  (1885),  741,  §§  15,  17;  Texas  R.  S.  (1879),  art.  167;  W.  Va.  Arad. 
Code  (1884),  648,  §  5.  SeeKy.  G.  S.  (1881),  417,  ch.  38,  §  2;  Fla.  McClell. 
Dig.  Laws  (1881)  522,  §  6. 

*  In  Missouri,  on  notes,  bill,  bonds  and  certificates  of  deposit.  Mo. 
Rev.  Stat,  (1870),  §  2358;  N.  Y.  Code  Civ.  Proc,  §1411;  Ingall^t?.  Lord, 
418 


CH.  XII.]  TRANSFER    OF    COMMERCIAL    PAPER.  §    252 

ana,  Maine,  Massachusetts,  Mississippi,  New  Hampshire, 
New  Jersey,  Vermont,  and  Viriginia,  only  those  negotiable 
instruments  may  be  levied  upon,  which  circulate  as  money 
like  bank-notes.  Other  negotiable  instruments  cannot  be 
reached  by  execution.^  All  choses  in  action^  including 
negotiable  instruments,  are  beyond  the  reach  of  an  execu- 
tion in  Alabama,  Florida,  Georgia,  Michigan,  Ohio.^ 

It  may  be  added  that  the  choses  in  action  of  the  debtor 
may  be  reached  by  the  creditor  by  equitable  or  supplement- 
ary proceedings  in  Delaware,  Nebraska,  South  Carolina, 
and  Tennessee.^ 

§  252.  Transfer  douatio  mortis  causa.  —  A  gift  made 
in  contemplation  of  the  death  of  the  donor  is  called  in  the 
civil  law,  from  which  all  the  principles  of  the  law  are 
taken,  donatio  mortis  causa.  In  order  that  it  may  take 
effect  in  passing  the  absolute  title  to  the  thing  donated, 
the  following  requisites  must  concur:  (1)  it  must  be  made 
in  immediate  apprehension  of  death;  *  (2)  that  the  donor 

1  Cow.  249;  Ransom  V.  Miner,  3  Saudf.  692;  Wis.  R.  S.  (1878),  §  2987. 
A  levy  on  promissory  note  can  only  be  made  by  getting  possession  of 
note.    Anthony  v.  Wood,  96  N.  Y.  181. 

1  Col.  G.  S.  (1883),  §  1876;  111.  Ann.  Stat.  Starr  &  Curtis  (1885),  1408, 
ch.  77,  §  42;  Arli.  Dig.  Stat.  (1884),  §  3001;  Field  v.  Lawson,  5  Arli.  376; 
ind.  R.S.  (1881),  §721;  Jolmson  v.  Crawford,  6Blac]if.  377;  McClellan  v. 
Hubbard,  2  Blaclif.  361;  McKuiglit  v.  Kinsely,  25  Ind.  336;  Me.  R.  S. 
(1883)  721;  §§  1,  2;  Bowker  v.  Hill,  60  Me.  172;  Smith  v.  Kennebec, 
etc.,  R.  R.  Co.,  45  Me.  547;  Mass.  Pub.  Stat.  (1882)  1004,  ch.  171,  §  33; 
Perry  r.Coates,  9  Mass.  537;  Miss.  R.  C.  (1880),  §  1765;  N.  H.  G.  L. 
(1878)  545,  ch.  236,  §  1;  N.  J.  Rev.  (1874),  389,  §  4;  Vt.  R.  L.  (1880)  § 
1555;  Va.  Code  (1878)   1175,  §  27. 

.  -  Ala.  Code  (1876;,  §  3209;  Jones  v.  Morris,.2  Ala.  526;  Fla.  McClell. 
Dig.  Laws  (1881)  522,  §  6;  Ga.  Code  (1882),  §  3632;  McGehee  v.  Cherry, 
6  Ga.  550;  People  v.  Auditors,  5  Mich.  223;  2  R.  S.  Ohio  (1880),  §  5374. 

*  Robinson  v.  Mitchell,  1  Harr.  365;  Neb.  C.  S.  688,  §§  476,  532;  So. 
Ca.  Code  (1882),  §317;   Tenn.  Code  (1884),  §  3810. 

*  A  gift  in  expectation  of  the  future  possibility  of  death,  —  as  where 
a  soldier,  on  going  out  to  a  war,  or  a  sailor,  on  the  eve  of  a  long  voyage, 

419 


§    252  TRANSFER    OF    COMMERCIAL    PAPER.  [clI.   XII. 

should  die  of  the  same  aihneut  which  cuused  the  apprehen- 
sion of  death  ;  ^  (3)  tlicrc  must  be  a  delivery,  actual  or 
symbolical,  and,  (4)  it  nmst  be  accepted  by  the  donee. 

The  sjift  may  be  delivered  to  the  donee,  or  to  some  third 
person  for  him.^  The  third  person,  to  whom  it  is  delivered, 
must  in  turn  deliver  it  to  the  intended  donee,  at  or  before 
the  donor's  death. ^  Or  it  may  be  returned  to  the  donor  to 
keep  or  to  collect  for  the  donee. ^  The  delivery  need  not 
be  actual  and  manual.  It  may  be  constructive,  and  im- 
plied from  acts  which  indicate  clearly  the  intention  to 
transfer  title.® 


makes  a  gift  to  take  effect  if  he  does  not  return,  —  is  not  a  good  donatio 
mortis  causa.  Gourley  v.  Linsenbigler,  51  Pa.  St.  345;  Brickhouse  v. 
Brickhouse,  11  Ired.  404;  Irish  v.  Nutting,  47  Barb.  370.  Audit  must 
appear  by  satisfactory  evidence  that  the  gift  was  made  in  apprehension 
of  death.  Edwards  w.  Jones,  1  My.  &  Cr.  226.  But  the  length  of  time 
before  the  death  is  not  essential,  provided  at  the  time  the  gift  was  made 
there  was  an  immediate  appreliension  of  death.  Gardners.  Gardner,  22, 
Wend.  52(j;  Darland  v.  Taylor,  52  Iowa  503. 

1  The  recovery  of  the  donor  defeats  the  gift.  Staniland  v.  Willott,  3 
MacN.  &  G.  6G4.  And  the  donor  may  revoke  the  gift  at  any  time  before 
his  death.     Parker  v.  Marston,  27  Me   196, 

2  Ward  V.  Turner,  2  Ves.  sr.  431;  McKenzie  v.  Downing,  25 Ga.  669; 
Jones  V.  Deyer,  16  Ala.  221.  There  may  be  a  delivery  to  one  person  for 
the  benefit  of  two  or  more  donees.  Borueman  v.  Sidlinger,  15  Me.  429; 
Brunson  v.  Brunson,  Meigs,  635.  In  any  case  the  intention  to  deliver 
must  be  made  clear.     Dunne  v.  Boyd,  I.  R.  8  Eq.  G09. 

3  Sessions  v.  Moseley,  4  Cush.  87.  And  if  the  holder  refuses  to  so 
deliver  it  to  the  donee,  the  latter  may  recover  it  of  him  by  an  appropriate 
action.     Contant  v.  Schuyler,  1  Paige,  316;  Wells  v.  Tucker,  3  Binn.  366. 

*  Grover  v.  Grover,  24  Pick.  261. 

6  A  direction  to  a  trustee  to  give  a  note,  belonging  to  the  donor,  to  the 
donee,  is  a  good  constructive  delivery.  Southerland  v.  Southerland,  4 
Buch.  591 ;  an  attorney's  receipt  for  a  bond  in  his  possession  at  the  di- 
rection of  the  donor,  Elam  v.  Keen,  4  Leigh.  333;  a  wife's  direction  t6 
her  husband  to  take  the  mouey,  referring  to  a  note  in  a  bureau  drawer, 
Stevens  v.  Stevens,  2  Hun,  470;  the  surrender  or  destruction  of  the 
donee's  bill  or  note.  Garland  v.  Garland,  22  Wend.  526;  Lee  v.  Boak,  11 
Gratt.  182;  Ilurst  v.  Beach,  5  Madd.  351 ;  Darland  v.  Taylor,  52  Iowa,  503- 
But  see  Blanchard  v.  Sheldon,  43  Vt.  512. 
420 


CH.  XII.]  TRANSFER    OF    COMMERCIAL    PAPER.  §    252 

At  first  it  was  held  that  only  things,  which  were  suscept- 
ible of  manual  delivery,  could  pass  by  a  donatio  mortis 
causa;  but  the  rule  began  immediately  to  be  relaxed  and 
extended  in  its  application,  so  as  to  admit  of  the  gift  in 
this  way  of  negotiable  bills  and  notes,  either  payable  to 
bearer,  or  indorsed  by  the  donor  in  blank. ^  It  was  once 
doubted  whether  there  could  be  a  good  donatio  mortis 
causa  of  an  unindorsed  negotiable  paper,  payable  to 
order. 2  But  it  is  now  very  generally  held  that  for  the  pur- 
pose of  a  donatio  m,ortis  cawsa, the  indorsement  was  a  mere 
technicality,  and  that  there  may  be  a  good  gift  of  the  ne- 
gotiable instrument  without  indorsement  by  the  donor.^ 
The  donee  in  such  a  case  gets  only  the  equitable  title,*  and 
must  bring  suit  in  the  name  of  the  donor's  personal 
representatives,  unless  the  common-law  rule  in  regard 
to  assignment  of  choses  in  actions  has  been  repealed, 
when  the   donee  can    sue    in  his  own  name ;  ^  or   he  may 

1  Rankin  v.  Wegnelin,  27  Beav.  309;  Veal  v.  Veal,  27  Beav.  303 ;  Drury 
V.  Smith,  1  P.  Wms.  405;  Lawson  v.  Lawson,  1  P.  Wms.  411;  Miller  v. 
Miller,  3  P.  Wms.  356;  Weston  v.  Hight,  17  Me.  287;  House  v.  Grant, 
4  Lans.  296;  Burke  v.  Bishop,  27  La.  Ann.  465  (27  Am.  Rep,  567)  ;  Turpin 
V.  Thompson,  2  Met.  CKy.)  420.  Where  the  donor  has  indorsed  the 
paper,  the  indorsement  only  operates  as  a  transfer  of  the  donor's  legal 
title,  and  does  not  make  his  estate  liable  as  an  indorser.  Weston  v. 
Hight,  17  Me.  287.  See  also  Veal  v.  Veal,  27  Beav.  303;  Rankin  v. 
Wegnelin,  27  Beav.  309. 

2  Miller  v.  Miller,  3  P.  Wms.  356;  1  Daniel's  Negot.  Inst.,§  24;  Chitty 
on  Bills,  3. 

3  Veal  V.  Veal,  27  Beav.  303;  Rankin  v.  Wegnelin,  27  Beav.  309; 
Borneman  v.  Sedlinger,  15  Me.  429;  Parker  v  Marston,  27  Me.  196;  Bates 
V.  Kempton,  7  Gray,  382;  Grover  v.  Grover,  24  Pick.  261 ;  Chase  v.  Red- 
ding, 13  Gray,  418;  Keniston  v.  Scena,  54  N.  H.  24;  Brown  v.  Brown,  18 
Conn.  409;  McConnellr.  McConnell,  11  Vt.  290;  Tillinghast  v.  Wheaton, 
8  R.  I.  536;  Stevens  v.  Stevens,  9  N.  Y.  S.  C.  (2  Hun)  472;  Contant  «. 
Schuyler,  1  Paige,  315;  Turpin  v.  Thompson,  2  Met.  (Ky.)  430;  Jones  v. 
Deyer,  16  Ala.  221. 

<  Ashbrook  v.  Pyon,  2  Bush,  228. 
*  SeearUe,  §  241. 

421 


§    252  TRANSFER    OF    COMMKRCIAL    PAPER.  [cll.  XII. 

compel  the  donor's  representatives  to  indorse  the  paper  for 
him.^ 

But  a  donor  cannot  make  a  donatio  mortis  causa  of  his 
own  bill  of  exchange,  or  promissory  note,  for  the  reason 
that  it  constitutes  a  contract  without  a  consideration,  which 
cannot  be  enforced  in  the  courts. ^ 

As  a  general  rule  the  gift  of  the  donor's  check,  which  is 
not  presented  until  after  the  death  of  the  donor,  is  held  to 
be  an  invalid  donatio  mortis  causa.'^  But  if  such  a  check  is 
paid  by  the  bank,  before  receiving  notice  of  the  drawer's 
death,*  or  it  passes  into  the  hands  of  a  bona  fide  holder  be- 
fore the  donor's  death, ^  it  passes  a  good  title,  and  may  be 
enforced  against  the  donor's  estate. 

1  Veal  V.  Veal,  27  Beav.  303;  Rankin  v.  Wegnelin,  27  Beav.  309;  Duf- 
fleld  V.  Elwes,  1  Bligh  N.  R.  409. 

2  Fink  V.  Cox,  18  Johns.  145;  Harris  v.  Clark,  3  N.  Y.  93,  overruling 
Wright  V.  Wright,  1  Cow.  598;  Copp  t;.  Sawyer,  6  N.  H.  38(J;  Phelps  v. 
Pond,  23  N.  Y.  69;  Hamor  v.  Moore,  8  Ohio  St.  239;  Blanchard  v.  Will- 
iamson, 70  111.  647;  De  Pouilly's  Succession,  22  La.  Ann.  97;  Parish  v. 
Stone,  74  Pick.  198;  Warren  t>.  Durfee,  126  Mass.  338;  Flint «.  Paltee, 
33  N.  H.  520;  Holly  v.  Adams,  16  Vt.  206;  Smith  v.  Kittredge,  21  Vt.  238; 
Raymond  v.  Sellick,  10  Conn.  480;  Voorhees  v.  WoodhuU,  4  Vroom,  494; 
Helfenstein's  Estate,  77  Pa.  St.  328;  Hall  v.  Howard,  Rice,  310;Smith  v. 
Smith,  3  Stew.  Eq.  564.  But  where  there  is  a  valuable  consideration  for 
the  note,  the  transfer  will  be  upheld  by  the  courts.  Dean  v.  Carruth, 
108  Mass.  242;  Bowers  v.  Hurd,  10  Mass.  427. 

^  Curry?;.  Powers,  70  X.  Y.  212;  Simmons  v.  Cincinnati  Sav.  Soc,  31 
Ohio  St.  457;  Second  Nat.  Bank  v.  Williams,  13  Mich.  282;  Bouts  v. 
Ellis,  17  Beav.  121 ;  4  DeG.  M.  &  G.  249;  Beak  v.  Beak,  L.  R.  13  Eq.  489; 
DePouilly's  Succession,  22  La.  Ann.  97. 

*  Tate  V.  Hilbert,  2  Ves.  jr.  Ill;  s.  c.  4  Bro.  C.  C.  280. 

5  Rolls  V.  Pearce,  L.  R.  5  Ch.  D.  730.  See  Lawson  v.  Lawson,  1  P. 
Wms.  441. 

422 


CHAPTER    XIII. 

TRANSFER   BY  INDORSEIVIENT, 

Section  256.  The  meaning  of  iudorsemeut  —  Includes  delivery. 

257.  When  indorsement  necessary  to  pass  legal  title. 
257a.  Indorsement  of  instruments  payable  to  bearer. 
2576.  Indorsement  of  non-negotiable  instruments. 

258.  Indorsements  cannot  be  partial. 

259.  The  liability  of  an  indorser. 

260.  Liability  of  indorser  "without  recourse." 

261.  Successive  indorsers  —  When  liable  to  each  other  for  con- 

tribution. 

262.  By  whom  the  indorsement  can  be  made. 

263.  To  whom  the  indorsement  may  be  made. 

264.  The  place  for  the  indorsement  —  Allonge. 

265.  Form  of  the  indorsement. 

266.  Indorsements  in  full  and  in  blank. 

267.  Absolute  and  conditional  indorsements. 

268.  Restrictive  indorsements. 

269.  Time  and  place  of  indorsement  and  transfer. 

270.  Irregular  indorsements  —  Joint  makers,  sureties,  guaran- 

tors, indorsers. 

271.  Irregular  indorsements  —  Continued. 

272.  Admissibility  of  parol   evidence  in  respect  to  irregular 

indorsements. 

273.  Limitations  upon  admissibility  of  parol  evidence  in  respect 

to  irregular  indorsements. 

274.  Admissibility  of  parol  evidence  in  respect  to  indorsements 

in  general. 

§  256.  The  meaning  of  indorsement  —  Includes  deliv- 
ery. —  The  term  indorsement  means  literally,  writing  on  the 
back,  being  derived  from  the  words  in  dorsa.  In  this  sense 
any  kind  of  instrument  of  indebtedness  may  be  indorsed.^ 
But  the  word  has  acquired  a  technical  sense;   and  in  that 

1  For  a  discussion  of  irregular  indorsement,  s&epost,  §§  270,  271. 

423 


§    25G  TRANSFER    BV    INDORSEMENT.  [CH.  XIII. 

technical  sense  it  means  "  writing  one's  name  thereon  with 
intent  to  incur  the  liability  of  a  party,  who  warrants  pay- 
ment of  the  instrument,  provided  it  is  duly  presented  to 
the  principal  at  maturity,  not  paid  by  him,  and  such  fact 
is  duly  notified  to  the  indorser."  ^  In  this  technical  sense 
it  is  applicable  only  to  negotiable  paper.  The  indorsement 
is  not  only  a  transfer  of  a  pre-existing  negotiable  instru- 
ment, but  it  is  itself  an  original  independent  contract.  It 
is  equivalent  to  the  drawing  of  a  new  bill  on  the  maker,  or 
drawer  and  acceptor,  as  the  case  may  be,  of  the  instrument 
that  is  indorsed.-  It  is  so  independent  of  the  indorsed  in- 
strument that  at  common  law  the  indorser  could  not  be 
sued  in  the  same  action  with  the  drawer,  acceptor  or 
maker. ^  And  its  validity  may  be  affected,  like  any  other 
contract,  and  is  determined  by  the  circumstances  existing 
when  the  indorsement  was  made.*  The  indorsement  must 
also  be  supported  by  a  consideration.^ 

The  term  indorsement  includes  also  the  idea  of  delivery. 
An  indorsement  does  not  pass  title,  until  the  indorsed  instru- 
ment has  been  delivered;*'  and,  therefore,  when  a  negotia- 
ble instrument  is  said  to  have  been  indorsed  to  another,  it 
is  understood,  unless  it  is  expressly  limited  in   meaning, 

1  1  Daniel's  Negot.  Inst.,  §  666. 

-  Hill  V.  Lewis,  1  Salk.  132;  Cundy  v.  Momott,  1  B.  &  A.  696;  Suse  v. 
Pompe,  98  E.  C.  L.  R.  538;  Sinker  v.  Fletcher,  61  Ind.  276;  Kilgore  r. 
Bulkley,  14  Conn.  362;  Evaus  v.  Gee,  11  Pet.  80;  Ingalls  v.  Lee,  9  Barb. 
947;  Van  Staphorst  v.  Pearce,  4  Mass.  258;  Bellgerryt?.  Branch,  19  6ratt. 
418;  Brown  v.  Hull,  33  Gratt.  29. 

3  Patterson  v.  Todd,  18  Pa.  St.  426;  Brown  v.  Hull,  33  Gratt.  29. 

<  Willison  V.  Pattison,  8  Taunt.  439  (2  E.  C.  L.  R.) ;  1  J.  B.  Moore,  133; 
Griswoldw.  Waddington,  16  Johns.  438;  Billgerry  i;.  Branch,  19  Gratt. 
417;  Brown  v.  Hull,  33  Gratt.  29. 

5  McKnight  v.  Wheeler,  6  Hill.  492;  Sanders  v.  Bacon,  8  Johns.  485; 
Morrison  v.  Lovell,  4  W.  Va.346:  Succession  of  Weil,  24  La.  Ann.  139; 
Freeman  v.  Bingham,  65  Ga.  580. 

6  Rex  V.  Lambtou,  5  Price,  528;  Lysaght  v.  Bryant,  9  C.  B.  (67  E.  C. 
L.  R.)  46. 

424 


CH.  XIII.]  TRANSFER    BY    INDORSEMENT.  §    257 

that  it  has  been  delivered  to  that  person,  and  for  a  valuable 
consideration.^ 

Acceptance  by  the  indorsee  is  also  necessary  to  a  com- 
plete transfer  of  the  title.  And  if  the  indorsee  declines  to 
accept,  and  returns  the  paper,  there  is  no  need  for  any 
re-indorsement  back  to  the  indorser,  for  the  title  does  not 
pass  out  of  the  indorser,  by  virtue  of  the  indorsement,  un- 
til the  paper  has  been  delivered  to,  and  accepted  by,  the 
indorsee.  The  indorsee  could  not  afterwards,  merely  by 
getting  possession  of  the  paper,  acquire  any  title  to  it,  on 
account  of  the  indorsement.  But  the  same  indorsement 
will  answer,  if  there  is  a  second  delivery  by  the  indorser. ^ 

§  257.  When  indorsement  necessary  to  pass  legal  title. 

An  indorsement  is  necessary  to  pass  legal  title,  only  when  the 
negotiable  instrument  is  made  payable  to  order. ^  Although 
the  equitable  title  to  such  instruments  may  pass  by  simple  de- 
livery without  indorsement  or  by  assignment,*  the  complete 
title  can  only  be  transferred  by  indorsement  and  delivery.^ 
The  negotiability  of  the  paper  is  not  destroyed  by  the  in- 
dorsement being  made  by  a  corporation  under  seal.^ 

1  Adams  r.  Joues,  12  Ad.  &  El.  (40  E.  C.  L.  R.)  455;  Lloyd  v.  How- 
ard, 20  L.  J.  Q.  B.  (69  E.  C.  L.  R.)  1 ;  14  Q.  B.  995;  Green  v.  Steer,  1  Q.  B, 
(40  E.  C.  L.  R.)  707;  Hayes  v.  Caulfleld,  5  Q.  B.  (48  E.  C.  L.  R.)  81 
Marstonv.  Allen,  8  M.  &  W.  493;  Dunn  v.  Morris,  24  Conn.  333;  Bank  of 
Mariettas.  Pindall,  2  Rand.  475;  Freeman's  Bank  v.  Ruckman,  16  Gratt, 
129;  Thomas  v.  Watkins,  16  Wis,  478;  Frederick  v.  Wynans,  51  Wis 
472. 

'■1  Daniel's  Negot.  Inst.,  §  665;  Cartwright  v.  Williams,  2  Stark.  340 

8  In  Illinois  and  Alabama,  by  statute,  it  is  provided  that  a  paper,  pay- 
able to  the  payee  or  bearer,  must  be  indorsed,  in  order  to  pass  title 
Garvin  v.  Wiswell,  83  Hi.  218;  Hillborn  v.  Artus^  3  Scammon  344;  Roosa 
V.  Crist,  17111.  191;  Wilder  v.  De  Wolf,  24  111.  191;  Blackman  v,  Leh- 
man, 63  Ala.  547. 

*  See  ante,  §  247. 

5  Hopkirk  v.  Page,  2  Brock.  20;  Blakely  v.  Grant,  6  Mass.  386;  Russell 
V.  Swan,  16  Mass.  3U;  Hestone  v.  Williamson,  2  Bibb,  83. 

6  Raud  V.  Dovey,  83  Pa.  St.  280. 

425 


§    2576  TRANSFER    BY    INDORSEMENT.  [CH.   XIII. 

§  257a.  Indorsement  of  instruments  payable  to  bear- 
er. —  The  indorsement  of  instruments  payable  to  bearer, 
altliouo;h  not  necessary  to  pass  the  legal  title  thereto,^ 
will  impose  upon  the  indorser  the  same  liability  as 
that  which  rests  upon  the  indorser  of  paper,  payable  to 
order,  and  requiring  indorsement  in  order  to  pass  the  legal 
title.  This  liability  is  sustained  to  all  subsequent  holders, 
whether  indorsees  or  not.^ 

§   2576.  Indorsement  of  non-neg-otiable  instruments. — 

Although  it  has  been  held  that  the  indorser  of  non-negotia- 
ble paper  is  not  liable  as  an  indorser  on  his  indorsement, 
unless  he  has  made  the  paper  *'  with  recourse,"  or  in  some 
other  way  indicated  on  the  paper  his  intention  to  bind  him- 
self as  an  indorser;^  it  is  very  generally  held  that  the  in- 
dorsement of  a  non-negotiable  instrument  will,  as  in  the 
case  of  negotiable  paper,  make  the  indorser  liable,  at  least, 
to  his  immediate  indorsee.^     This  liability  exists,  not  only 

1  In  Illinois  and  Alabama,  indorsement  is  by  statute  made  necessary 
to  pass  the  legal  title  of  paper  payable  to  bearer.  Garvin  v.  Wiswell,  83 
111.  218;  Wilder  v.  DeWolf,  24  III.  191;  Eosa  v.  Crist,  17  111.  191;  Hill- 
born  V.  Artus,  3  Scammon,  344 ;  Blackman  v.  Lehman,  G3  Ala.  547. 

2  «'  The  negotiability  of  a  note  payable  to  bearer  is  certainly  not 
farther  restrained  by  an  indorsement  in  full,  than  would  be  by  the  same  in- 
dorsement the  negotiability  of  a  note  payable  to  order,  and  indorsed  In 
blank  by  the  payee."  Johnson  v.  Mitchell,  SOTex.  212 ;  Bates  v.  Butler,  46 
Me.  387;  Smith  v.  Rawson,  Gl  Ga.  208;  Hodge  v.  Steward,  1  Salk.  125; 
Hill  V.  Lewis,  1  Salk.  132;  Brush  v.  Reeves,  3  Johns.  439;  Eccles  v. 
Ballard,  2  McCord,  388;  Burmester  v.  Hogarth,  11  M.  &  W.  97;  Gwinnell 
V.  Herbert,  5  Ad.  &  E.  (31  E.  C.  L.  R.)  43G;  Gilbert  v.  Nantucket  Bank, 
5  Mass.  97.     See  jiost,  §  270. 

3  Klein  v.  Keiser,  87  Pa.  St.  485.  See  Prevail  v.  Fitch,  5  Whart.  325; 
Gray  v.  Donahoe,  4  Watts,  400;  Samstag  v.  Conley,  64  Mo.  476.  In  such 
cases  it  is  held  liable  only  as  an  ordinary  assignor.  Campbell  v.  Farm- 
ers' Bank,  10  Bush,  152;  Story  v.  Lamb,  52  Mich.  525.  Thus  in  case 
the  maker  of  such  paper  is  insolvent,  the  indorser  is  liable  to  his  in- 
dorsee for  the  consideration  paid.     Whisler  v.  Bragg,  31  Mo.  124. 

*  lUll'v.   Lewis,  1  Salk.  132;  Smith   v.  Kendall,  G  T.  R.  123;  Small- 
wood  V.  Vernon,  1  Stra.  478;  Rex  v   Box,  6  Taunt.  325;  Long  v.  Smy^er,. 
426 


CH.  XIII. J  TKANSFER    BY    INDORSEMENT.  §    2576 

when  the  indorsement  is  special,  but  also  when  it  is  blank; 
and  it  may  be  likened  to  the  liability  of  the  drawer  of  a 
bill  or  that  of  a  guarantor.^  The  liability  is  said  to  differ 
from  the  liability  of  an  ordinary  indorser  of  negotiable 
paper  in  that  it  is  an  absolute  guaranty,  and  not  dependent 
upon  a  previous  demand  and  notice  of  non-payment.^ 
Another  difference  between  the  indorsements  of  negotiable 
and  non-negotiable  paper,  as  recognized  by  some  of  the 
courts,  is  that  the  indorser  of  non-negotiable  paper  can- 
not be  sued  jointly  with  the  maker,  as  in  the  case  of  ne- 
gotiable paper.  ^ 

3  Iowa,  266;  Wilson  v.  Ralph,  3  Iowa,  450;  Jones  v.  Tales,  4  Mass.  245; 
Sweetzer  v.  French,  13  Met.  262;  Parker  «.  Riddle,  11  Ohio,  102;  Smurr 
V.  Forman,  1  Ohio,  272;  White  v.  Low,  7  Barb.  204;  Aklis  v.  Johnson,  1 
Vt.  136;  Snyder  v.  Oatman,  16  Ind.  265. 

1  "The  indorsement  and  transfer  of  a  non-negotiable  note  is  good,  so 
as  to  make  the  indorsers  liable  to  the  indorsees,  although  it  will  not  give 
an  Indorsee  a  right  of  action  in  his  own  name  against  the  maker.  The 
indorsement  in  such  a  case  is  equivalent  to  the  making  of  a  new  note. 
It  is  a  guaranty  that  the  note  will  be  paid.  It  is  a  direct  and  positive 
undertaking  on  the  part  of  the  indorser  to  pay  the  note  to  the  indorsee 
and  not  a  conditional  one  to  pay,  if  the  maker  does  not  upon  demand  and 
after  due  notice."  Sutherland,  J.,  in  Seymour  v.  Van  Slyck,  8  Wend. 
403.  See,  too,  Cromwell  v.  Hewitt,  40  N.  Y.  491 ;  Wilson  v.  Mullen,  3 
McCord,  236 ;  Belliugham  v.  Bryan,  10  Iowa,  317 ;  Huntington  v.  Harvey, 

4  Conn.  124;  Perkins  v.  Catlin,  11  Conn.  213;  Prentiss  v.  Danielson,  5 
Conn.  175;  Castle  v.  Candees,  16  Conn.  223;  Gorman  v.  Ketcham,  3  Wis- 
427.  That  such  an  indorsement  is  the  drawing  of  a  new  bill.  See  Mat- 
thews V.  Bloxom,  33  L.  J.  Q.  B.  209;  Kobitz  v.  Tempel,  48  Mo.  71; 
Aldis  V.  Johnson,  1  Vt.  136. 

2  Peddicord  v.  Whittam,  9  Iowa,  471;  Cromwell  v.  Hewitt,  40  N.  Y. 
491;  Seymour  v.  Van  Slyck,  8  Wend.  403;  Gilbert  v.  Seymour,  44  Ga.  63; 
Plimley  v.  Westley,  2  Scott,  423.  But  it  must  be  shown  that  there  has 
been  due  diligence  in  securing  the  payment  from  the  maker  or  drawer. 
Castle  V.  Cundee,  16  Conn.  223;  Welton  v.  Scott,  4  Conn.  527;  Wilson  v. 
Mullen,  3  McCord,  236  ;  Benton  v.  Gibson,  1  Hill  (S.  C),  56.  But  in  North 
Carolina,  it  is  held  that  notice  of  non-payment  must  be  given,  as  in  the 
case  of  negotiable  instruments  in  order  to  hold  the  indorser  of  a  non- 
negotiable  instrument  liable.     Sutton  v.  Owen,  65  N.  C.  123. 

3  First  Nat.  Bank  of  Trenton  v.  Gay,  71  Mo.  627 ;  Cochran  v.  Strong, 
44  Ga.  636. 

427 


§     258  TRANSFER    BY    INDORSEMENT.  [cil.  XIII. 

But  it  seems  that  in  order  that  a  non-nes:otiable  iustru- 
meat  may  be  iudorsed,  and  the  indorser  assume  the  ordi- 
nary liability  of  an  indorser,  the  instrument  must  fall  under 
the  head  of  commercial  paper;  in  other  words,  it  must  be 
^wasi-negotiable.  Thus  the  indorsement  of  a  judgment  on 
a  note  does  not  create  the  liability  of  an  indorser.^ 

Finally,  the  indorsement  of  a  non-negotiable  instrument 
does  not  give  a  cause  of  action  to  any  one  but  the  imme- 
diate indorsee.'^  A  subsequent  indorsee  cannot  sue  on  the 
indorsement,  unless  such  an  agreement  is  expressly  made 
by  the  indorser,  as,  for  example,  when  the  indorsement  is 
made  to  the  order  of  the  indorsee  named.  Such  an  in- 
dorsement makes  the  instrument  negotiable  as  to  the  holder 
and  indorsers,  although  it  is  non-negotiable  as  to  the  pri- 
mary obligor.^ 

§  258.  Indorsements  cannot  be  partial. — If  a  payee 
attempts  to  make  a  partial  indorsement  of  the  instrument, 
it  will  operate  as  a  good  assignment  of  a  part  interest  in 
the  instrument,*  but  it  will  not  g-ive  the  assignee  the  rishts 
and  power  of  an  indorsee.''  But  if  the  indorsement  on  its 
face  is  in  full,  the  collateral  agreement  that  the  indorsee  is 
to  hold  a  part  of  the  amount  in  trust  for  the  indorser  or 


1  Kelsey  v.  McLaughlin,  76  Ind.  379. 

2  Heifer  v.  Aldeu,  3  Minu.  332;  Raasom  v.  Snerwood,  26  Conn.  437; 
Jones  u.  Wood,  3  A.  K.  Marsh.  1G2;  Raymond  v.  Middleton,  29  Pa.  St. 
529.  But  see  Josselyn  v.  Ames,  3  Mass.  274;  Seymour  v.  Van  Slyck,  8 
Wend.  421;  Codwiser.  Gleason,  3  Day,  12. 

*  Caruth  v.  Walker,  8  Wis.  252.  See  as  to  special  contracts  on  the 
liability  of  the  indorser,  Hackney  v.  Jones,  3  Humph.  612;  Whiteman  v. 
Childress,  6  Humph.  302;  Tucker  i;.  English,  2  Spears,  673;  Parker  v. 
Kennedy,  1  Bay,  398;  Pratt  v.  Thomas,  2  Hill  (S.  C),  654;  Kirkpatrick 
V.  McCullough,3  Humph.  171. 

*  Groves  v.  Ruby,  24  Ind.  418;  Hutchinson  v.  Simon,  o7  Miss.  628. 

5  Hawkins  r.  Cardy,  1  Ld.  Rayra.  160;  Hughes  ".  Kiddell,  2  Bay,  324; 
Lindsay  v.  Price,  33  Tex.  282;  Planters'  Bank  v.  Evans,  35  Tex.  592; 
Frank  v.  Kingler,  30  Tex.  305 

428 


CH.  XIII.]  TRANSFER    BY    INDORSEMENT.  §    259 

some  other  person,  will  not  affect  the  character  of  the  in- 
dorsement.^  And  it  will  also  be  a  good  indorsement  if  a 
part  of  the  face  value  is  given  to  one  person,  and  the  resi- 
due to  another  person.  There  may  be  two  or  more  joint 
indorsees,  but  they  must  all  join  in  any  action  on  the 
paper.^ 

§  259.  The  liability  of  an  indorser.  —  The  indorser, 
like  the  assignor  of  negotiable  paper,  payable  to  bearer, 
warrants  by  implication  that  the  paper  is  a  valid  obligation 
in  every  particular  :  in  the  first  place,  that  all  the  parties 
were  competent  to  contract.  If  the  maker,  drawer,  ac- 
ceptor, or  indorser  is  laboring  under  some  legal  disability, 
the  paper  is  invalid  so  far  as  his  liability  is  concerned,  and 
the  subsequent  indorser  is  responsible  for  the  loss  thus 
occasioned.^ 

1  Reed  v.  Furnival,  16  C.  &  M.  588 ;  5  C.  &  P.  (24  E.  C.  L,  R.)  499. 

2  Flint  V.  Flint,  6  Allen,  36,  Dewey,  J.,  saying:  "This  action  was 
properly  instituted  in  the  names  of  the  present  plaintifEs,  the  indorsement 
of  the  entire  note  beincr  made  to  the  indorsees,  and  the  claim,  as  respects 
the  maker,  not  being  divisible  into  two  separate  causes  of  action.  The 
delivery  to  one  of  the  indorsees,  and  a  suit  instituted  and  carried  on  for 
the  benefit  of  both,  with  their  concurrence,  show  a  sufficient  acceptance 
of  the  transfer  to  them."  In  this  case  the  indorsement  was  "Pay  one- 
half  of  the  VFithin  note  to  S.  F.,  and  the  other  half  to  E.  B."  See  also 
to  same  effect,  Conover  v.  Earl,  26  Iowa,  167. 

3  Haly  V.  Lane,  2  Atk.  181;  Lambert  v,  Oakes,  1  Ld,  Raym.  443;  12 
Mod.  244;  Bowman  ».  Ililler,  130  Mass.  153;  Lambert  u.  Pack,  1  Salk. 
127;  Critchlow  v.  Parry,  2  Camp.  182;  Kenworthy  v.  Sawyer,  125  Mass. 
28;  Archer  v.  Shea,  21  N.  Y.  S.  C.  (14  Hun)  493;  Erwin  v.  Downs,  15  N. 
Y.  575;  Burrill  v.  Smith,  7  Pick.  291 ;  Prescott-Bank  v.  Caverly,  7  Gray, 
217;  Butler  v.  Slocomb,  33  La.  Ann.  170;  Robertson  v.  Allen,  59  Tenn. 
233.  It  has  been  questioned  whether  the  indorser  warrants  the  capacity 
of  all  the  antecedent  parties;  Chitty  on  Bills,  [*243]  277;  East  India  Co. 
V.  Tritton,  3  B.  &  C.  280;  Smith  v.  Mercer,  6  Taunt.  83,  dissenting  opin- 
ion of  Chambre,  J. ;  but  the  weight  of  authority  is  to  the  effect  that  the 
warranty  extends  to  all  the  antecedent  parties  to  the  instrument,  1  Par- 
sons' N.  &  B.  25,  588;  Story  on  Notes,  §  380;  Story  on  Bills,  §  110;  Dal- 
rymple  v.  Hillenbrand,  9  N.  Y.  S.  C.  (2  Hun)  488,  affirmed  in  62  N.  Y.  5;, 
Turner  v.  Heller,  66  N.  Y,  66;  Harris  v.  Bradley,  7  Yerg.  310. 

429 


§    259  TRANSFER    BY    INDORSEMENT.  [CH.  XIII. 

The  iudorser  also  warrants  the  genuineness  of  all  tbe  sig- 
natures to  the  paper. ^  It  has  also  been  doubted  whether 
the  iudorser  warrants  the  genuineness  of  the  prior  in- 
dorsements.'^ But  this  is  not  the  conclusion  of  the  authori- 
ties. Inasmuch  as  the  indorser  also  warrants  that  he  has  a 
perfect  title  to  the  paper  by  indorsement,  and  is  liable  if 
his  title  proves  defective;^  and  since  no  title  passes  on  a 
forged  indorsement,*  it  follows  as  a  necessary  consequence 
that  the  indorser  must  warrant  the  genuineness  of  the  prior 
indorsements.^ 

The  indorser  also  warrants  that  the  paper  is  not  invalid, 
because  its  execution  violates  some    law  of  the  land,  for 


1  Mcintosh  V.  Haydou,  R.  &  M.  362;  Critclilow  v.  Parry,  2  Camp. 
182;  Mosher  v.  Carpenter,  13  Huii,  602;  HoTve  r.  Merrill,  5  Cush.  83; 
Hannura  v.  Richardson,  48  Vt.  508;  Heylyn  u.  Adarason,  2  Burr.  669; 
Moslier  v.  Carpenter,  20  N.  Y.  S.  C.  (13  Hun)  604;  MacGjegor  v.  Rhodes, 
25  L.  J.  Q.  B.  318;  Harris  v.  Bradley,  7  Yerg.  310;  Murray  v.  Judah,  16 
Cow.  484;  Terry  r.Bissell,  26  Conn.  23;  Aldrich  v.  Jackson,  5  R.  I.  218; 
Coggill  V.  Am.  Exch.  Bank,  1  Comst.  113;  Turnbull  v.  Bowyer,  40  N.  Y. 
456;  Ollivier  v.  Audray,  7  L,a,.  496;  Chapman  v.  Rose,  56  N.  Y.  137;  Con- 
don V,  Pearce,  43  Md.  83;  Strange  v.  Elleson,  2  Bailey,  385.  But,  of 
course,  the  indorsee  can  not  hold  the  indorser  liable,  if  the  former  pi-o- 
cui'ed  an  indorsement  of  a  forged  paper  to  himself  with  knowledge  of 
tlie  forgery.  Turner  w.  Keller,  66  N.  Y.  66;  Mosher  v.  Carpenter,  20  N. 
Y.  S.  C.  (13  Hun)  604. 

2  Bay  ley  on  Bills,  170,  citing  East  India  Co.  v.  Tritton,  3  B.  &  C.  280. 

3  Williams  v.  Tishomingo  Sav.  Inst.,  57  Miss.  633;  Heylyn  v.  Adam- 
son,  2  Burr.  669;  Cochran  v.  Atchison,  27  Kan.  (1882),  728;  Ballingalls 
V.  Gloster,  3  East,  483;  State  Bank  v.  Fearing,  15  Pick.  533;  Dalrymple  i\ 
Hillenbrand,  2  Hun,  48;  s.  c.  60  N.  Y.  5;  White  v.  Continental  Nat. 
Bank,  64  N.  Y.  320;  Fish  v.  First  National  Bank,  42  Mich.  203;  Ogden 
V.  Saunders,  12  Wheat.  313;  Redingtou  v.  Wood,  45  Cal.  406;  Bruce  v. 
Bruce,  1  Marsh.  165;  s.  c.  5  Taunt.  485;  Mills  v.  Barney,  22  Cal.  240. 

*  Graves  v.  Am.  Exch.  Bank,  17  N.  Y.  205;  Colson  v.  Arnot,  57  N.  Y. 
253. 

5  Fish  V.  First  Nat.  Bank,  42  Mich.  204;  Chambers  ».  Union  Nat. 
Bank,  78  Pa.  St.  205;  Cochran  v.  Atchison,  27  Kan.  (1882),  728;  Canal 
Bank  v.  Bank  of  Albany,  1  Hill  287;  Williams  v.  Tishomingo  Sav.  Inst., 
57  Miss.  633;  Star  F.  Ins.  Co.  v.  N.  H.  Bank,  60  N.  H.  (1884)  442;  Dal- 
rymple v.  Hillenbrand,  62  N.  Y.  5. 
430 


CH.  XIII.]  TRANSFER    BY    INDORSEMENT.  §    259 

.example,  the  law  against  usury  or  against  gambling.^ 
If  the  paper  is  void  because  illegal,  the  indorser  is  liable  to 
the  innocent  indorsee  for  value.  But  if  the  indorsee 
participates  in  any  way  in  the  illegal  transaction  by  which 
the  paper  is  made  illegal,  he  cannot  hold  the  indorser.^ 
The  indorsee,  in  such  a  case,  may  either  sue  the  indorser 
upon  the  paper  itself,  or  upon  a  count  for  money  had  and 
received.^ 

Finally,  —  and  in  this  the  indorser's  liability  differs  from 
that  of  the  assignor  of  negotiable  paper,  payable  to  bearer,  — 
the  indorser  guarantees  that  the  paper  will  be  honored  by 
the  original  parties  at  maturity  and  if  it  be  a  bill,  it  will 
be  accepted  when  it  is  presented.  If  it  should  be  dishonored 
by  the  original  parties,  the  holder  may  proceed  at  once  against 
the  indorsers,  after  giving  them  the  required  notice  of  non- 
acceptance  or  of  non-payment.*  The  indorser  cannot  be 
held  liable  on  the  implied  warranty  as  to  acceptance  and 
payment  of  the  instrument,  unless  a  demand  is  proved,  and 
the  proper  notice  is  given.  But  the  indorsee  need  not 
make  any  demand,  in  ordei"  to  hold  the  indorsers  liable  on 
any  of  the  other    implied  warranties.     He  may  bring  suit 

1  Bowyer  v.  Bampton,  2  Strange,  1155;  Edwards  v.  Dick,  4  Barn.  & 
Aid.  212;  Railroad  Co.  v.  Scliulte,  103  U.  S.  145;  linger  v.  Boas,  1  Harris, 
601;  Tompkins  v.  Little  Rock  Ry.  Co.,  15  Fed.  Rep.  6;  Morford  w. 
Davis,  28  N.  Y.  484;  Burrill  v.  Smith,  7  Pick.  291;  Frank  v.  Longstreet, 
44  G;i.  185;  HoTrell  v.  Wilson,  2  Blackf.  418;  Henderson  v.  Fox,  5  lud. 
489;  Fish  v.  First,  Nat.  Bank,  42  Mich.  404;  Moffett  v.  Bickel,  21  Gratt. 
283;  Lyons  v  Miller,  69  Gratt.  427;  Brown  v.  Wilcox,  7  Iowa,  414;  Wil- 
son V.  Binford,  81  Ind.  588;  Huston  v.  First  Nat.  Bk.,  85  Ind.  21 ;  Gra- 
ham V.  Maguire,  39  Ga.  531.  Succession  of  Weil,  24  La.  Anu:  193;  Haz- 
zard  V.  Citizens'  Bank,  72  Ind.  130;  National  Bank  of  Pittsburg  v. 
Wheeler,  60  N.  Y.  612;  Stewart  v.  Bramhall,  74  N.  Y.  85;  Rosa  v.  Butter- 
field,  33  N.  Y.  664. 

-  Ackland  v.  Pearce,  2  Camp.  599;  Edwards  v.  Dick.,  4  B.  &  Aid.  212; 
Turner  r.  Keller,  66  N.  Y.  66. 

'  Cundy  v.  Marriott,  1  B.  &  A.  696;   Ingalls  v.  Lee,  9  Barb.  947. 

*  Balliugalls  v.  Gloster,  3  East,  481 ;  4  Esp.  268;  Smith  v.  Johnson,  27 
L.  J.  Ex.  363;  3  H.  &  N.  222;  Ogden  v.  Saunders,  12  Wlieat.  313. 

431 


§    260  TRANSFER    BY    INDORSEMENT.  [CH.  XIII. 

against  the  indorsers  immediately  after  discovery  of  the 
breach  of  the  warranties.^  It  lias,  however,  been  held  that 
there  must  always  be  a  demand  and  notice,  in  order  to 
hold  an  accommodation  indorser.^ 

§  260,  Liability  of  indorser  "without  recourse" — 
Qualified  indorsements.  —  When  an  indorsement  is  made 
"  without  recourse,"  the  indorser  relieves  himself  of  all 
liability  for  the  dishonor  of  the  paper. ^  But,  whatever 
popular  impression  it  may  produce,  such  an  indorsement  is 
not  recognized  in  law  as  having  cast  any  suspicion  upon  the 
character  of  the  paper,  or  the  financial  responsibility  of  the 
parties  to  it.* 

The  words  "  without  recourse  "  are  usually  employed  to 
qualify  the  liability  of  the  indorser ;  but  it  is  not  necessary 
to  use  those  particular  words.  Other  words,  which  clearly 
indicate  the  intention  to  create  the  qualification,  such  as  "at 
the  indorsee's  own  risk,"  would  suffice.  Even  words  of  less 
significance  have  been  held  sufficient  to  qualify  the  indorse- 
ment.^ 


1  Copp  V.  M'Dugall,  9  Mass.  1;  Cochran  v.  Atchison,  27  Kau.  728; 
Lake  v.  Haynes,  1  Atk.  281;  Ballingalls  v.  Gloster,  3  East,  483;  Heylin  v. 
Adamsou,  2  Burr.  669. 

2  Susquehanna  Valley  Bank  v.  Loomis,  85  N.  Y.  207. 

3  Welch  V.  Linds,  1  Crauch  159;  Wilson  v.  Codman's  Exrs.,  3  Cranch, 
192;  Rice  v.  Stearns,  3  Mass.  225;  Upham  v.  Prince,  12  Mass.  13;  Rich- 
ardson V.  Lincoln,  5  Met.  201;  Fitchburg  Bank  v.  Greenwood,  2  Allen, 
434;  Mott  v.  Hicks,  1  Cow.  512;  Craft  u.  Fleming,  56  Pa.  St.  140;  Borden 
V.  Clark,  26  Mich.  410;  Davenport  v.  Schram,  9  Wis.  119;  Cadyv.  Shep- 
ard,  12  Wis.  639;  Lyon  v.  Ewing,  17  Wis.  61 ;  Lawrence  v.  Dobyn,  30  Mo. 
196. 

^  Lomax  v.  Picot,  2  Rand.  260;  Stevenson  v.  O'Neil,  71  El.  314;  Kelley 
V.  Whitney,  45  Wis.  117. 

5  The  following  indorsement  was  held  to  be  qualified:  "  I  transfer  all 
my  right  and  title  to  the  within  note,  to  be  enjoyed  in  the  same  manner  as 
may  have  been  by  me."  Ilalley  i'.  Talconer,  32  Ala.  536.  See  Aniba  v. 
Yeomans,  39  Mich.  171 ;  Sears  v.  Lantz,  47  Iowa,  658.  But  in  New  York, 
where  the  firm   of  Brauder  &  Hubbard  was  dissolved,  and  a  new  firm  by 

432 


CH.  XIII.]  TRANSFER    BY    INDORSEMENT.  §    261 

Contrary  to  a  more  or  less  popular  notion,  the  indorser 
"without  recourse"  is  liable,  (1)  if  any  one  or  more  of 
the  signatures  are  not  genuine;  ^  (2)  if  any  of  the  parties 
are  incompetent  to  make  contracts  ;  (3)  if  the  indorser  has 
a  defective  title;  ^  (4)  or  if  the  paper  is  invalid,  because  of 
the  want  or  illegality  of  the  consideration  ^  or  for  any  cause, 
such  as  fraud  ^  or  that  the  note  or  bill  has  been  already 
paid.^  This  liability  seems  to  attach  to  the  indorser  "  with- 
out recourse,"  even  though  the  indorsement  is  made  after 
maturity.^ 

§  261.  Successive  indorsements  —  When  liable  to  each 
other  for  contribution, —  Indorsers  guarantee  the  payment 
of  the  instrument  to  all  subsequent  indorsees,  and  therefore 
they  are  liable  in  case  of  non-payment  in  the  order  in  which 
their  indorsements  were  made,  each  indorser  being  liable 
for  the  whole  amount  of  the  bill  or  note  to  every  subsequent 
indorser  and  indorsee,  but  not  to  the  prior  indorsers.     This 

the  same  name  was  formed  by  Hubbard  with  others,  and  some  paper  of 
the  old  firm  was  transferred  by  Hubbard,  indorsed  "  Brander  &  Hubbard, 
old  firm  in  liquidation,"  it  was  held  not  to  constitute  a  qualified  indorse- 
ment, and  that  the  indorsee  was  liable  on  the  indorsement  as  a  guarantor 
of  payment.     Fassin  v.  Hubbard,  55  N.  Y.  470. 

1  Dumout  V.  Williamson,  18  Ohio  St.  515. 

2  Challis  V.  McCrum,  22  Kan.  157. 

3  Blethiug  V.  Lovering,  58  Me.  437;  Hannum  v.  Richardson,  48  Vt. 
608;  Challis  i\  McCrura,  22  Kan.  157.  See  contra,  Rayne  v.  Dills,  27  La. 
Ann.  622. 

*  "Watson  V.  Cheshire,  18  Iowa,  202. 

«  Ticonic  Bank  v.  Smiley,  27  Me.  225.  In  Mays  v.  Callison,  6  Leigh, 
230,  where  the  instrument  was  a  bond,  Carr,J.,  said:  "The  very  posses- 
sion of  the  bond,  the  claiming  it  as  property,  as  something  binding  the 
obligors,  precluded  the  idea  that  it  was  at  that  moment  discharged  or 
satisfied;  for  then  it  was  no  bond;  it  bound  nobody,  it  was  not  the  repre- 
sentative of  money.  The  bond,  too,  was  payable  at  a  future  date;  who 
could  have  dreamed  that  it  was  already  mere  wax  and  paper  —  not  a  cent 
due  on  it?" 

6  Ticonic  Back  v.  Smiley,  27  Me.  225.  But  see  Ober  v.  Goodrich,  27 
Gratt.  878. 

28  433 


§     2G1  TRANSFER    BY    INDORSEMENT.  [CII.   XIII. 

is  the  general  rule,  and  their  indorsements  are  presumed  to 
come  in  the  order  in  which  they  appear  on  the  instrument. 
But,  as  between  themselves  and  subsequent  indorsees  having 
notice,  the  order  may  be  changed  by  special  agreements,  so 
that  an  indorsement  may  be  treated  as  prior,  although  it 
appears  to  be  subsequent.^  There  is  no  liability  for  con- 
tribution among  successive  indorsers,  as  a  general  rule, 
even  when  there  are  accommodation  indorsers,  unless  it  is 
provided  for  by  special  agreement. ^  But  if  the  second  of 
two  accommodation  indorsers  is  provided  by  the  maker  or 
acceptor  with  the  means  to  make  payment,  the  prior  in- 
dorser  may  sue  this  subsequent  indorser  to  compel  him  to 
appropriate  the  money  thus  received  to  the  payment  of  the 
paper. -^ 

If  two  indorsers  appear  on  the  face  of  the  paper  to 
have  been  joint  pa^^ees  or  indorsees,  their  indorsements 
must  be  treated  as  joint,  although  apparently  successive.* 

1  Slack  v.  Kirk,  67  Pa.  St.  380;  Chalmers  v.  McMurdo,  5  Munf.  252; 
Slagle  V.  Rust,  4  Gratt.  274;  Cahal  v.  Frierson,  3  Humph.  411;  Brockway 
?;.  Coraparree,  11  Humph.  355;  Caddy  v.  Sheppard,  12  Wis.  (339;  Syme  v. 
Browne,  19  La.  Aun.  147;  Bradford  v.  Cory,  5  Barb.  461 ;  Hale  v.  Danforth, 
46  Wis.  554;  Price  v.  Lavender,  38  La.  Ann.  389;  Freeman  v.  Ellison,  37 
Mich.  459;  Givens  v.  Merchants'  Nat.  Bank,  85  111.  442;  Hacket  v.  Len- 
ares,  16  La.  Ann.  204;  Pomeroy  v.  Clark,  1  MacArth.  606;  Bogue  v.  Melick, 
25  111.  91. 

2  Phillips  V.  Preston,  5  How.  278;  McCarty  v.  Roots,  21  How.  432; 
Rey  V.  Simpson,  22  How.  350;  McDonald  v.  Magi-uder,  3  Pet.  470;  Shaw 
V.  Knox,  98  Mass.  214;  Clapp  v.  Rice,  13  Gray,  403;  Sweet  v.  McAlister, 
4  Allen,  355;  Weston  v.  Chamberlain,  7  Cush.  404;  Woodward  v.  Sever- 
ance, 7  Allen,  340;  Smith  v.  Merrill,  54  Me.  48;  Coolidge  v.  Wiggiu,  62 
Me.  568;  Kirkner  v.  Conklin,  40  Conn.  81;  Easterly  v.  Barber,  66  N.  Y. 
433;  Moody  v.  Fiudley,  43  Ala.  167;  Ross  v.  Espy,  66  Pa.  St.  481;  Gore 
V.  Wilson,  40  Ind.  206;  Davis  v.  Morgan,  64  N.  C.  576;  Syme  v.  Brown, 
19  La,  Ann.  147;  Givens  t;.  Merchants'  Nat.  Bank,  85  111.  443;  Hale  v. 
Danforth,  46  Wis.  555;  Druhe  v.  Cliristy,  10  Mo.  App.  666;  Hogue  v. 
Davis,  9  Gratt.  4;  Bank  of  U.  S.  v.  Beime,  1  Gratt.  265;  Chalmers  v.  Mc- 
Murdo, 5  Munf.  552;  Farmers'  Bank  v.  Vanmeter,  4  Rand.  553. 

3  Price  V.  Truesdell,  28  N.  J.  Eq.  20. 

*  Lane  v.  Stacey,  8  Allen,  41.     See  Culver  v.  Leavy,  19  La.  Ann.  202. 
434 


CII.   XIII.]  TRANSFER    BY    INDORSEMENT.  §    2G1 

But  the  presumption  is  rather  against  a  joint  indorsement, 
where  the  two  iudorsers  do  not  appear  on  the  face  of  the 
paper  to  have  been  joint  payees  or  indorsees.^  Jn  a  late 
case  in  New  Jersey,  it  has  been  held  that  parol  evidence  is 
inadmissible  to  prove  that  an  apparently  successive  indorse- 
ment was  intended  by  the  parties  to  be  a  joint  indorse- 
ment.^  But  this  case  is  not  in  harmony  with  the  general 
trend  of  authority,  which  allows  as  between  the  immediate 
parties  and  others  haying  notice,  every  mistake  made  in 
the  order  of  indorsement  to  be  proved  by  parol  evidence 
and  corrected  in  equity.^ 

AVhere  a  paper  is  indorsed  by  the  payee  and  by  a  third 
person,  the  legal  presumption  is  that  the  payee  is  the  prior 
indorser ;  but  this  presumption  may  be  rebutted  by  proof 
to  the  contrary.*  And  even  between  the  immediate  parties, 
the  accommodation  indorsers  will  be  liable  in  the  order  of 
their  indorsements,  in  the  absence  of  an  agreement  to  the 
contrary.^  Only  an  express  agreement  can  make  them  sus- 
tain to  each  other  the  relation  of  co-sureties.®  The  agree- 
ment may  be  proved  by  parol  evidence,  as  between  the 
immediate  parties,^  but  not    against  a  remote  holder   for 

1  Givens  v.  Merchants'  Nat.  Bank,  85  111.443;  Hale  t?.  Danforth,  46 
Wis.  555. 

2  Johnson  v.  Ramsey,  42  N.  J.  L.  (U  Vroom)  279. 

3  Slack  V.  Kirk,  67  Pa.  St.  380;  Cahal  v.  Frierson,  3  Humph.  411: 
Brockway  v.  Comparree,  11  Humph.  355;  Slaglev,  Rust,  4  Gratt.  274. 

<  Slagle  V.  Rust,  4  Gratt.  274;  Caddy  v.  Sheppard,  12  Wis.  689. 

*  Shaw  V.  Knox,  98  Mass.  214;  Woodward  v.  Severance,  7  Allen,  340; 
Coolidge  V.  Wiggin,  62  Me.  568;  Kirschner  v.  Conklin,  40  Conn.  77;  Bank 
of  United  States  v.  Beirne,  1  Gratt.  239;  Moody  v.  Findley,  43  Ala.  167; 
Druher.  Christy,  10  Mo.  App.  56G. 

«  McCune  v.  Belt,  25  Mo.  174;  Stillwell  v.  How.  46  Mo.  589,  McDon- 
ald ?;.  Magruder,  3  Pet.  470;  McCarty  w.  Roots,  21  How.  437;  Kirschner 
t'.  Conklin,  40  Conn.  81;  Hogue  v.  Davis,  8  Gratt.  4;  Farmers'  Bank  u 
Van  Meter,  4  Rand.  553.  The  burden  of  proof  is  on  the  party  alleging 
the  varying  agreement.  Hogue  v.  Davis,  supra.  And  it  must  be  a  posi- 
tive and  well  established  agreement.     Sweet  v.  McAlister,  4  Allen,  353. 

"  Smith  t'.  Morrill,  54  Me.  48;  Coolidge  v.  Wiggin,  62  Me.  568;  Stur- 

435 


§    262  TRANSFER    BY    INDORSEMENT.  [CH.   XIII. 

value. ^  Where  the  iiidorsers  are  joint  payees,  it  is  pre- 
sumed that  they  are  joint  indorsers.'^ 

§  2G2.   By  wlioiii  the  indorsenient  can  be  made.  —  Any 

person,  who  is  not  laboring  under  some  legal  disability, 
who  is  payae  or  indorsee  of  a  negotiable  bill  or  note,  can 
make  a  legal  indorsement  of  the  instrument.  If  the  payee 
or  indorsee  dies,  the  bill  or  note  passes  to  the  executor  or 
administrator,  and  it  must  be  indorsed  by  the  latter.-^ 
Where  the  payee  or  indorser  becomes  bankrupt,  his  power 
of  indorsement  passes  to  his  assignee  in  bankruptcy  and 
the  latter  is  alone  authorized  to  indorse  the  instruments.* 

If  the  bill  or  note  is  payable  to  an  infant  or  lunatic,  an 
indorsement  by  him  will  pass  a  good  title  to  the  paper,  as 
against  all  the  world  but  himself.  But  he  is  privileged  to 
avoid  the  indorsement,  release  himself  from  liability  and 
recover  the  instrument  too.^ 

According  to  the  common  law,  the  husband,  by  reducing 
his  wife's  choses  in  action  to  possession,  acquires  the  con- 

tevant  v.  Randall,  53  Me.  149;  Calial  v.  Frierson,  3  Humph.  411;  Weston 
V.  Chamberlain,  7  Cush.  404 ;  Easterley  v.  Barber,  66  N.  Y.  433 ;  Hub- 
bard V.  Guernsey,  64  N.  Y.  457;  Denton  v.  Lytle,  4  Bush,  597;  Edelen  v. 
White,  6  Bush,  408;  Phillips  v.  Preston,  5  How.  278.  But  see  Johnson 
V.  Ramsey,  14  Vroom,  279. 

1  Williams  v.  Smith,  48  Me.  135. 

2  Lane  v.  Stacy,  8  Allen,  41 ;  Culver  v.  Leavy,  19  La.  Ann.  202. 

3  Rawlinson  v.  Stone,  3  Wils.  1 ;  Watkins  v.  Maule,  2  Jac.  &  Walk.  237; 
Malbon  v.  Southard,  3G  Me.  147;  Rand  v.  Hubard,  4  Met.  252;  Nelson  v. 
Stallenwerck,  60  Ala.  140;  Shelton  v.  Carpenter,  60  Ala.  211;  Dwight  v. 
Newell,  15  111.  333.  See  ante,  §  148,  for  a  full  discussion  of  the  executor 
a'ud  administrator  as  payee  and  indorser,  and  §  146,  of  trustees  and 
guardians  as  indorser. 

*  Ex  parte  Brown,  1  Glyn  &  J.  407 ;  Ashurst  v.  Bank  of  Australia,  37 
Eng.  L.  &,  Eq.  149.     See  ante,  §  65,  for  a  fuller  discussion. 

5  Jeune??.  Ward,  3  Stark.  320;  Grey  v.  Cooper,  3  Doug.  65;  Taylor  v. 
Croker,  4  Esp.  187;  Hardy  v.  Waters,  38  Me.  450,  Nightingale  ».  With- 
ington,  15  Mass.  272;  Burke  v.  Allen,  29  N.  H.  lOG;  Frasier  v.  Massey,  14 
Ind.  382.  For  a  fuller  discussion  on  the  infant  as  payee  and  indorser, 
see  ante,  §  49,  and  on  the  Lunatic,  see  ante,  §  56. 
436 


CH.  XIII.]  TRANSFER    BY    INDORSEMENT.  §    262 

trol  of  all  of  them,  and  he  alone  can  indorse  the  nesrotiable 
bills  payable  to  her.^  But  the  husband  may  authorize  the 
wife  to  indorse  her  negotiable  paper,  and  her  indorsement, 
with  his  consent,  is  equivalent  to  his  own  indorsement,  and 
passes  a  perfect  title. ^  But  the  common  law  has  been 
greatly  modified  in  respect  to  the  married  woman's  powers 
and  capacities,  by  modern  statutes;  and  in  some  of  the 
States  the  common  law  in  this  connection  has  been  com- 
pletely abrogated,  and  the  married  woman  given  the  same 
power  of  control  over  her  property,  as  the  single  woman  has."^ 
If  the  paper  is  payable  to  a  copartnership,  any  one  of 
the  firm  may  indorse  it  during  the  continuance  of  the  firm. 
But  in  order  to  pass  a  perfect  title,  and  bind  the  firm  as 
indorser,  the  indorsement  must  be  in  the  firm's  name."*  If 
one  partner  dies,  the  survivor  may  indorse  in  his  own 
name,  for  he  becomes  the  administrator  of  the  dissolved 
firm.^  But  when  a  firm  is  dissolved  for  any  other  cause 
than  the  death  of  a  partner,  no  partner  can  indorse  the 
firm's  paper,  not  even  the  partner  who  has  the  power  to 
wind  up  the  affairs  of  the  firm.^ 


1  Conner  v.  Martin,  1  Stra.  516;  Barlow  u.  Bishop,  1  East,  433;  Savage 
V.  King,  5  Sliep.  301;  Mason  v.  Morgan,  2  Ad.  &  El.  (29  E.  C.  L.  R.)  30; 
Miles  V.  Williams,  10  Mod.  243;  Miller  u.Delameter,  12  Wend.  433. 

2  Lindus  v.  Bradwell,  5  Com.  B.  583;  Lord  v.  Hall,  8  C.  B.  627;  Cotes 
i;.  Davis,  1  Camp.  485;  Prestwick  v.  Marshall,  7  Bing.  565;  4  C.  &  P. 
594;  Prince  v.  Brunatter,  7  Bing.  N.  C.  435;  Hancock  Bank  v.  Joy,  41  Me. 
568;  Stevens  V.  Beal,  10  Cush.  291;  Miller  v.  Delaweter,  12  Wend.  433; 
Reakert  v.  Sanford,  5  Watts  &  S.  164;  Leeds  v.  Vail,  15  Pa.  St.  185; 
Fredd  v.  Eves,  4  Han-.  (Del.)  385. 

"  For  a  full  discussion  of  the  married  woman's  disabilities,  and  par- 
ticularly in  respect  to  her  as  payee  and  indorser,  see  ante,  §  63. 

4  Absolemr;.  Marks,  11  Q.  B.  19;  Russell  v.  Swan,  16  Mass.  314;  Esta- 
brook  V.  Smith,  6  Gray,  570;  Moore  v.  Denslow,  14  Conn.  235;  Hooker  v. 
Gallagher,  6  Fla.  351 ;  Fletcher  v.  Dana,  4Blackf.  377;  Desha  v.  Stewart, 
€  Ala.  852.  See  chapter  VL  for  a  discussion  of  powers  of  partners  as 
parties  to  commercial  papers. 

5  Jones  V.  Thorne,  14  Mart.  463. 

6  Abel  V.  Sutton,  3  Esp.  108;  Parker  v.  Macoraber,  18  Pick.   505;   San- 

437 


§    2(J2  TRANSFER    IIY    INDORSEMENT.  [CH.  XITI. 

Where  a  paper  is  payable  to  two  or  more  persons  who 
are  not  partners,  it  must  be  indorsed  by  all,  in  order  that 
the  transfer  may  pass  the  whole  title  and  operate  in  every 
other  way  as  an  indorsement.  The  indorsement  by  one  of 
them  will  transfer  his  equitable  interest,  but  nothing  more ; 
the  indorsee  of  one  of  the  parties  could  not  maintain  an 
action  on  the  paper. ^  But  if  the  instrument  is  expressed 
to  be  payable  to  either  of  the  payees,  the  indorsement  of 
one  of  them  would  be  sufficient.^ 

When  a  corporation  is  the  payee,  of  course  the  indorse- 
ment can  only  be  made  by  some  agent  of  the  corporation. 
In  regard  to  indorsements  by  agents  of  corporations  in 
general,  special  care  must  be  taken,  in  order  to  make  it  the 
indorsement  of  the  corporation,  and  binding  on  it  as  such.^ 
But  cashiers  of  banks  constitute  a  notable  exception  to  this 
rule;  and  custom,  adopted  b3daw,  has  made  any  form  of  an 
indorsement  by  a  cashier  the  indorsement  of  his  bank, 
which  shows  in  any  way  that  he  is  acting  in  his  official  ca- 
pacity.*   The  same'rule  applies  to  all  government  officers. 

ford  V.  Mickles,  4  Johns.  224;  Foltz  v.  Pouree,  2  Desau.  Eq.  40;  Hamp- 
shire z?.  Chastain,  6  Ga.  166.  But  it  has  been  held  that  the  iudorsemeut 
by  the  managing  partner  after  dissolution  will  be  good,  if  the  dissolu- 
tion -were  unknown  to  the  indorsee.  Lewis  v.  Reilly,  1  Q.  B.  349;  Cony. 
V.  Wheelock,  33  Me.  366.  See  ante,  §  108,  for  a  discussion  of  the  power 
to  indorse  the  firm's  notes  and  bills  after  dissolution. 

1  Cavenick  v.  Vickery,  2  Dougl.  652;  Brown  v.  Dickinson,  27  Gratt. 
693;  Sneed  v.  Mitchell,  1  Haywood,  289;  Smith  v.  Whiting,  9  Mass.  334; 
Sayrev.  Frick,  7  Watts  &  S.  383;  Culver  v,  Leavy,  19  La.  Ann,  202; 
Ryhiner  v.  Feickert,  92  111.  311.  See  ccntCf  §  18.  Of  course,  one  may 
be  authorized  by  the  others  to  indorse  for  all,  and  with  that  authority 
the  one  must  sign  all  their  names  to  the  indorsement.  If  a  joint  payee 
assigns  his  interest  to  another  payee,  the  assignment  carries  witli  it  the 
implied  power  to  indorse  the  paper  in  his  name.  Russell  v.  Swan,  10 
Mass.  314;  Goddard  v.  Lyman,  14  Pick.  268. 

2  Watson   V.  Evans,  1  Hurl.  v.  Colt.  662, 

3  See  ante,  §  126. 

■*  Fleckner  r.  Bank  of  U,  S.,  8  Wheat.  3G0;  Minor  v.  Mechanics'  Bank» 
1  Pet.  46,  Wild  v.  Passamaquoddy  Bank,  3  Ma.son,  505;  Fairfield  v.  Adams^ 
16  Pick.  381 ;  Folger  v.  Chase,  1»  Pick,  63;   Bank  of  Manchester  v.  Slasen, 
438 


CH.  XIII.]  TRANSFER   BY   INDORSEMENT,  §    2G4 

Merely  affixing  their  official  designations  to  the  indorsement 
will  make  it  binding  on  the  government,  instead  of  on  them- 
selves as  individuals.^ 

§  263.  To  whom  the  indorsement  may  be  made.  —  The 

indorsement  may  be  made  to  almost  any  one,  and  probably, 
at  common  law,  there  is  but  one  absolute  prohibition,  viz.  : 
the  indorsement  by  a  wife  to  her  husband,  or  by  the  hus- 
band to  his  wife. 2  The  indorsement  may  be  made  to  all 
the  persons  laboring  under  disabilities,  such  as  infants,  luna- 
tics, and  married  women.  But  in  the  case  of  the  married 
women,  the  papers  indorsed  to  them  become  the  property 
of  their  husbands  at  common  law.^ 

Where  the  bill  or  note  is  indorsed  to  an  executor,  admin- 
istrater  or  trustee,  although  he  will  hold  the  proceeds  of 
the  collection  as  a  representative  of  his  beneficiary,  he  will 
take  the  paper  in  his  individual  capacity,  and  in  transfer- 
ring it,  it  is  proper  for  him  to  indorse  it  in  his  own  name.* 
In  any  event,  the  indorsement  is  invalid,  for  any  negotiable 
purpose,  if  the  indorsee  is  dead,  when  the  indorsement  is 
made.  The  personal  representative  could  not  sue  on  such 
a  paper. ° 

§  264.  The  place  for  indorsement  —  Allonge. — As  has 
been  already  explained,  the  word  "indorsement  "  is  derived 

13  Vt.  334;  Porter  v.  Neckervis,  i  Rand.  359;  Bank  of  the  State  v.  Musk 
ingum  Branch  Bank,  29  N.  Y.  619;  McHenry  u.  Ridgely,  3  Scam.  309; 
Collins^.  Johnson,  16  Ga.  458.     See  ante,  §  127. 

1  Dugan  V.  United  States,  3  Wheat.  172.     See  aiite,  §§  137,  139. 

*  Gay  t'.  Kingsley,  11  Allen,  345.  But  such  an  indorsement  maybe 
made  for  the  purpose  of  enabling  the  indorsee  to  act  as  the  agent  of  the 
indorser  in  the  collection  of  the  debt.     Slawson  v.  Loring,  5  Allen,  340. 

3  Richards  v.  Richards,  2  Barn.  &  Ad.  477;  Philliskirk  v.  Pluckwell,  2 
M.  &  Selw.  393;  Burrough  v.  Moss,  10  Barn.  &  C.  558.     See  ante,  §  63. 

*  Evans  v.  Cramlington,  1  Show.  4 ;  2  Show.  509 ;  Richards  v.  Rich- 
ards, 2  Barn.  &  Ad.  447;  Davis  v.  Peck,  54  Barb.  425;  Fletcher  o. 
Schaumberg,  41  Mo.  501.     See  ante,  §§  146,  148. 

*  Valentine  v.  Holloman,  63  N.  C.  475. 

439 


§    2(35  TRANSFER    BY    INDORSEMENT.  [m,  XIII. 

from  the  hatintn  dorsa  ami  means  a  writing  on  (he  back  of 
a  commercial  instrument.  But  in  order  that  a  signature 
and  other  accompanying  writing  may  have  the  full  effect 
of  an  indorsement,  it  is  not  necessary  that  it  be  put  on  the 
back.  It  may  be  written  on  any  part  of  the  instrument, 
and  it  will  be  valid,  although  unusual  and  irregular;  but  in 
consequence  of  the  irregularity  it  must  be  proven  to  be  an 
indorsement,  if  disputed.^ 

But  the  writing  must  appear  on  some  part  of  the  instru- 
ment, in  order  to  have  the  effect  of  an  indorsement. 
Although  there  can  be  a  valid  transfer  of  a  bill  or  note  by 
a  separate  instrument  in  writing,  the  separate  w.riting  will 
not  ofive  to  the  transferee  the  rights  of  an  indorsee  for 
value. ^  If,  however,  in  consequence  of  frequent  and  nu- 
merous negotiations  of  the  instrument,  the  successive  in- 
dorsements have  completely  covered  the  back,  an  extra 
piece  of  paper  may  be  tacked  or  pasted  on  the  instrument, 
and  all  further  indorsements  may  be  written  on  this  attached 
paper.  This  attached  paper  is  called  an  allonge^  and  be- 
comes a  part  of  the  instrument  for  this  purpose.^ 

§  265.  Form  of  the  indorsement. — According  to  the 
character  of  the  indorsement,  it  will  consist  simply  of  the 

1  Armfleld  v.  Allport,  27  L.  J.  Ex.  42;  Young  v.  Glover,  3  Jurist  (n.  s.), 
637;  Rex  v.  Begg,  3  P.  Wms.  419;  1  Stra.  18;  Partridge  v.  Davis,  20  Vt. 
449;  Haines  V.  Dubois,  30  N.  J.  259;  Quiu  «.  Sterne,  26  Ga.  223;  Her- 
ring V.  WoodhuU,  29  111.  92;  Arnot  v.  Syinouds,  85  Pa.  St.  99.  See 
Marion  Gravel  Road  Co.  v.  Kessiugcr,  66  Ind.  553 ;  2  Parsons'  N.  &  B. 

18. 

2  Fenn  v.  Harrison,  3  T.  R.  757.  But  a  promise  to  indorse  can  be  en- 
forced against  the  promisor,  if  it  is  supported  by  a  valid  consideration. 
Moxon  V.  Pulling,  4  Camp.  51 ;  Wilmington  Bank  v.  Houston,  1  Harr. 
227;  French  v.  Turner,  15  Ind.  59. 

3  Folgerr.  Chase,  18  Pick.  63;  French  v.  Turner,  15  Ind.  59;  Crosby 
V.  Roub,  16  Wis.  622,  626;  Young  u.  Glover,  3  .Jurist  (n.  s.),  637;  Byles 
on  Bills,  [*145]  263;  Edwards  on  Bills,  2G7;  Story  on  Notes,  §§  121, 151, 
172;   Story  on  Bills,  §§  204,  218. 

440 


CH.  Xiri.]  TRANSFER    BY    INDORSEMENT.  §    265 

payee  or  last  indorsee's  signature,  or  of  the  signature,  ac- 
companied by  words  which  express  the  intention  to  trans- 
fer the  paper. 

The  full  name  should  be  given  in  the  signature,  and  it  is 
usual  to  do  so,  but  the  initials  will  answer.'^  Indeed  any 
mark,  which  was  intended  by  the  parties  to  be  a  signing, 
will  be  sufficient  in  law.  It  was  held  in  one  case  that  the 
figures  "1,  2,  8,"  placed  on  the  back  of  a  commercial  in- 
strument with  intention  to  indorse  it,  will  bind  the  party 
writing  them  as  an  indorser.^ 

The  writing  may  be  made  with  a  pen  and  ink  or  with  a 
pencil.^ 

If  the  indorsement  does  not  consist  simply  of  the  signa- 
ture, it  is  usually  accompanied  by  the  words  "  pay  to  A.  or 
order,"  [or  bearer]  or  "  pay  to  the  order  of  A."  But  it 
is  not  necessary  to  adopt  this  formula,  although  it  is 
usual  and. customary.  Other  forms  of  expression,  indi- 
cating the  intention  to  transfer  the  paper,  and  containing 
no  language  having  the  effect  of  limiting  the  liability  of 
the  tranferrer,  have  been  held  sufficient  to  bind  the  trans- 
ferrer as  aa  indorser.  The  words  "assign"  and  "sell 
and  assign,"  have  been  accepted  as  sufficient  to  constitute 
an  indorsement.*  And  in  England  the  most  redundant  and 
verbose  sort  of  an  assignment,  written  on  the  back  of  the 
paper,  has  been  held  to  have  the  effect  of  an  ordinary  in- 
dorsement.^ 

1  Williamson  v.  Johnson,  1  B.  &  C.  146;  Merchants'  Bank  v.  Spicer,  6 
Wend.  4i3;  Palmer  v.  Stephens,  1  Denio,  471;  Rogers  v.  Colt,  6  Hill, 
322;  Bank  v.  Flanders,  6  N.  H.  239;  Corgau  v.  Frew,  39  111   31. 

*  Brown  v.  Butcher's  Bank,  6  Hill,  443.  See  also  to  the  same  effect, 
Addy  V.  Grus,  8  Ves.  504;  George  v.  Surrey,  I  M.  &  M.  516;  Baker  v. 
Denning,  8  Ad.  &  El.  94 ;  Flint  v.  Flint,  6  Allen,  34. 

3  Geary  v.  Physic,  5  Barn.  &  C.  234;  Closson  v.  Steams,  4  Vt.  11; 
Brown  v.  Butchers'  Bank,  6  Hill,  443. 

*  Sears  v.  Lantz,  47  Iowa,  658;  Sands  v.  Wood,  21  Iowa,  263;  Duffy 
V.  O'Connor,  7  Baxt.  498;  Shelby  v.  Judd,  24  Kan.  166. 

*  The  indorsement  in  that  case  was  as  follows:  "  I  hereby  assign  this 

441 


§    265  TRANSFER    BY    INDORSEMENT.  [CH.  XIII. 

But  in  Michigan,  in  a  case  where  the  payee  wrote  on  the 
back  of  a  note,  "  I  hereby  transfer  my  right,  title  and  in- 
terest of  the  written  note  to  S.  A.  Yeomans,"  is  was  held 
to  be  a  good  transfer  of  the  payee's  rights  in  and  to  the 
note,  but  it  was  not  an  indorsement.^  The  declaration  that 
the  payee  assigns  or  transfers  all  his  right,  title  and  interest 
in  the  paper,  would  seem  to  limit  in  a  most  effective  way 
the  rights  acquired  by  the  transferee  to  those  which  the 
transferrer  had  therein,  and  thus  prevent  the  writing  from 
operating  as  an  indorsement.  But  there  are  authorities 
which  oppose  this  view,  and  hold  that  nothing  but  an  ex- 
press limitation   of  the  rights  of  the  transferee  to  those 

draft  and  all  benefit  of  the  money  secured  thereby  to  John  Grainger  of 
Bessilsleigh,  in  the  County  of  Berks,  labourer;  and  order  the  Tv^thin 
named  Thomas  Fox  Hitchcock  to  pay  him  the  amount  and  all  interest  in 
respect  thereof."  Guruey,  B.,  said :  "  It  amounts  to  nothing  more  than 
an  ordinary  indorsement  of  the  note,  but  it  is  in  a  very  elaborate  form." 
Richards  v.  Fraukura,  9  Car.  &  P.  (38  E.  C.  L.  R.)  221. 

1  Anibau.  Yeomans,  39  Mich.  171,  Marston,  J.,  saying:  "The  indorse- 
ment upon  a  negotiable  promissory  note  is  something  more  than  the  mere 
transfer  of  the  interest  of  the  payee  therein.  It  includes  also  the  per- 
sonal undertaking  of  the  indorser  that  if  the  note  is  not  paid  at  maturity, 
upon  notice  of  that  fact  he  will  pay  the  same.  Indeed  it  goes  fartlier 
and  may  pass  a  perfect  title  to  the  Indorsee,  and  enable  him  to  recover 
from  the  makers,  In  cases  where  the  payee  could  not  have  recovered. 
The  right  or  interest  passing  therefore  under  the  usual  and  customary 
indorsement  is  much  greater  than  the  mere  right,  title  and  interest  of 
the  payee,  and  where  the  transfer  as  made  only  attempts  to  pass  the  title 
and  interest  of  the  payee  of  the  note,  no  greater  right  or  interest  than  he 
then  held  can  pass.  The  transfer  in  this  case  gave  Yeomans  the  same 
rights  that  Aniba  then  had,  but  none  other  or  greater.  Yeomans  could  look 
to  the  makers  thereof  as  Aniba  could  have  done,  but  beyond  this  he  could 
not  go.  To  permit  him  to  fall  back  upon  Aniba,  or  to  collect  from  the 
makers  in  case  Aniba  could  not  have  collected,  would  be  giving  him  more 
than  Aniba' s  right  and  interest  in  the  note.  Such  a  transfer  as  was  made 
in  this  case,  it  not  being  in  accordance  with  the  usual  and  customary 
method  of  transferring  commercial  paper,  would  throw  doubt  and  sus- 
picion upon  the  entire  transaction  and  destroy  tlie  negotiable  character 
of  the  paper.  No  one  dealing  in  commercial  paper  would  be  willing  to 
accept  it  afterward  with  such  an  indorsement  standing  thereon." 
442 


CH.  XIII.]  TRANSFER   BY   INDORSEMENT.  §    266 

possessed  by  the  transferrer  can  take  away  from  the  writ- 
ing the  character  of  an  indorsement.^ 

§  266.  Indorsements  in  full,  and  in  blank.  —  When 
an  instrument  is  made  payable  by  indorsement  to  a  par- 
ticular person  or  to  his  order,  it  is  called  an  indorsement 
in  full,  and  no  one  can  demand  payment  but  the  person 
whose  name  appears  in  the  indorsement,  unless  he  also  in- 
dorses it  in  full  or  in  blank. ^  The  negotiability  of  a  paper, 
payable  to  A.  or  order,  is  not  affected  by  an  indorsement  to 
B.,  without  words  of  negotiability.  B.  may  nevertheless 
transfer  it  by  indorsement.^ 

Where  the  payee  or  indorsee  merely  writes  his  own  name 
on  the  back  of  the  instrument,  it  is  called  an  indorsement 
in  blank;  and  as  long  as  it  remains  a  blank  indorsement, 
the  instrument  is  transferable  by  delivery,  and  payable  to 
bearer.*  But  the  bona  fide  holder  of  an  instrument  in- 
dorsed in  blank  can  by  filling  up  the  blank  indorsement 
with  a  direction  to  pay  to  his  own,  or  another's  order, 
make  it  an  indorsement  in  full.^  But  the  holder  cannot  en- 
large the  liability  of  the  indorser  in  blank,  by  writing  over 

*  1  Daniel's  Negot.  Inst.,  §  688c;  Sears  v.  Lantz,  47  Iowa,  658.  See 
Adams  v.  Blethea,  66  Me.  19. 

2  Lawrence  v.  Fassell,  77  Pa.  St.  460;  Reamer  v.  Bell,  79  Pa.  St.  292; 
and  no  one  else  can  Indorse  the  paper,  Mead  v.  Young,  4  T.  R.  28. 

3  Potter  V.  Tyler,  2  Met.  58;  Leavitt  v.  Putnam,  3  Comst.  494;  Moore 
V.  Manning,  1  Comyns,  311 ;  Blackman  v.  Green,  24  Vt.  18;  Lea  v.  Branch 
Bank,  8  Port.  (Ala.)  119;  Scull  v.  Edwards,  8  Eng.  (Ark.)  24;  Muldrow 
V.  Caldwell,  7  Mo.  563. 

^  See  Peacock  v.  Rhodes,  2  Doug.  633;  Gaar  v,  Louisville  B.  Co.,  11 
Bush,  180;  Palmer  v.  Nassau  Bank,  78  111.  380;  Morris  v.  Preston,  93  111. 
215;  Carters,  Sprague,  51  Cal.  239, 

*  Evans  v.  Gee,  II  Pet.  80;  Tenney  v.  Prince,  4  Pick.  385;  Central 
Bank  v.  Davis,  19  Pick.  376;  Riker  v.  Cosby,  2  Penn.  911;  Condon  u. 
Pearce,  43  Md.  83;  Rees  v.  Conococheague  Bank,  5  Rand.  329;  Johnson 
W.Mitchell,  50  Tex.  212;  Andrews  v.  Sirams,  33  Ark.  771;  Hunter  v. 
Hempstead,  1  Mo.  67;  Hance  v.  Miller,  21  111.  636. 

443 


§    2(]Q  TRANSFER    BY    INDORSEMENT.  [CH.   XIII. 

his  signature  a  waiver  of  demand  and  notice,  or  of  any 
other  right. ^ 

Where  there  are  several  successive  indorsements  in 
bhmk,  the  holder  may  fill  up  any  one  of  them  with  an  order 
for  payment  to  himself,  and  thus  claim  title  through  that 
particular  indorsement.  Or  he  may  fill  them  all  up,  show- 
ing regular  indorsements  in  full  from  the  payee  to  himself.^ 
And  where  the  holder  fills  up  only  one  of  the  blank  in- 
dorsements, he  may  release  the  other  indorsers  in  blank  by 
striking  out  their  indorsements.^  But  the  subsequent  in- 
dorsers in  blank  are  not  discharged  from  liability  merely 
because  the  holder  fills  up  an  earlier  blank  indorsement. 
The  holder  may  still  sue  them  as  indorsers,  notwithstand- 
ing he  claims  title  through  a  prior  indorser.^  But  it  is 
possible,  then,  that  these  subsequent  indorsements  will  fall 
under  the  head  of  irregular  indorsements.^ 

In  filling  up  a  blank  indorsement,  the  holder  cannot  in- 
crease the  burden  of  the  parties  liable  on  the  instrument,  by 
making  it  payable  in  part  to  one  person,  and  in  part  to 
another.^ 

If  a  bill  be  once  indorsed  in  blank,  subsequent  indorse- 
ments in  full  will  not  prevent  the  bill  or  note  from  being 
payable  to  bearer,  as  long  as  the  blank  indorsement  is  not 

'  2  Parsons'  N.  &  B.  20;  Central  Bank  t?.  Davis,  19  Pick.  376;  Edwards 
on  Bills,  273;   1  Daniel's  Negot.  Inst.,  §  694. 

2  Emerson  v.  Cutts,  12  Mass.  7,  8;  Cole  v.  Cushiug,  8  Pick.  48;  Ells- 
worth V.  Brewer,  11  Pick.  316;  Craig  v.  Brown,  Pet.  C.  C.  171;  Ritcliie 
V.  Moore,  5  Mnnf.  388. 

3  Ritchie  v.  Munford,  5  Munford,  388.  But  if  the  holder  strikes  out 
an  intermediate  indorsement  in  blank,  he  releases  all  the  subsequent 
indorsers,  as  lie  has  deprived  them  of  their  recourse  against  the  iodorser, 
whose  indorsement  has  been  stricken  out.  Curry  v.  Bank  of  Mobile,  8 
Port.  (Ala.)  360. 

*  Cole  V.  Cushiug,  8  Pick.  48;  Bank  of  British  N.  A.  v.  Ellis,  9  Fed. 
Rep.  46.     See  2  Parsons'  N.  &  B.  19,  note. 
5  See  post,  §§  270,  271. 

«  Erwin  v.  Lynn,  16  Oliio  St.  547.     See  ante,  §  258. 
444 


CH.  XIII.]  TRANSFER    BY    INDORSEMENT.  §    267 

filled  up ;  at  least  as  against  the  original  parties  to  the  in- 
strument, and  indorsers  prior  to  the  blank  indorsement. 
But  as  against  the  subsequent  special  indorsers,  the  title 
must  be  traced  through  their  indorsees.^  While  indorse- 
ments in  blank  may  be  filled  up  by  the  holder  and  thus 
made  indorsements  in  full,  an  indorsement  cannot  be 
changed  to  an  indorsement  in  blank  by  striking  out  the 
name  of  the  indorsee  and  the  other  words  of  indorsement.^ 

§  267.   Absolute  and  conditional  indorsements.  —  The 

absolute  indorsement  creates  in  the  indorsee  the  right  to 
payment,  and  in  the  indorser  the  obligation  to  pay  the 
face  of  the  instrument  in  case  the  maker,  drawer  or  ac- 
ceptor does  not  pay  it,  subject  to  the  single  condition  that 
there  must  be  a  presentment  for  payment  and  a  notice  to 
him  of  non-payment.  But  the  indorsement  may  be  sub- 
jected to  other  conditions,  both  precedent  and  subsequent, 
without  affecting  the  negotiability  of  the  instrument.^  If 
the  condition  is  broken  or  unfulfilled,  the  indorsee  is  not 
entitled  to  payment,  and  if  the  acceptor  or  maker  should 
make  payment  to  such  an  indorsee  before  the  perform- 
ance of  the  condition,  it  would  not  preclude  a  recovery 
against  him  by  the  prior  indorsee.  For  the  maker  and 
acceptor  are  obliged  to  take  notice  of  the  character  of  the 
indorsee.* 


1  Smith  V.  Clarke,  Peake,  225;  Walker  v.  McDonald,  2  Esch.  627; 
Habersham  v.  Lehman,  63  Ga.  383;  Johnson  v.  Mitchell,  50  Tex.  212. 

2  Porter  u.  Cushman,  19  111.  572.  The  striking  out  of  the  name  of  an 
indorsee  would  be  such  an  alteration  of  the  contract  of  the  indorser,  as 
to  release  the  indorser  from  all  liability  on  his  indorsement.  Grimes  v. 
Piersol,  25  Ind.  246. 

3  1  Daniel's  Negot.  Inst.,  §  697;  Story  on  Bills,  §217;  Story  on 
Notes,  §  149, 

*  Robertson  V.  Kensington,  4-  Taunt.  30;  Savage  v.  Aldren,  2  Stark. 
(2  E.  C.  L.  R.)  232;  Soares  v.  Clyn,  8  Q.  B.  (35  E.  C.  L.  R.)  24;  s.  c.  14 
L.  J.  Q.  B.  313. 

445 


§    208  TRANSFKK    15V    INDOUSE.MKNT.  [CII.   XIII. 

§  268.  Restrictive  indorsements. — When  the  further 
negotiation  of  the  bill  or  note  is  destroyed  by  a  provision 
in  the  indorsement,  it  is  called  a  restrictive  indorsement. 
Such  is  the  case  when  the  indorsement  directs  payment  to  A. 
only,  or  to  A.  for  the  use  of  the  indorser  or  of  another,  and 
the  like.^  Another  very  common  restrictive  indorsement  is 
the  indorsement  "for  collection. "^  But  the  negotiability  of 
a  paper  is  not  destroyed  by  an  agreement  not  to  sell  or  dispose 
of  the  paper,  although  the  agreement  may  be  indorsed  on 
the  back.  Such  an  agreement  only  subjects  the  promisor  to 
an  action  for  damages  for  the  breach  of  the  contract.^ 
In  all  cases  of  restrictive  indorsement,  the  indorsee 
cannot  indorse  it  to  another,  and  is  only  authorized  to  col- 
lect the  money  when  the  bill  or  note  is  due,  and  apply  the 
money  so  collected  for  the  use  of  his  indorser,  or  of  the 

1  Eclie  V.  East  India  Co.,  2  Burr.  1221;  Robertson  v.  Kensington,  4 
Taunt.  30;  Suae  v.  Prescott,  1  Atk.  247;  Ancher  t?.  Bank  of  England, 
Dougl.  615;  Sigourney  v.  Lloyd,  8  B.  &  C.  622;  Wilson  v.  Holmes,  5 
Mass.  543;  Brown  y.  Jackson,  1  Wash.  C.  C.  512;  Power  v.  Fiunie,  4 
Call,  411;  Hook  v.  Pratt,  78  N.  Y.  871;  Williams  v.  Potter,  72  Ind.  354; 
Harrison  v.  Sheirburn,  36  Tex.  73;  Johnson  v.  Mitchell,  50  Tex.  212.  Of 
the  same  character  are  the  indorsements,  "credit  my  account,"  and 
"  pay  to  the  order  of  A.,  for  account  of  B."  Lee  v.  Chlllicothe  Ban"k.  1 
Bond,  387;  First  N.  B.  v.  Reno  County,  3  Fed.  Rep.  257;  White  v.  Na- 
tional Bank,  102  U.  S.  658;  Blaine  v.  Bourne,  11  R.  I.  1;  Mechanics' 
Bank  v.  Valley  Packing  Co.,  4  Mo.  App.  200;  Treuttel  u.  Barandon,  8 
Taunt.  100;  5  Moore,  543.  But  it  does  not  make  an  indorsement  restrict- 
ive to  contain  the  words,  "  pay  to  A.  or  order,  value  in  account  withB.," 
"  or  being  part  payment  of  goods  sold  him  by  me,"  or  "being  in  full  of 
debt  due  to  him  by  me,"  since  these  words  constitute  merely  an  acknowl- 
edgment of  the  consideration  for  the  indorsement.  Buckley  v.  Jackson, 
L.  R.  3  Exch.  135;  Potts  v.  Reed,  6  Esp.  57. 

2  Fawsettw.  Nat.  Life  Ins.  Co.,  97  lU.  19;  Mechanics'  Bank  v.  Valley, 
Packing  Co.,  4  Mo.  App.  200;  s.  c.  70  Mo.  643;  Sweeney  v.  Easter,  1  Wall. 
166;  Rock  Co.  Nat.  Bank  v.  Hollister,  21  Minn.  385. 

3  Lelaud  v.  Parriott,  35  Iowa, 454,  Cole,  J.,  saying:  "  The  agreement 
not  to  sell  or  dispose  of  the  note  was  then  an  independent  agreement 
upon  breach  of  which,  if  made-for  a  consideration,  the  obligor  might  be 
liable;  but  it  could  not  have  the  effect  to  destroy  the  negotiability  of  tlae 
note." 

446 


CH.  XIII.]  TRANSFER    BY    INDORSEMENT.  §    269 

pei'soD,  for  whose  use  the  indorsement  had  been  made  to 
him.  The  restriction,  appearing  on  the  back  of  the  instru- 
ment, is  notice  to  all  subsequent  holders  of  the  trust,  and 
such  subsequent  indorsee  will  take  the  paper  subject  to  the 
trust. ^  And  if  payment  berefused,  the  restrictive  indorsee 
cannot  bring  the  action  on  the  paper.  It  must  be  brought 
in  the  name  of  the  person  for  whose  use  the  collection  was 
made. 2  This,  at  least,  is  the  case  where  the  indorsement  is 
made  "for  collection,"  or  "for  the  account  of"  the 
indorser.  Where  the  indorsement  is  "for  collection" 
or  "  for  my  use,"  and  the  like,  it  may  be  recalled  at  the 
pleasure  of  the  indorser,^  and  such  an  indorsement  is 
implied  by  a  subsequent  absolute  indorsement  for  value 
to  another.*  And  where  the  restrictive  indorsement  is 
such  that  it  cannot  be  recalled,  the  negotiability  of 
the  paper  may  be  revived  by  a  re-indorsement  to  the  in- 
dorser, or  by  a  second  absolute  indorsement  by  him  to  the 
restrictive  indorsee.^ 

The  presumption  is  always  against  an  indorsement  being 
restrictive ;  and  it  will  be  held  to  be  absolute,  unless  it  is 
clearly  proven  to  be  restrictive.^ 

§   269.  Time  and  place  of  indorsement  and  transfer. — 

Negotiable  paper  may  be  transferred  by  delivery  or  by  in- 
dorsement, as  the  case   may  be,  at  any  time  after  its  exe- 

1  Sigourney  v.  Lloyd,  8B.  &  C.  (15  E.  C.  L.  R.)  622;  s,  c.  5  Bing.  525; 
3  Y.  &  J.  220;  Hook  v.  Pratt,  78  N.  Y.  371;  Fawsett  v.  Nat.  Life  Ins.  Co., 
97  111.  9;  Claflin  v.  Wilson,  51  Iowa,  15;  Treutiel  v.  Baranclon,  8  Taunt. 
100;  Blaine  v.  Bourne,  11  R.  1. 1 ;  First  Nat.  Bank  v.  Reno,  3  Fed.  Rep.  257; 
Mechanics'  Bank  v.  Valley  Packing  Co.,  4  Mo.  App.  200;  s.  c.  70  Mo.  643. 

2  Rock  Co.  Nat.  Bank  v.  Hollister,  21  Minn.  385;  White  v.  Nat.  Bank, 
102  U.  S.  658;  Third  Nat.  Banki'.  Nat.  Bank,  102  U.  S.  663. 

3  1  Daniel's  Negot.  Inst.,  §  699. 
^  Atkins  V.  Cobb,  56  Ga.  86. 

5  Fawsett  v.  Nat.  Life  Ins.  Co.,  97  111.  19;  Holmes  v.  Hosper,  1  Bay, 
160. 

6  Potts  ^.  Read,  6  Esp.  57;  Treuttel  v.  Barandon,  8  Taunt.  100. 

447 


§    269  TRANSFER   BY   INDORSEMENT.  [CH.  XIII. 

cution,  whether  before  it  falls  due  or  afterwards.  The  dis- 
honor of  a  note  or  bill  does  not  prevent  aiiy  subsequent 
assignment  or  transfer,  whatever  collateral  effect  it  may 
have  upon  the  rights  of  the  postdue  indorsee.^ 

If  the  indorsement  is  not  dated,  the  law  presumes  as 
usual  that  it  was  made  before  the  paper  fell  due  and  be- 
came dishonored,  and  that  the  indorsee  took  it  without 
notice  of  any  defect  of  title  or  of  any  equitable    defense. ^ 

1  Mitfoi'd  V.  Walcott,  Ld.  Raym.  575;  Dehers  v.  Harriott,  1  Show. 
163;  Steins.  Yglesias,  3  Dowl.  252;  Charles  v.  Mursden,  1  Taunt.  224; 
Graves  v.  Kay,  3  B.  &  Ad.  313;  National  Bank  v.  Texas,  20  Wall.  72; 
Britton  v.  Bishop,  11  Vt.  70;  Leavitt  v.  Putnam,  3  Comst.  494;  Baxter  v. 
Little,  6  Mete.  7;  Long  v.  Crawford,  18  Md.  320;  McSherey  t?.  Brooks, 
46  Md.  118;  Davis  v.  Miller,  14  Gratt.  1;  Brown  v.  Hull,  33  Gratt.  28; 
Moyner  v.  Bigelow,  3  Mo.  App.  592;  Powers  v.  Neesou,  19  Mo.  190. 

2  New  Orleans,  etc.,  v.  Montgomery,  95  U.  S.  18,  Swayne,  J.,  saying: 
*'  It  is  not  shown  in  the  proofs  when  the  notes  were  transferred  *  *  * 
In  the  absence  of  such  proof,  the  law  presumes  they  were  taken  under 
due,  in  good  faith,  and  without  notice  of  any  infirmity  attaching  to  them." 
In  Ranger  v.  Cary,  1  Met.  369,  it  is  said:  "A  negotiable  note,  being 
offered  in  evidence  duly  indorsed,  the  legal  presumption  is  that  such  in- 
dorsement was  made  at  the  date  of  the  note,  or  at  least  antecedently  to 
its  becoming  due;  and  if  the  defendant  would  avail  himself  of  any  de- 
fense that  would  be  open  to  him  only  in  case  the  note  were  negotiated 
after  it  was  dishonored,  it  is  incumbent  on  him  to  show  that  the  in- 
dorsement was  in  fact  made  after  the  note  was  overdue."  See  also 
Collins  V.  Gilbert,  94  U.  S.  753;  Good  v.  Martin,  95  U.  S.  94;  Buruham 
V.  Wood,  8  N.  H.  334;  Noxon  v.  DeWolf,  10  Gray,  346;  Frazer's  Admr. 
V.  Frazer,  13  Bush,  400;  Rhode  v.  Alley,  27  Tex.  443;  Johnson  v.  Josey, 
34  Tex.  533;  White  v.  Weaver,  41  111.  409;  Depuy  v.  Schuyler,  45111.  506; 
Cripps  V.  Davis,  12  M.  &  W.  165;  Lewis  v.  Lady  Parker,  4  Ad.  &  E.  (31 
E.  C.  L.  R.)  838;  Parkin  v.  Moon,  7  C.  &  P.  (32  E.  C.  L.  R.)  408;  New 
Orleans  Canal  Co.  v.  Templeton,  20  La.  Ann.  75;  Webster  v.  Calden,  56 
Me.  204;  Snyder  v.  Oatman,  16  Ind.  265;  Leland  r.  Farnham,  25  Vt.  553; 
Alexander  v.  Springfield,  2  Met.  (Ky.)  534;  Mobley  v.  Ryan,  14  111.  51; 
Stewart  v.  Smith,  28  111.  397;  Smith  v.  Nevlin,  89  111.  193;  Barrick  u. 
Austin,  21  Barb.  241;  Herwlricks  v.  Judah,  1  Johns.  319;  Pinkerton  v. 
Bailey,  8  Wend.  600;  McDowell  v.  Goldsmith,  6  Md.  319;  Hopkins  v. 
Kent,  17  Md.  387;  Webster  v.  Lee,  5  Mass.  334;  Mason  v.  Noonan,  7  Wis. 
609;  Smith  v.  Clopton,  4  Tex.  109;  Watson  v.  Flannagan,  14  Tex.  354; 
But  see  contra,  Ruddell  v.  Landers,  25  Tex.  238;  Clendennin  v.  Souther- 
land,  31  Ark. 20. 

448 


CU.  XIII.]  TRANSFER    BY    INDORSEMENT.  §    270 

But  this  presumption  as  to  the  date  of  the  indorsement  is 
not  a  very  strong  one.  There  is  nothing  on  the  face  of  the 
instrument  itself  to  support  the  presumption,  and  hence  the 
slightest  evidence  to  the  effect  that  the  indorsement  was 
after  maturity  would  overturn  the  presumption,  that  it  was 
before  maturity.^ 

A  bill  or  note  which  had  been  reduced  to  a  judgment  in 
an  action  brought  by  the  holder,  cannot  thereafter  be  as- 
signed or  indorsed,  since  the  recovery  of  a  judgment  works 
a  merger  of  the  instrument  of  indebtedness  on  which  the 
suit  is  brought. 2  But  it  is  claimed  that  there  may  be  an 
indorsement  or  assignment,  during  the  pendency  of  the 
suit,  but  it  must  be  before  judgment.^ 

The  indorsement  is  also  presumed  to  have  been  made  at 
the  place  where  the  paper  was  dated.* 

These  presumptions,  as  to  the  time  and  place  of  indorse- 
ment, are  of  course  rebuttable  by  positive  proof  to  the 
contrary.  And  when,  for  example,  the  time  of  the  indorse- 
ment is  proven  to  have  been  subsequent  to  the  execution  of 
the  instrument,  the  laws,  in  force  when  the  indorsement 
was  actually  made,  will  govern  its  interpretation  and  con- 
struction.^ 

§  270.  Irregular  indorsements — Joint  makers,  sure- 
ties, ^larantors,  indorsers.  —  It  has  become,  at  least  in 
this    country,  a  very  common    custom  for  one  to  give  his 

1  Snyder  v.  Riley,  6  Barr.  164;  Hill  v.  Kraft,  29  Pa.  St.  186;  Hatch  v. 
Calvert,  15  W.  Va.  97.  It  has  been  held  in  Georgia  that  the  indorsee  of 
a  note  payable  one  day  after  date,  is  not  presumed  to  have  taken  it  be- 
fore matjiirity;  the  shortness  of  the  time  between  execution  and  ma- 
turity was  held  to  indicate  that  the  paper  was  not  intended  for  circula- 
tion.    Beall  V.  Leverett,  32  Ga.  104. 

2  Wooten  V.  Maullsby,  69  N.  C.  462. 

3  S^e  Daniel's  Negot.  Inst.,  §  1199;  Ober  v.  Goodridge,  27  Gratt.  888. 
*  Maxwell  v.  Vansant,  56  111.  58. 

5  Brown  v.  Hull,  33  Gratt.  30. 

■  29  449 


^    270  TRANSFER    BY    1XD0RS*:ME\T.  [cII.   XIII. 

guaraiit}"  to  the  payment  of  commercial  paper  by  merely 
writing  his  name  on  the  back  of  the  paper.  Since  Jio  has 
not  been  payee  or  indorsee,  he  cannot  be  properly  called 
an  indorser,  if  by  indorsement  we  mean  the  transfer  of  the 
paper  by  the  holder  by  writing  his  name  on  the  back.  If 
indorsement  means  merely  a  writing  on  the  back  of  the 
paper,  no  account  being  taken  of  the  purpose,  then  it  may 
be  permissible  for  a  guarantor,  writing  his  name  on  the 
back  of  a  negotiable  instrument,  to  be  called  an  indorser. 
He  is  in  fact  a  guarantor.  He  does  not  intend  to  do  more 
than  guarantee  the  payment  of  the  paper.  But  the  chief 
difficulty  in  the  way  of  construing  the  obligation  thus  as- 
sumed as  a  guaranty  is  the  fact,  that  the  statute  of  frauds 
requires  all  guaranties  to  be  in  writing.  The  mere  writing 
on  the  back  the  name  of  a  person  not  otherwise  connected 
with  the  instrument,  without  stating  the  oblinration  as- 
sumed,  would  not  satisfy  this  requirement  of  the  statute  of 
frauds.  If  the  facts  should  warrant  the  construction  that 
he  is  a  surety  or  joint-maker,  the  difficulty  in  respect  to 
the  statute  of  frauds  would  be  avoided  ;  but  there  would 
still  be  tbe  objection  to  be  met,  that,  as  surety  or  joint- 
maker,  the  holder  of  the  paper  would  not  be  obliged  to 
give  notice  of  a  demand  on  the  primary  obligor,  in  order  to 
hold  the  surety  liable.  That  requirement  of  a  notice  of 
non-payment  is  a  very  important  safeguard  to  the  irregular 
indorser,  and  he  customarily  relies  upon  it.  But  the  com- 
mon-law merchant,  independent  of  statute,  does  not  recog- 
nize any  one  but  an  indorser  having  this  right  to  notice. 

In  their  attempt  to  avoid  these  several  objections  the 
courts  have  reached  contrary  conclusions.  They  are  prac- 
tically unanimous  that  one  who  appears  on  the  face  of  the 
paper  to  be  the  lawful  holder,  cannot  assume,  by  writing  his 
name  on  the  back,  any  other  liability  than  that  of  indorser.^ 

1  Fmleyr.  Greeu,  85  111.  535;  Snell  v.  Northside  Mill  Co.,  89  111.  582; 
450 


CH.  XI I r.]  TRANSFER    BY    INDORSEMENT.  §    270 

And  so,  also,  where  the  paper  is  payable  to  bearer 
in  terms  on  the  face,  or  becomes  so  by  a  blank  indorse- 
ment, any  one  writing  his  name  on  the  back  sustains  the 
liability  of  an  indorser,  unless  by  some  accompanying 
statement  he  expressly  indicates  the  intention  to  be  bound 
in  some  other  character  than  as  indorser. ^  The  indorse- 
ment of  the  payee  in  blank,  preceding  the  irregular  in- 
dorsement, does  not  conflict  with  the  view  that  the  second 
indorsement  is  an  indorsement  in  fact.  And  this  would, 
also,  at  least  as  to  bona  fide  holders,  be  the  case,  where  the 
indorsement  by  the  payee  comes  first  on  the  paper,  although 
the  irregular  indorsement  was  made  before  the  payee's  in- 
dorsement. In  all  such  cases,  the  irregular  indorser,  as  to 
bona  fide  holders,  assumes  the  liability  of  a  second  in- 
dorser.^ 

But  where  the  signature  of  the  irregular  indorser  precedes 
the  indorsement  of  the  payee,  or  where  the  regular  indorse- 
ments are  all  special ;  if  there  is  an  unbroken  line  of  indorse- 
ments to  order,  or  the  irregular  indorsement  precedes  the 
regular  indorsement  in  blank,  the  position  of  the  signature 
is  ambiguous,  and    in  the  absence  of  parol  proof  of  the  in- 

Clappi?.  Rice,  13  Gray,  403;  Howe  v.  Merrill,  5  Cush.  80;  Moiesu.  Bird,  11 
Mass.  43G;  Vore  v.  Hurst,  13  Ind.  551;  Dale  «.  Moffitt,  22  Ind.  lU;  Rob- 
erts v.  Masters,  40  Ind.  463;  Rickey  v,  Dameron,  48  Mo.  61;  Coon». 
Pruden,  25  Minn.  105. 

1  A  case,  where  tlie  paper  lias  been  indorsed  by  the  payee,  in  blank, 
and  afterwards  by  some  third  person,  ' '  does  not  fall  within  that  anomal- 
ous class  of  cases  where  a  third  person,  neither  maker  nor  payee,  puts 
his  name  on  the  back  of  a  note  before  its  indorsement  by  the  payee,  but 
is  the  ordinary  case  of  an  indorsement  of  a  note  payable  to  bearer,  the 
effect  of  wliich  cannot  be  varied  or  controlled  by  pai'ol  proof."  Bigelow 
V.  Cotton,  13  Gray,  309;  Dubois  v.  Mason,  127  Mass.  37;  Thatcher  v.  Stev- 
ens, 48  Conn.  561;  Camdea  v.  McKoy,  3  Scam.  437.  See  Seabury  u. 
Hungerford,  2  Hill,  80, where  the  party  indorsing  styled  himself  "  backer." 

2  Clapp  V.  Rice,  13  Gray,  403;  Dubois  v.  Mason,  127  Mass.  37.  The 
same  result  is  reached,  vvhere  the  name  of  the  party  signing  on  the  back 
is  inserted  as  payee.  Armstrong  v.  Hai'shman,  61  Ind.  52;  Morris  i;. 
Walker,  69  Eng.  C.  L,  R.  588 ;  Frank  v.  Lilienfeld,  33  Gratt.  393. 

451 


§    270  TRANSFER    BY    INDORSEMENT.  [cil.  XIII. 

tention  of  the  party  signing,  its  meaning  is  open  to  con- 
jectures and  presumptions.  The  courts  generally  presume 
that  a  name,  coming  before  the  name  of  the  payee  in  a  paper 
payable  to  order,  was  placed  there  before  the  indorsement  by 
the  payee,  and  for  the  j^urpose  of  giving  his  financial  credit  to 
the  holder  of  the  paper.  ^  The  liabilit}^  of  a  person,  so  signing 
on  the  back  before  the  payee,  is  presumed  to  rest  upon  the 
same  condition  as  the  paper  itself.^  But  in  respect  to  the 
character  in  which  such  a  person  should  be  held  liable  on  his 
indorsement,  the  courts  are  completely  at  variance.  Very 
many,  perhaps  a  plurality  of  the  cases,  maintain  that  he  is 
prima  facie  liable  as  a  joint  maker.^  Other  cases,  while 
holding  him  to  be  a  co-maker,  impose  upon  him  the 
liability  of  a  surety  or  guarantor.'* 

1  Union  Bank  v.  Willis,  8  Met.  504;  Way  v.  Butterworth,  108  Mass. 
508;  Western  Boatmen's  Assn.  v.  Wolff,  45  Mo.  104;  Cecil  v.  Mix,  6  Ind. 
478;  Mariewthal  v.  Taylor,  2  Minn.  147. 

2  Good  V.  Martin,  95  U.  S.  90;  Austin  v.  Boyd,  24  Pick.  64. 

3  Rey  i;.  Simpson,  22  How.  241 ;  Good  v.  Martin,  95  U.  S.  95;  Mammon 
V.  Hartman,  51  Mo.  169;  Seymour  v.  Farrell,  51  Mo.  95;  Cohn  v.  Duliou, 
60  Mo.  297;  Temple  v.  Turner,  65  Mo.  696;  Schneider  v.  Schiffmau,  20 
Mo.  571;  Union  Bank  v.  Willis,  6  Met.  504;  Ilawkes  v.  Phillips,  7  Gray, 
284;  Draper  v.  Weld,  13  Gray,  580;  Woods  v.  Woods,  127  Mass.  141; 
Spaulding  v.  Putnam,  128  Mass.  363;  Woodman  v.  Boothy,  66  Me.  389; 
Watson  V.  Hurt,  6  Gratt.  633;  Orrick  v.  Colston,  7  Gratt.  189;  Gilpin  v. 
Marley,  4  Houst.  284;  Com.  v.  Powell,  11  Gratt.  828;  Houghton  w.  Ely,  26 
Wis.  181;  Rotschild  v.  Grix,  31  Mich.  150;  Best  v.  Hoppie,  3  Col.  139; 
City  Nat.  Bk.  v.  Goddrich,  3  Col.  137;  Perkins  r?.  Barstow,  9  R.  I.  507; 
Childs  V.  Wyman,  44  Me.  433;  Carpenters.  Oaks,  10  Rich.  17;  Martin  v. 
Boyd,  11  N.  H.  385;  Weatherwax  v.  Paine,  2  Jlich.  555;  Herbage  v.  Mc- 
Entee,  40  Mich.  337;  Sibley  v.  Jluskegan  N.  B.,  41  Mich.  196;  Moynahan 
V.  Hanford,  42  Mich.  330;  Baker  v.  Robinson,  63  N.  C.  191;  Sylvester  v. 
Downey,  20  Vt.  355;  McCorab  v.  Thompson,  2  Minn.  139;  Peckham  v. 
Gilman,  7  Minn.  449;  Robinson  v.  Bartlett,  11  Minn.  410;  Ives  v.  Bosley, 
35  Md.  202;  Scliley  v.  Merritt,  37  Md.  352;  Walz  v.  Alback,  37  Md.  404; 
Norris  v.  Despard,  38  Md.  491;  Third  Nat.  Bank  v.  Lange,  51  Md.  138; 
Owings  t;.  Baker,  54  Md.  82;  Barr  v.  Mitchell,  7  Oreg.  346;  McGee  v.  Con- 
nor, 1  Utah,  92, 

4  Cook  V.    Southwick,   9  Tex.    615;  Carr  v.   Rowland,  14   Tex,  275; 
Chandler   v.   Westfall,  30   Tex.  477;   Killian  «.  Ashley,  24  Ark,  212;  Me- 
452 


CH.  XIII.]  TRANSFER    BY    INDORSEMENT.  §    270 

Inasmuch  as  the  theory  that  the  irregular  indorser  is  a 
Joint  maker  is  in  contradiction  of  what  is  known  to  be  the 
fact  in  many  of  the  cases,  many  of  the  courts  presume  that 
the  party  writing  his  name  on  the  baciv  does  not  participate 
in  the  original  consideration  and  that  he  must  be  seconda- 
ril}'  liable  as  a  guarantor,  instead  of  being  a  joint  maker. ^ 
The  principal  objection  to  the  theory  of  a  guaranty  is  that 
the  statute  of  frauds  requires  guaranties  to  be  in  writing. 
In  many  of  the  States,  it  is  held  that  the  statute  of  frauds 
does  not  apply  to  such  obligations,^  while  in  other    States, 

Guire  v.-  Bosworth,  1  La.  Anu.  248;  Chorm  v.  Merrill,  9  La.  Ann.  533; 
Syme  v.  Brown,  79  La.  Ann.  147.  The  authorities  generally  hold  him  to 
be  a  maker  as  to  the  holder  of  the  paper,  but  a  surety  as  to  the  regular 
maker.  Good  v.  Martiu,  95  U.  S.  90;  Hoffman  v.  Moore,  82  N.  C.  313; 
Killian  v.  Ashley,  24   Ark.  511. 

1  Camden  u.  McCoy,  3  Scam.  437;  Cushman  v.  Dement,  4  Scam.  497, 
Carroll  V.  Weld,  13111.  482;  Klein  v.  Currier,  14  111.  237;  Webster  v.  Cobb, 
17  111.  459;  Dietrich  i'.  Mitchell,  43  111.  46;.Parkhurst  v.  Vail,  73  111.  343; 
Glickauf  v.  Kaufman,  73  111.  378;  White  v.  Weaver,  41  111.  409; 
Lincoln  v.  Hensey,  51  111.  437;  Clark  ».  Merriam,  25  Conn.  576; 
Beckwith  v.  Angell,  6  Conn.  315;  Ranson  v.  Sherwood,  26  Conn. 
437;  Holbrook  v.  Camp.  38  Conn.  23;  Gillespie  v.  Wheeler,  46  Conn 
410;  Bradley  v.  Phelps,  2  Root,  325;  Fuller  v.  Scott,  8  Kan.  32; 
Seymour  v.  Mickey,  15  Ohio  St.  515;  Robinson  v.  Abell,  17  Ohio 
St.  36 ;  Van  Doreu  v.  Tjader,  1  Nev.  380.  In  California,  he  is  deemed 
to  be  a  guarantor,  but  he  is  required  to  be  given  notice  of  non-payment. 
Pierce  V.  Kennedy,  5  Cal.  138;  Geiger  ?;.  Clark,  13  Cal.  679;  Riggs  v 
W^aldo,  2  Cal.  485;  Pord  v.  Henderson,  34  Cal.  673;  Crooks  v.  Tally,  50 
Cal.  673;  Jones  v.  Goodwin,  39  Cal.  493.  Statutes  now  provide  that  such 
a  person  must  be  treated  as  a  guarantor,  unless  his  character  is  other- 
wise expressed,  in  Iowa  (1880,  1  McClaiu's  Ann.  Stat.  586,  §  2089),  Illi- 
nois (1883,  R.  S.,  ch.  98,  §  8). 

^  Chaddock  v.  Vanness,  6  Vroora,  517,  Depue,  J.,  saying:  "When  the 
party  indorses  upon  the  note  a  guaranty  in  writing,  or  his  undertaking  is 
subsequent  to  the  making  of  the  note  and  therefore  requires  a  new  con- 
sideration for  its  support,  it  may  be  difficult  to  exclude  the  agreement 
from  the  operation  of  the  statute  of  frauds.  But  no  such  difficulty  will 
be  experienced,  when  the  indorsement  is  in  blank  and  is  made  prior  to  or 
contemporaneous  with  the  delivery  of  the  note.  If  a  defendant  puts  his 
name  upon  the  back  of  a  promissory  note  as  a  surety  or  guaranty  for  its 
payment,  in  pursuance  of  au  original  agreement  entered  into  before  or  at 

453 


§    271  TRANSFER    HV    INDOKSKMENT.  [cil.   Xlil. 

it  is  held  that  the  statute  applies  in  all  its  strictness,  and  re- 
quires a  full  statement  of  the  obligation  and  of  the  con- 
sideration.^ But,  in  those  States  where  the  holder  is  held 
to  have  the  authority  to  write  out  a  full  and  complete 
guaranty  over  the  signature  of  the  guarantor ,2  the  guar- 
anty becomes  effectual  whenever  it  is  written  in  full. 

If  the  guaranty  indorsement  is  contemporaneous  with  the 
original  obligation,  the  original  consideration,  such  as  a  loan 
to  the  princi[)al  debtor,  will  serve  for  both.^  But  if  the 
guaranty  is  given  subsequently,  a  new  consideration  must 
be  proven.'* 

§  271.   Irregular  indorsements  —  Continued.  —  But  in 

order  to  avoid  all  the  objections  that  may  be  urged  against 
the  theories  heretofore  presented,  some  of  the  courts,  in- 
cluding Pennsylvania  and  New  York,  hold  that  a  person, 
undertaking  to  guarantee  the  payment  of  a  negotiable  in- 
strument by  writing  his  name  on  the  back,  is  liable  as  an 

the  time  of  giving  the  note,  in  consideration  of  which  the  payee  agrees  to 
accept  it,  the  payee  may  write  over  such  signature  a  guaranty  or  promise 
to  pay,  which  shall  be  a  sufficient  memorandum  within  the  statute  of 
frauds."  See  also  King?;.  Ritchie  18  Wis.  682;  Houghton  r.  Ely,  26 
"Wis.  181.  The  same  conclusion  is  reached  in  a  case,  where  the  indorse- 
ment was  made  some  days  after  the  execution  of  note.  Ford  v.  Hen- 
dricks, -34  Cal.  673. 

1  Smith  V.  Kessler,  44  Pa.  St.  142;  Van  Doren  v.  Tjader,  1  Nev,  380. 

*  Such  is  the  case  in  Illinois,  New  Jersey,  Kentucky  and  other  States, 
See  Boyuton  v.  Pierce,  79  111.  145;  Cushman  v.  Dement,  4  111.  497;  "Web- 
ster V.  Cobb,  17  111.  459;  Heinz  v.  Cahn,  29  111.  308;  Chaddockv.  "Vanness, 
6"Vroom,  517;  Arnold  v.  Bryant,  8  Bush,  6G8;  Rivers  v.  Thomas,  1  Lea. 
049;  Harding  v.  Waters,  6  Lea,  324;  Levi  v.  Mendell,  1  Duv.  77;  Nelson  v. 
Dubois,  13  Johns.  175;  White  v.  Weaver,  41  111.  409. 

3  Carroll??.  Weld,  13  HI.  682;  Kracht  v.  Obst.,  14  Bush,  34;  Klein  v. 
Carrier,  14  111.  237;  Heinz  v.  Cahn,  29  111.  308;  Kiskadden  v.  Allen,  7  Col. 
20G;  Riggs  v.  Waldo,  2  Cal.  485;  "Veach  v.  Thompson.  15  Iowa,  380; 
Schwarzansky  v.  Averill,  7  Daly,  254;  Parkhurst  v.  Vail,  73  111.  343. 

•*  Tenney  v.  Prince,  4  Pick.  385.     In  New  York,   by  statute,  the  new 
consideration  must  be  expressed  in  the  guaranty.     Hall  v.  Farmer,   5 
Denio,  484;  affirmed,  2  N.  Y.  5.53 
454 


CH.  XIII.]  TRANSFER    BY    INDORSEMENT.  §    271 

indorscr.  He  is  generally  held  to  be  a  second  indorser, 
since  the  payee  maj^  make  the  signature  of  the  guarantor 
appear  to  be  a  second  indorsement,  by  indorsing  the  paper 
to  the  guarantor's  order. ^     But  of  late  it  has  been  held  in 

^  In  Hall  V.  Newcomb,  7  Hill,  416,  the  court  said:  "  The  question  for 
our  consideration  is,  whether  a  person  who  puts  his  name  in  blank  upon 
the  back  of  a  negotiable  note,  which  is  drawn  in  a  form  that  he  may  be 
charged  as  indorser,  in  the  usual  mode,  if  a  demand  is  made  and  notice 
given  of  non-payment,  can  be  charged  as  a  general  surety,  without  such 
demand  and  notice,  by  parol  evidence  merely.  The  courts  have  gone 
far  enough  in  repealing  the  statute  to  prevent  frauds  and  perjuries 
by  introducing  parol  evidence  to  charge  a  mere  surety  for  the  principal 
debtor,  by  showing  that  his  written  agreement  means  something  else 
than  what,  upon  its  face,  it  purports  to  mean.  And  I  fully  concur  in  the 
opinion  expressed  by  Mr.  Justice  Bronson,  in  Seabury  v.  Hungerford,  2 
Hill,  80,  that  where  a  man  writes  his  name  in  blank  upon  the  back  of  a 
negotiable  promissory  note,  he  only  agrees  that  he  will  pay  the  note  to 
the  holder,  on  receiving  due  notice  that  the  maker,  upon  demand  made 
at  the  proper  time,  has  neglected  to  pay  it.  Mere  proof  that  he  indorsed 
the  paper,  to  enable  the  maker  to  raise  money  on  it,  does  not  change  the 
nature  of  his  legal  liability  as  indorser,  where  the  note  is  in  the  hands  of 
a  bona  fide  holder  for  a  good  consideration.  Such  was  the  whole  effect 
of  the  parol  proof  in  this  case,  ^nd  for  the  courts  to  allow  proof  by 
parol  to  charge  a  mere  surety,  beyond  the  legal  effect  of  his  written 
blank  indorsement  on  such  pape"r,  would  bring  them  in  direct  conflict 
with  the  provisions  of  the  statute  of  frauds."  *  *  *  Where  a  note 
is  made  payable  to  an  individual  or  his  order,  and  is  indorsed  by  him  in 
blank,  and  in  that  situation  is  presented  to  anoth&r  person  for  his  ac- 
commodation indorsement,  who  indorses  it  accordingly,  the  legal  effect 
of  his  indorsement  is  to  make  him  liable  in  the  character  of  second  in- 
dorser merely;  and  he  can,*in  no  event,  be  made  legally  liable  to  the  first 
indorser.  And  if  the  maker,  or  the  first  indorser,  or  any  other  person 
into  whose  hands  the  note  might  suljsequently  come,  should  without  the 
consent  of  the  second  indorser,  fill  up  the  first  indorsement  specially, 
without  recourse,  to  such  first  indorser,  so  as  to  deprive  the  second  in- 
doi*ser  of  his  remedy  over,  in  case  he  should  be  compelled  to  pay  the 
note,  it  would  be  a  gross  fraud  upon  hira,  if  not  a  forgery.  But  when 
such  a  note  is  presented  to  the  accommodation  indorser,  and  is  indorsed 
by  him  without  having  been  previously  indorsed  by  the  person  to  whose 
order  the  same  is  made  payable,  the  latter  may,  at  the  time  he  put  his 
indorsement  upon  it,  indorse  it  specially,  without  recourse,  to  himself, 
so  as  to  leave  the  second  indorser  liable  to  any  person  into  whose  hands 
it  may  subsequently  come   for  a  good   consideration,  and  without  any 

455 


§    271  TRANSFER    BV    INDORSEMENT.  [cil.   XIII. 

New  York  that  when  one,  otherwise  a  straiifjer  to  a  uejjo- 
tiable  instrument,  indorses  it  before  the  payee,  for  the  pur- 
pose of  guaranteeing  the  payment  to  the  payee  and  his 
assigns,  proof  of  that  fact  will  render  him  liable  as  the  first 
iudorser,  and  the  payee  who  becomes  the  second  indorser, 
may  have  his  remedy  against  the  accommodation  indorser.^ 


remedy  over  against  the  fiivst  iadorser;  or,  if  the  object  of  the  second  iu- 
dorser Avas  to  enable  the  drawer,  as  in  this  case,  to  oljtain  money  from 
the  payee  of  the  note,  upon  the  credit  of  such  accommodation  indorser, 
be  may  indorse  it  in  the  same  way,  without  recourse,  and  by  such  in- 
dorsement may  either  make  it  payable  to  the  second  indorser  or  to  the 
bearer.  And  such  original  payee  may  then,  as  the  legal  holder  and 
owner  of  the  note,  recover  thereon  against  such  second  indorser,  upon  a 
declaration  stating  such  special  indorsement  by  him,  and  subsequent  in- 
dorsement of  the  note  to  him  by  the  second  indorser.  Or  he  may  re- 
cover on  the  common  money  counts,  under  the  statute,  by  senMng  a  copy 
of  the  note  and  of  the  indorsements  so  made  thereon,  with  his  declara- 
tion. But  as  the  second  indorser,  if  he  has  not  waived  notice  of  the  de- 
mand of,  and  non-payment  by  the  maker,  cannot  be  made  liable  upon  his 
indorsement,  without  proof  of  such  demand  and  notice,  the  plaintiff,  at 
the  trial,  must  prove  the  same  cr  he  cannot  recover."  See  also  Eilbert 
V.  Finkbeiner,  68  Pa.  St.  247,  Sharswood,  J.,  sayinjr:  "Nobody  ever 
doubted  that  when  a  man  puts  his  name  on  the  back  of  a  negotiable 
paper  before  the  payee  has  indorsed  it,  he  means  to  pledge,  in  some 
shape,  his  responsibility  for  the  payment  of  it.  Kyner  v.  Shower,  1  liar. 
44G.  This  count  finally  settled,  that  in  the  absence  of  legal  evidence  of 
any  different  contract,  he  assumes  the  position  of  a  second  indorser,  and 
that  to  render  his  engagement  binding  as  to  any  holder  of  the  note,  the 
implied  condition  that  the  payee  shall  indorse  before  him  must  be  com- 
plied with,  so  as  to  give  him  recourse  agaiusCthe  payee.  Shaler  v.  The 
Farmers'  &  Mechanics'  Bank,  9  P.  F.  Smith,  144."  See  also,  to  the  same 
effect,  Cottrell  v.  Conklin,  4  Duer,  45;  Spies  v.  Gilmore,  I  Comst.  321; 
Phelps  V.  Vischer,  50  N.  Y.  69;  Woodruff  v.  Leonard,  8  N.  Y.  S.  C.  (I 
Hun),  632;  Heath  v.  Vancott,  9  Wis.  510;  Cady  v.  Shepard,  12  Wis.  639; 
King  V.  Ritchie,  18  Wis.  554;  Wells  v.  Jackson,  6  Blackf.  40;  Earle  v. 
Foster,  7  Blackf.  35;  Roberts  v.  Masters,  40  lud.  460;  Bronson  v.  Alex- 
ander, 43  lud.  241;  Drake  r.  Markle,  21  Ind.  433;  Dale  v.  Mofflt,  22  lud. 
113;  Mirre  v.  Chittenden,  56  Ind.  465;  Browning  v.  Merritt,  01  Ind.  225; 
Rivers  v.  Thomas,  1  Lea,  649;  Brinkley  v.  Boyd,  9  Heisk.  149;  Needham 
V.  Paige,  3  B.  Mon.  465;  Kellogg  v.  Dunn,  1  Met.  (Ky.)  215;  Thomas  v. 
Jennings,  13  Miss.  627;  Jennings  v.  Thomas,  21  Miss.  617. 

1  Moore  v.  Cross,  19  N.  Y.  227;  Coulter  v.  Richmond,  59  N.  Y.  479, 
456 


CH,  XIII.]  TRANSFER    BY    INDORSEMENT.  §    271 

The  contrariety  of  opinion  thus  displayed,  is  but  the 
necessary,  albeit  a  somewhat  unusual,  result  of  an  effort 
of  the  courts  to  legislate  under  the  fictitious  pretense  of 
only  declaring  what  the  law  is.  There  cannot  be  any  doubt 
that  the  average  person  who  signs  his  name  on  the  back  of 
a  negotiable  instrument,  without  having  been  the  holder  of 
the  paper,  knows  and  intends  that  he  will  thereby  assume  the 
liability  of  a  guarantor,  and  that  he  W'ill  pay  the  sum  due, 
after  receiving  prompt  notice  of  the  demand  on  the  primary 
debtor  and  his  refusal  to  pay.  In  other  words,  this  guar- 
antor desires  and  expects  the  protection  afforded  to  the  in- 
dorser  by  the  rule  of  the  law  merchant,  which  requires  the 
holder  of  a  negotiable  instrument  to  notify  all  indorsers 
promptly  of  the  dishonor  of  the  instrument  by  the  primary 
debtor,  in  order  to  hold  the  indorsers  liable.  That,  how- 
ever, is  the  privilege  of  indorsers  only;  and  in  order  to 
carry  out  the  implied  intent  of  the  party  signing,  many  of 
the  courts  have  held  him  to  be  an  indorser.  It  is  undoubt- 
edly proper  that  he  should  be  given  this  notice.  But  he 
cannot  be  called  an  indorser,  for  he  is  in  fact  not  one.  If 
there  has  been  an  indorsement  in  blank  b}''  the  payee  or  by 

Church,  C.  J.,  saying:  "In  this  State  it  has  been  repeatedly  held,  and  is 
too  strongly  settled  by  authority  to  be  disturbed,  that  a  person  making 
such  an  indorsement  is  presumed  to  have  intended  to  become  liable  as 
second  indorser,  and  that  on  the  face  of  the  paper  ■without  explanation 
he  is  to  be  regarded  as  second  indorser,  and  of  course  not  liable  upon 
the  note  to  the  payee,  who  is  supposed  to  be  the  first  indorser.  As  the 
paper  itself  furnishes  only  pnma  facie  evidence  of  this  intention,  it  i§ 
competent  to  rebut  the  presumption  by  parol  proof  that  the  indorsement 
was  made  to  give  the  maker  credit  with  the  payee.  Such,  among  others, 
was  the  case  of  Moore  v.  Cross,  19  N.  Y.  227,  where  the  indorsement  was 
made  to  enable  the  maker  to  purchase  coal  of  the  payee ;  and  it  was  held 
that  the  person  making  it  was  liable  as  first  indorser,  and  that  the  payee 
could  maintain  an  action  against  him  upon  the  note,  or  if  the  payee  trans- 
ferred it,  he  might  indorse  it  without  recourse."  See  also  Jaffray  v. 
Brown,  74  N.  Y.  394;  Phelps  v.  Vischer,  50  N.  Y.  71.  See  Milton  r.  De 
Yarapert,  3  Ala.  648;  Price  v.  Lavender,  38  Ala.  389;  Hooks  v.  Ander- 
son, 58  Ala.  238. 

457 


§    271  TRANSFER    BY    INDORSEMENT.  [(II.   XIIl. 

the  last  indorsee  to  order,  the  party  so  signing  might  phuisi- 
biy  be  presumed  to  be  a  holder  who  indorses  in  blank. 
For  he  could  easily  be  made  in  form  an  indorser,  by  hav- 
ing an  indorsement  written  over  some  other  signature  in 
his  favor.  But  where  there  is  an  unbroken  line  of  special 
indorsements  from  the  payee  to  the  holder,  there  is  no 
room  whatever  for  the  presumption  that  one,  not  an  in- 
dorsee, who  writes  his  name  on  the  back,  is  an  indorser. 

If  the  irregular  indorsement  precedes  the  indorsement 
by  the  payee,  the  presumption  is  reasonable  that  it  was 
made  before  the  negotiation  of  the  paper,  and  is  based 
upon  the  original  consideration  moving  from  the  payee. 
That  presumption  legitimately  leads  to  the  second  pre- 
sumption that  this  person  signed  as  joint  maker,  in  the 
character  of  a  surety.  But  if  the  irregular  indorsement 
follows  the  payee's  indorsement,  it  seems  to  me  the  only 
reasonable  presumption  is  that  he  signed  as  a  guarantor. 

In  order  to  remedy  ibis  confusion  and  contradiction  of 
authorities,  statutes  have  been  passed  in  many  of  the 
States  establishing  statutory  presumptions  in  the  place  of 
these  judicial  presumptions,  or  giving  such  parties  the  pro- 
tection afforded  by  the  general  law  merchant  to  indorsers 
of  negotiable  paper.  Thus  in  Massachusetts,  it  is  now 
provided,^  that  "  all  persons  becoming  parties  to  promissory 
notes  by  a  signature  in  blank  on  the  back  thereof  shall  be 
entitled  to  notice  of  non-payment  the  same  as  an  indorser."  ^ 

1  Mass.  Gen.  Stat.  1874,  ch.  404;  Commercial  Bank  v.  Law,  127  Mass. 
72. 

2  He  is  declared  to  be  liable  as  an  indorser  in  Connecticut  (1884,  Pub. 
Acts,  p.  3G5);  California  (1880,  1  Hitt.  Codes,  §§  8108,  8117),  and 
Dakota  (1877,  Rev.  Codes,  472,  §  1845).  In  Iowa  (1880,  1  McClain  Ann. 
Stat.  580,  §  2089),  and  Illinois  (1883,  R.  S.,  ch.  98,  §  8)  he  is  declared  to 
be  a  guarantor.  In  Georgia  (Collins  v.  Everett,  4  Ga.  266),  he  is  made 
by  statute  a  surety  as  to  all  persons;;  and  in  North  Carolina  (Batt.  Rev., 
ch.  10,  §  10)  as  to  the  holders  of  all  kinds  of  commercial  paper,  except 
foroiirn  and  inland  bills  cf  exchange. 

458 


CH.  XIII.]  TRANSFER    BY    INDORSEMENT.  §    272 

§  272.  Admissibility  of  parol  evidence  in  respect  to 
irregular  indorsements. — But  whatever  difficulty  the 
courts  have  in  determining  what  is  the  proper  presumption 
in  respect  to  irregular  indorsement,  they  are  practically 
unanimous  in  holding  that,  as  between  the  immediate  par- 
ties, it  is  competent  to  show  by  parol  evidence  in  what 
character  the  irregular  indorser  intended  that  he  should  be 
bound,  and  proof  of  this  intention  would  countervail  the 
prima  facie  presumption  set  up  by  the  court. ^  Thus  it 
has  been  permitted  to  show  that  such  a  person  intended  to 
be  bound  as  a  guarantor ;  ^  as  a  maker ;  ^  as  a  surety  or 
joint  maker;  *  as  an  indorser,  first  or  second.^ 

Parol  evidence  is  held  to  be  admissible,  even  where  the 
indorsement  was  written  below  the  signature  of  the  payee.^ 

1  Good  V.  Martin,  95  U.  S.  95;  Key  v.  Simpson,  22  How.  241;  Cliad- 
dock  V.  Vanness,  35  N.  J.  L.  571;  Riley  v.  Gerrisli,  9  Cash.  104;  Johnson 
V.  Ramsey,  14  Vroom,  279;  Sylvester  v.  Downer,  20  Vt.  355;  Quin  u. 
Sterne,  26  Ga.  224;  Watkius  v.  Kirkpatrick,  2  Dutch.  84;.  Ackerman  t?. 
Westervelt,  2  Dutch.  92?i;  Ives  v.  Bosley,  35  Md.  562;  Owings  v.  Baker, 
54  Md.  82;  Brown  v.  Reasner,  5  Bradw.  45;  Calm  v.  Dutton,  60  Mo.  297; 
Jfurre  v.  Chittenden,  56  Ind.  465;  Baker  v.  Scott,  5  Rich.  305;  Falkner  v. 
Falkner,  60  Mo.  327;  Comparree  v.  Brockway,  11  Humph.  358;  Perkins 
V.  Catlin,  11  Conn.  213;  Piersew.  Irvine,  1  Minn.  369;  Jennings  v.  Thomas, 
13  Smed.  &  M.  617;  Strong  v.  Ricker,  16  Vt.  554;  Coolcy  v.  Lawrence,  4 
Mart.  (o.  8.)  639;  Iser  v.  Cohen,  57  Tenn.  421;  Taylor  v.  French,  2  Lea, 
560;  Welsh  u   Ebersole,  15  W   Va    651. 

2  Camden  v.  McCoy,  3  Scam.  437;  Worden  v.  Salter,  90  111.  160;  Sey- 
mour ».  Farrell,  51  Mo.  95;  Taylor  v.  French,  2  Lea,  560;  Barrows  v. 
Lane,  5  Vt.  161;  Levi  v.  Mendell,  1  Duv.  77;  Browning  v.  Merritt,  61 
Ind.  425,  Eilbert??.  Finkheiner  68  Pa.  St.  243. 

^  Lincoln  v.  Hinzey,  51  111.  435. 

*  Rey  V.  Simpson,  22  How. -341;  Walz  v.  Alback,  37  Md.  404;  Kealing 
V,  Vansickle,  74  Ind.  529;  Baker  v.  Robinson,  63  N.  C.  191. 

*  Mammon  V.  Hartman  51  Mo  169;  Lewis  v.  Harvey,  18  Mo.  474; 
Western  Boatmen's  Assn.  v.  Wolf,  45  Mo.  104 ;  Kuntz  v.  Tempel,  48 
Mo.  71 ;  Eberhart  v.  Page,  89  111.  550;  Hamilton  r.  Johnston,  82  111.  39; 
Cady  V.  Shepard,  12  Wis.  713;  Seymour  v.  Mackey,  15  Ohio  St.  515; 
Bcidmau  v.  Gray,  35  Mo.  282;  Patch  v.  Washburn,  16  Gray,  82;  Kellogg 
V.  Dunn,  2  Mot.  (Ky.)  215;  Burtou  v.  Hansford,  10  W.  Va.  470. 

6  Brown  v.  Butler,  99  Mass.  179;  Clawson  v.  Gustin,  2  South.  821. 

459 


§  272  TRANSFER  BY  INDORSEMENT.       [CH.  XIII. 

And  wherever  parol  evidence  is  admissible,  it  is  competent 
to  show  by  it  that  the  party  signed  before  the  delivery  of 
the  paper  to  the  payee,  and  that  he  intended  to  guarantee 
its  payment  to  the  payee. ^  It  is  also  competent  to  show 
by  parol  evidence  the  character  of  the  indorsement, 
whether  it  was  made  after  maturity  ^  or  before  the  indorse- 
ment without  recourse  by  the  payee, ^  or  whether  the 
instrument  was  negotiable  or  not.* 

The  admissibility  of  parol  evidence  may  be  justified  on 
the  ground  that  the  position  of  the  signature  on  the  back 
is  ambiguous  in  itself,  and  the  contract  not  being  fully  ex- 
pressed in  the  mere  signature,  may  be  explained  and  proved 
by  parol  evidence.  When  the  payee  or  indorsee  writes  his 
name  across  the  back  of  the  paper,  there  is  no  ambiguity, 
concernino-  the  character  and  meaning  of  the  sijrnature,  to 
be  explained  away.  But  if  any  one  alone  writes  his  name 
thereon,  he  only  becomes  a  party  to  the  instrument  by  his 
signature,  and  the  position  of  the  signature  does  not  clearly 
indicate  the  character  in  which  he  signed.  It  can  therefore 
be  shown  by  parol  evidence.^ 

Some  of  the  authorities  maintain  that  parol  evidence  is 
inadmissible  to  control  the  construction  of  an  irregular  in- 
dorsement  as  against  bona  fide  purchasers  for  value ;  that 
such  evidence  is  only  admissible  as  between  immediate  par- 

1  Pearson  V.  Stoddard,  9  Gray,  199;  Rivers  v.  Thomas,  1  B.  J.  Lea, 
649;  Clapp  w.  Rice,  13  Gray,  403;  Cady  u.  Shepard,  13  Wis.  713;  Baker 
•y.  Scott,  5  Rich.  305;  Fegenbush  v.  Lang,  28  Pa.  St.  193;  Boyntou  r. 
Pierce,  79  111.  145;  Sill  v.  Leslie,  16  Ind.  236;  Kealing  v.  Vansickle,  74 
Ind.  529;  Sturtevant  v.  Randall,  53  Me.  149;  Jcuuings  v.  Thomas,  13 
Smed.  &  M.  617. 

2  McCelvy  V.  Noble,  12  Rich.  167. 

3  Watkins  v.  Kirkpatrick,  2  Dutch.  84. 
<  Wells  V.  Jackson,  6  Blac'kf.  40. 

6  1  Daniel's  Negot.  Inst.,  §  711.     Butsee  Essex  Company  ??.  Edmunds, 
12  Gray,  273;  Kellogg  r.  Dunn,  2  Met.    (Ky.)  215;  Heath  v.  Van  Cott,  9 
Wis.  516;  Peckham  v.  Gilmau,  7  Minn.  446. 
460 


CH.  XIII.]  TRANSFER    BY    INDORSEMENT.  §    273 

ties  to  the  transaction.^  But  the  better  opinion  is  that,  in 
every  case  where  the  signature  on  the  back  is  in  an  ambigu- 
ous position,  and  the  meaning  can  only  be  definitely  ascer- 
tained by  parol  evidence,  then  parol  evidence  is  admissible 
to  prove  its  true  character,  even  against  a  purchaser  for 
value,  for  he  can  reasonably  be  charged  with  notice  of  this 
ambiguity.'^ 

§  273.  Liiiuitations  upon  admissibility  of  parol  evi- 
dence  in  respect  to  irregular  indorsements. — For  the 

reason  that  parol  evidence  is  '  admissible  only  to  explain 
away  the  ambiguities  of  a  written  instrument,  as  soon  as  the 
ambiguity  is  disposed  of  or  dissipated,  parol  evidence  ceases 
to  be  admissible  to  control  the  terms  and  character  of  the 
contract.  Thus  it  has  been  held  that  proof  of  the  fact  that 
the  indorsement  was  made  before  the  delivery  of  the  paper 
to  the  payee,  fixes  the  liability  of  the  irregular  indorser  as 
that  of  joint  maker,  and  parol  evidence  is  inadmissible  to 
show  a-different  intention.^     Other  cases  hold  that  the  in- 

*  Houston  w.  Bruner,  39  Ind.  383;  Browning  u.  Merritt,  61  Ind.  425; 
Schneider  v.  Sclaiffman,  20  Mo.  571.  In  Missouri  it  is  also  held  to  be 
admissible  against  an  indorsee  after  maturity.  Seymour  v.  Farrell,  51 
Mo.  95. 

2  Greenough  v.  Smead,  3  Ohio  St.  415;  Thacher  v.  Stevens,  46  Conn. 
561  (inf erentially) .  See  Rey  v.  Simpson,  22  How.  341;  Good  v.  Martin, 
95  U.  S.  95;  Cavazoo  v.  Trevino,  G  Wall  773;  Frank  v.  Lllienf eld,  33 
Gratt.  392;  Denton  v.  Peters,  5  Q.  B.  L.  R.  475. 

3  Way  y.  Butterworth,  108  Mass.  512,  Ames,  J.,  saying:  "If  A.  F. 
Butterworth  signed  his  name  upon  the  back  of  the  note  at  the  time  when 
it  was  made,  or  at  any  time  before  it  was  delivered  as  a  valid  and  bind- 
ing contract  to  Manuel,  he  must  be  considered  as  an  original  promisor, 
and  parol  evidence  would  not  be  admissible  to  show  tliat  such  was  not 
his  real  contract.  Bank  v.  Willis,  4  Met.  504;  Brown  v.  Butler,  99  Mass. 
179.  In  favor  of  a  bona  fide  liolder,  it  is  presumed  that  the  promise  of 
such  an  indorser  was  made  at  the  same  time  with  the  note.  This,  how- 
ever, is  not  a  conclusive  presumption.  This  defendant  would  have  a 
right  to  show  that  the  fact  was  otherwise,  and  that  his  contract  was  not 
madd  until  after  the  note  had  taken  effect  as  a  binding  contract;  and  if 
he  should  succeed  in  proving  it  to  be  so,  he  might  either  not  be  charge- 

461 


<§     27.-)  TRANSFER    IJV    INDORSEMENT.  [CH.   XIII. 

duivr^ciuciit  hoforc  the  payee,  only  excludes  the  liability  of  an 
iudoisor,  and  it  may  be  shown  b}''  parol  evidence  Avhether  the 
party  so  signing  intended  to  be  bound  as  a  joint  promisor 
or  as  a  guarantor.^ 

But  if  the  name  were  signed  subsequent  to  the  indorse- 
ment of  the  pa\'cc,  then  the  idea  of  the  party  signing  being 
a  joint  maker  is  excluded,  and  parol  evidence  is  admissible 
only  to  show  whether  the  liability  was  intended  to  be  that 
of  an  iudorser  or  of  a  guarantor.^     Finally,  if  the  part}',  in 

able  as  surety  or  guarantor,  according  to  the  facts  proved,  Wright  v. 
Morse,  9  Gray,  337.  If  he  placed  his  name  in  blank  upon  the  back  of  the 
note  after  it  was  given,  he  could  not  be  held  as  an  original  promisor- 
McCorney  v.  Stanley, 8  Cush.  85;  Courtney  u.  Doyle,  10  Allen,  122.'.'  See 
also  Good  V.  Martin,  95  U.  S.  94,-  Essex  Co.  v.  Edmunds,  12  Gray,  273; 
Bigelow  V.  Colton,  13  Gray,  309;  Lakcf.  Stetson,  13  Gray,  310;  Pearson 
V.  Stoddard,  9  Gray,  199;  Cliaddock  v.  Vanness,  35  N.  J.  L.  518;  Com- 
monwealth V.  Powell,  11  Gratt.  828;  Good  v.  Martin,  1  Col.  165.  But  see 
Irish  V.  Cutler,  31  Me.  536;  Hall  v.  Ncwcomb,  7  Hill,  416;  Price  v.  Lav- 
ender, 33  Ala.  390;  Schneider  v.  Schiffman,  20  Mo.  571. 

1  Greenough  v.  Smead,  3  Ohio  St.  415;  Quin  v.  Sterne,  26  Ga.  223; 
Mathewson  v.  Sprague,  1  R.  I.  8;  Perkins  v.  Barstow,  6  R.  I.  595;  Manuf. 
Bank  v.  ToUctt,  11  R.  I.  92;  Carpenter  v.  McLaughlin,  12  R.  I.  270; 
Brinkley  v.  Boyd,  9  Heisk.  149.  But  see  contra,  Price  v.  Lavender,  38 
Ala.  3'JO;  Kamni  v.  Holland,  2  Oreg.  59;  Clonston  v.  Barbiere,  4  Sneed, 
338;  Wells  v.  Jackson,  6  Blackf.  43;  Dore  v.  Hurst,  13  Ind.  554;  Sill  v. 
Leslie,  16  Ind.  236;  Dale  v.  Moffitt,  22  Ind.  114;  Roberts  v.  Masters,  40 
Ind.  462;  Coniparree  v.  Brockway,  11  Humph.  358;  Jennings  v.  Tlioraas, 
13  Suied.  &  Mi  617.  In  these  cases,  such  a  person's  liability  is  held  to 
he  jmma  facie,  that  of  an  indorser. 

-  Rey  V.  Simpson,  22  How.  241;  Good  v.  Martin,  95  U.  S.  95;  Irish  v. 
Cutter,  31  Me.  536;  Benthall  v.  Judkins,  13  Met.  265.  In  Rey  v.  Simp- 
son, supra,  the  court  made  the  following  full  statement  of  their  view  of 
the  whole  subject:  "  When  a  promissory  note,  made  payable  to  a  par- 
ticular person  or  order,  as  in  this  case,  is  first  indorsed  by  a  third  per- 
son, such  third  person  is  held  to  be  an  original  promisor,  guarantor,  or 
indorser,  according  to  the  nature  of  the  transaction,  and  the  understand- 
ing of  the  parties  at  the  time  the  transaction  took  place. 

"  I.  If  he  put  his  name  on  the  back  of  the  note  at  the  time  it  was  made 
as  sui-ety  for  the  maker  and  for  his  accommodation,  to  give  him  credit 
with  the  payee,  or  if  he  participated  in  the  consideration  for  whicli  the 
note  was  given,  he  must  be  considered  as  a  joint  maker  of  the  note. 

"  II.  On  the  other  hand,  if  his  indorsement  was  subsequent  to  the 
4G2 


CH,  XIII.]  TRANSFER    BY    INDORSEMENT.  §    274 

writing  his  name  on  the  back  of  a  commercial  instrument, 
expressly  designates  the  character  of  his  signature,  such 
as  "  indorser,"  "  guarantor,"  and  the  like,  parol  evidence  is 
inadmissible  for  any  purpose,  since  the  express  description 
removes  the  ambiguity,  and  leaves  nothing  to  explain.^ 

§  274.  Admissibility  of  parol  evidence  in  respect  to 
iudorsenieuts  in  general.  — The  common  rule  of  evidence, 
that  parol  evidence  is  inadmissible  to  vary  or  contradict  a 
written  instrument  of  indebtedness  or  of  conveyance,  ap- 
plies generally  to  indorsements,  which  are  regular  and  un- 
ambiguous. It  has  been  already  shown  ^  that  ambiguous  or 
irregular  indorsements  may  be  explained  with  the  aid  of  parol 
evidence,  and  shown  to  be  a  surety,  guaranty  or  indorse- 
ment, according  to  the  established  intention  of  the  party 
signing.  But  if  an  indorsement  is  regular,  i.e.  it  consti- 
tutes a  lirik  in  the  successive  transfer  of  the  paper  from 
the  pavee  to  the  present  holder,  parol  evidence  is  not  ad- 
missible to  show  that  the  party  indorsing  in  this  manner 

making  of  the  note,  aud  he"  put  his  name  there  at  the  request  of  the 
malier,  pursuant  to  a  contract  with  the  payee  for  further  indulgence  or 
forbearance,  he  can  only  be  held  as  a  guarantor. 

"  III.  But  if  the  note  was  intended  for  discount,  aud  he  put  his  name 
ou  the  back  of  it  with  the  understanding  of  all  the  pai'ties  that  his  in- 
dorsement would  be  inoperative  until  it  was  indorsed  by  the  payee,  he 
would  then  be  liable  only  as  a  second  indorser  in  the  commercial  sense, 
aud  as  such  would  be  clearly  entitled  to  the  privileges  which  belong  to 
such  indorsers."  See,  also,  in  conformity  with  par.  Ill  of  the  in-eceding 
quotation,  Kayser  v.  Hull,  85  111.  513;  Blatchford  v.  Milliken,35  111.  434. 
In  Kentucky  it  has  been  held  that  proof  of  intention  is  confined  to  the 
question  whether  the  party  intended  to  assume  the  liability  of  an 
indorser  or  guarantor.     Kellogg  v.  Dunn,  2  Met    (Ky.)  215. 

■  Tinker  v.  McCauley,  3  Mich.  188,  overruling  Higgius  v.  Watson,  1 
Mich.  428;  Whitehouse  v.  Hanson,  42  N.  H.  9;  Callaway  v.  Harold,  61 
Ga.  11] ;  Pinnes  v.  Ely,  4  McLean,  173.  In  Kamm  v.  Holland,  2  Oreg.  59, 
one  signing  "A.  B.  security"  was  held  to  be  an  indorser,  and  not  a 
maker  or  guarantor. 

2  §§  272,  273 

463 


§    274  TRANSFER    BY    INDORSEMENT.  [cil.   XIII. 

intended  to  become  hound  as  joint-maker,  guarantor,  or 
in  any  other  character  than  as  indorser.^  Nor  is  it  possi- 
ble by  parol  evidence  to  vary  or  limit  the  liability  of  the  in- 
dorser  beyond  what  h  expressed  in  the  indorsement.  Thus, 
it  is  not  admissible  to  show  by  parol  evidence  that  the  iu- 
dorser  intended  to  make  the  indorsement  "  without  re- 
course" us  to  him.''  It  is  also  incompetent  to  show  by  parol 
evidence  that  the  liability  on  the  indorsement  was  made  con- 
ditional in  any  other  way,  or  different  from  the  ordinary 
liability  of  an  indorser.^     But  while  it  is  the  general  rule 

'  Howe  V.  Merrill,  5  Cush.  80;  Hamburger  v.  Miller,  48  Md.  327;  Ful- 
ler V.  McDonald,  8  Greeul.  213;  Dibble  v.  Duncan,  2  McLean,  353;  Hauer 
V.  Patterson,  84  Pa.  St.  275;  Barnard  v.  Guslin,  23  Minn.  194;  Finley  v. 
Green,  85  111.  536. 

2  Martin  v.  Cole,  104  U.  S.  30;  s.  c.  3  Col.  113;  Brown  v.  Spofford,  95 
U.  S.  483;  Jones  v.  Albee,  70  HI.  37 ;  Skeltou  v.  Dustin,  92  III.  49;  Court- 
ney V.  Ilogan,  93  111.  101;  Rodney  v.  Wilson,  67  Mo.  123;  Lewis  v.  Dun- 
lap,  72  Mo.  178;  Fuller  r.  McDonald,  8  Greenl.213;  Crocker  t).  Getchell, 
23  Me.  392;  Barry  v.  Morse,  3  N=  H.  132;  Charles  v.  Denis,  42  Wis.  56; 
Eaton  u,  McMahou,  42  Wis.  487;  Dale  «.  Gear,  38  Conn.  15;  s.c.  39  Conn. 
89;  Bank  of  U.  S.  v.  Dunn,  6  Pet.  51;  WiLson  v.  Black,  6  Blackf.  509; 
Skinner  v.  Church,  36  Iowa,  91 ;  Am.  Emigrant  Co.  v.  Clark,  47  Iowa, 
G71;  Campbell  v.  Bobbins,  29  Ind.  271;  Doolittle  v.  Ferry,  20  Kan.  230; 
Kern  v.  Von  Phul,  7  Minn.  426;  Woodward  v.  Foster,  18  Gratt.  205.  As 
against  a  subsequent  holder  for  value,  it  cannot  be  shown  that  the  in- 
dorsee agreed  to  write  the  words  "  without  recourse  "  over  the  indorser's 
signature.  Lewis  v.  Dunlap,  72  Mo.  174.  And  in  Indiana  it  has  been 
held  to  be  inadmissible,  even  as  between  the  immediate  parties,  to  show 
by  parol  evidence  that  the  words  "  without  recourse  "  were  omitted  by 
mistake.  Lee  v.  Pile,  37  Ind.  107.  But  it  is  admissible  to  show  a  con- 
temporaneous written  agreement  that  the  indorsement  should  be  without 
recov.rse.  Davis  v.  Bro^^-n,  94  U.  S.  423.  And  if  a  note  was  intended  to 
be  indorsed  "  without  recourse,"  and  these  words  were  omitted  by  mis- 
take, but  afterwards  added  by  consent,  it  is  proper  to  show  by  parol  all 
t'.iese  facts,  and  further  .that  the  words  were  subsequently  stricken  out. 
Beal  V.  Wood,  5  Mo.  App.  591. 

3  That  the  signature  was  put  on  the  paper,  merely  to  identify  the 
holder.  Prescott  Bank  v.  Caverly,  7  Gray,  217;  Stack  v.  Beach,  74  Ind. 
571.  That  the  liability  was  to  depend  upon  the  s.ale  of  certain  estates. 
Free  V.  Hawkins,  8  Taunt.  92;  Holt,  5.")0;  1  Moore,  535.  See  generally 
Johnson  v.  Rara.sey,  14  Vroom,  279;    Gist  v.  Drakeley,  2  Gill,  330;  Sny- 

464 


CH.  XIII.]  TRANSFER    BY    INDORSEMENT.  §    274 

that  parol  evidence  is  inadmissible  to  explain  away  or  vary 
a  commercial  instrument,  there  are  a  few  exceptions  to  the 
rule.  The  exceptions  are,  principally,  of  three  classes. 
Firsti  it  is  ahvaj^s  competent  to  show  by  parol  evidence 
that  the  indorsement  was  made  without  consideration,  as, 
for  example,  that  it  was  made  for  the  accommodation  of  the 
indorsee.^  Secondly,  it  may  be  shown  that  the  indorse- 
ment was  made  in  trust  to  the  indorsee,  for  the  purpose  of 
carrying  out  some  purpose  of  the  indorser,  as  his  agent,  or 
as  a  trustee.  Thus,  for  example,  it  can  be  shown  that  the 
indorsement  was  made  "  for  collection  "  only,^  as  an  escrow 

der  V.  Oatman,  16  IlL  265;  Beattie  v.  Browne,  64  111.  360;  Day  v,  Thomp- 
son, 65  Ala.  269;  Bartlett  v.  Lee,  33  Ga.  491;  Holton  v.  McCormick,  45 
Ga.  411;  Eoberts  v.  Master,  40  Ga.  461;  Preston  V.Ellington,  74  Ala.  133; 
Doolittle  V.  Ferry,  20  Kan.  230;  Bai-uard  v.  Goslin,  23  Minn.  192;  Schnell 
V.  Northside  Mill  Co.,  89  111.  581;  Skelton  v.  Dustin,  92  111.  49;  Crocker 
V.  Getchell,  23  Me.  392;  Woodward  v,  Foster,  18  Gratt.  200;  Charles  v. 
Denis,  42  Wis.  56;  Barry  v.  Morse,  3  N.  H.  132. 

1  Breneman  v.  Furniss,  90  Pa.  St.  186;  Hamburger  v.  Miller,  48  Md. 
325;  Morris  v.  Faurot,  21  Ohio  St.  155;  Cole  v.  Smith,  29  La.  Ann.  551; 
Davis  V.  Morgan,  64  N.  C.  570;  Lovejoy  v.  Citizens'  Bank,  23  Kan.  331; 
Kirkham  v.  Boston,  67  111.  599  ;  McCoon  v.  Biggs,  2  Hill,  121 ;  Denniston?;. 
Bacon,  10  Johns.  198;  Foster  v.  Jolly,  1  C.  M.  &R.  703.  Subsequent  failure 
of  consideration  may  be  shown  by  parol  evidence,  as  well  as  by  an  original 
want  of  consideration.  Smith  v.  Carter,  25  Wis.  283.  So  can  partial  fail- 
ure or  want  of  consideration  be  proved  by  parol  evidence.  Cook  v.  Cock- 
riil,  1  Stew.  (Ala.)  475.  It  can  also  be  shown  that  the  consideration  was 
certain  payments  to  be  made  by  the  indorsee,  the  liability  on  the  indorse- 
ment being  conditional  upon  making  these  payments.  Scammon  v.  Adams, 
11  111.  575;  Wood  v.  Matthews,  73  Mo.  477. 

2  Lawrence  v.  Stonington  Bank,  6  Conn.  521 ;  Dale  v.  Gear,  38  Conn. 
15;  39  Conn.  89;  Lewis  u.  Dunlap,  72  Mo.  178;  Smith  v.  Childress,  27 
Ark.  328;  Ricketts  «.  Pendleton,  14  Md.  320;  Hamburger  u.  Miller,  48 
Ind.  325;  Hill  v.  Ely,  5  Serg.  &  R.  363;  Mauley  v.  Boycott,  2  El.  &  Bla. 
(75  E.  C.  L.  R.)  46 ;  Martin  v.  Cole,  3  Col.  1 14 ;  Downer  v.  Cheesbrough, 
36  Conn.  39.  I^utsee  Chaddock  v.  Vanness,  6  Vroom,  521 ;  Johnson  v. 
Ramsey,  14  Vroom,  279.  But  it  is  not  possible,  on  the  other  hand,  to 
show  by  parol  evidence  that  an  indorsement,  expressed  to  be  "for 
collection,"  was  intended  to  pass  title.  White  v.  Miners'  Nat.  Bank,  102 
U.  S.  658;  Leary  v.  Blanchard,  48  Me.  268;  First  Nat.  Bank  v.  McCann, 
4  Bradw.  250;  Armour  Bkg.  Co.,  v.  Riley  Co.  Bank,  30  Kan.  163;  Rock 

30  465 


§    274  TRANSFER   BY   INDORSEMENT.  [CH.  XIII. 

upon  an  express  condition  not  yet  performed,^  or  to  enable  a 
transfer  for  any  other  special  purpose.^  In  all  these  cases, 
there  is  in  fact  an  absence  of  consideration,  which  alone 
would  avoid  the  liability  of  an  indorser.  Thirdly^  it  may 
always  be  shown  by  parol  evidence,  that  the  indorsement 
was  procured  by  fraud,^  accident  or  mistake. 

Whether  parol  evidence  is  admissible  to  prove  an  agree- 
ment to  waive  demand  and  notice  of  non-payment,  has 
been  decided  both  in  the  affirmative,*  and  in  the  negative.^ 

Co.  Bank  v.  Hollister,  21  Minii.  385;  Third  Nat.  Bank  v.  Clark,  23  Minn 
263. 

1  Chaddock  v.  Vanness,  35  N.  J.  L.  520;  Bell  u.  Lord  Ingestre,  12  Q. 
B.  (64  E.  C.  L.  R.)  317;  Go^gerty  w.  Guthbert,  2  B.  &  P.  N.  R.  170;  Wal- 
lis  V.  Little,  U  C.  B.  369;  Ricketts  w.  Pendleton,  14  Md.  820. 

2  Pollock  V.  Bradbury,  8  Moore  P.  C.  227 ;  Bell  v.  Lord  Ingestre,  12 
Q.B.  (64  E.  C.  L.  R.)  317;  Adams  v.  Jones,  12  Ad.  &  El.  455;  Dale  v. 
Gear,  38  Conn.  15;  Hamburger  v.  Miller,  48  Md.  325;  Scammon  v. 
Adams,  11  111.  578;  Chaddock  v.  Vanness,  35  N.  J.  L.  520;  Menderhall  v. 
Davis,  72  N.  C.  150;  Commissioners  Iredell  Co.  v.  Wasson,  82  N.  C.  308; 
Girard  Bank  p.  Comley,  2  Miles,  405;  Patterson  v.  Todd,  18  Pa.  St.  426; 
Patten  v.  Pearson,  57  Me.  428;  Lynch  v.  Goldsmith,  64  Ga.  42;  Hardy 
V.  White,  60  Ga.  455,  But  see  contra,  Lee  v.  Pile,  37  Ind.  107;  Dunn  v. 
Ghost,  5  Col.  134.  Parol  evidence  is  not  admissible  to  show  this  fact  in 
a  suit  by  a  bona  fide  holder.  Lewis  v.  Dunlap,  72  Mo.  174;  Stapler  v. 
Burns,  43  Ga.  382 ;  Meador  v.  Dollar  Sav.  Bank,  56  Ga.  605, 

3  Kirkham  v.  Boston,  67  111.  599;  Lewis  v.  Dunlap,  72  Mo.  178; 
Hamburger  v.  Miller,  48  Md.  325;  Hill  v.  Ely,  5  Serg.  &  R.  363;  Brene- 
raann  v.  Fumiss,  90  Pa,  St.  186. 

4  Dye^7.  Scott,  35  Ohio  St.  194;  Fuller  v.  McDonald,  8  Greenl.  213; 
Lane  ^7.  Steward,  20  Me.  98;  Boyd  v.  Cleveland,  4  Pick.  525;  Hazard  v. 
White,  26  Ark.  174;  Taylor  v.  French,  2  Lea,  260;  Barclay  v.  Weaver,  19 
Pa.  St.  396, 

5  Rodney  v.  Wilson,  67  Mo.  123;  Beeler  v.  Frost,  70  Mo.  1S6;  Kern  v. 
Von  Phul,  7  Minn,  74;  Hightower  v.  Ivy,  2  Port.  (Ala.)  308;  Barry  v. 
Morse,  3  N.  H.  132;  Bank  of  Albion  v.  Smith,  27  Barb.  489.  In  Davis  v. 
Gowen,  19  Me.  449,  it  was  held  that  there  could  be  no  waiver  of  demand 
by  parol  evidence. 

466 


CHAPTER    XIY. 

THE  RIGHTS  OF  BONA  FIDE  HOLDERS. 

Section  279.  General  statement. 

280.  What  defenses  will  prevail  against  bona  fide  holders. 

281.  Cases  of  forgery. 

282.  Instruments  void  for  want  of  delivery  by  maker  or  drawer. 

283.  Blank  instruments  intrusted  to   another  and  wrongfully 

filled  up. 

284.  Instruments  written  over  blank  signatures. 

285.  Instruments  executed  by  mistake  or  under  false  represen- 

tations. 

286.  Instruments  delivered  in  violation  of  instructions. 

287.  Negotiable  instruments  executed  under  duress. 

288.  Bona  fide  holders  protected  from  defenses  by  estoppel. 

289.  What  is  meant  by  bona  fides. 

290.  Valuable  consideration  must  be  paid  bona  fide  holder. 

291.  When  price  conveys  notice  of  fraud. 

292.  Indorsement  for  less  than  face  value,  when  usurious. 

293.  The  amount  of  recovery  against  maker  and  indorser. 

294.  Usual  course  of  business. 
-  295.  Before  and  after  maturity. 

296.  Instruments  payable  on  demand,  or  at  sight,  when  over- 

due. 

297.  Transfer  when  installment  of  principal  or  interest  is  over- 

due. 

298.  Transfer  on  last  day  of  grace. 

299.  Purchaser  without  notice. 
800.  Actual  and  constructive  notice. 

301.  Constructive  notice  in  respect  to  accomodation  paper. 

302.  Lis  pendens  —  Garnishment  and  trustee  process — Pulalic 

records. 

303.  Burden  of  proof  as  to  bona  fide  ownership. 

304.  The  rights  and  powers  of  pledgees  of  commercial  paper. 

305.  Bona  fide  holders  of  commercial  paper  secured  by  mort- 

gage. 

§   279.     General    statement. — The    peculiarity  of  the 
rights    of  the  bona  fide  holder    is  what  in  the  main  distin- 

467 


§    280  TllK    UIGHTS    OK    JiOXA    TIDE    HOLDERS.       [cil.   \IV . 

guishes  negotiable  from  iioii-negotiable  instruments,  and 
what  makes  the  negotiable  instrument  so  valuable  an  aid  to 
exchange.  This  peculiarity  consists  in  a  protection  of  the 
6o7ia^tZe  holder  against  the  ordinary  defenses,  which  would 
prevent  recovery  on  the  instrument,  if  the  action  were 
brought  by  any  one  else.  The  general  rule  may  be  stated 
thus:  A  holder  of  negotiable  paper,  who  has  taken  it  (1) 
bonajide,  (2)  without  notice  of  dishonor  and  of  existing 
defenses,  (3)  for  a  valuable  consideration,  (4)  in  the  usual 
course  of  business,  (5)  and  before  maturity,  can  recover 
on  the  paper,  and  is  not  subject  to  the  defenses  which  do 
not  appear  on  the  face  of  the  paper,  which  might  be  set  up 
against  the  original  payee,  or  a  subsequent  holder,  not  a 
bona  fide  holder. 

§  280.  What  defenses  will  prevail  against  bona  fide 
holders.  —  It  is  usually  stated  that  the  bona  fide  holder 
takes  the  negotiable  paper  free  from  all  equitable  defenses, 
meaning  thereby  those  defenses,  which  do  not  appear  on 
the  face  of  the  paper,  and  which  do  not  absolutely  destroy 
the  existence  of  the  paper  as  a  monetary  obligation.  For 
example,  the  bona  fide  holder  can  enforce  a  negotiable  in- 
strument, although  it  was  obtained  without  consideration ;  ^ 
or  on  an  illegal  consideration,  unless  the  instrument,  based 
upon  the  illegal  consideration,  is  expressly  declared  by 
statute  to  be  void ;  ^  where  the  instrument  was  origin^ 
ally     obtained    through     fraud,    theft    or    robbery;  ^   or 


1  See  ante,  §  154. 

2  See  ante,  §  178. 

3  See  Hobart  v.  Penny,  70  Me.  248;  Burrill  v.  Parsons,  71  Me.  282; 
Taylor  v.  Bowles,  28  La.  285;  Ogden  v.  Marchand,  29  La.  Ann.  61;  Kin- 
yon  V.  Wohlford,  17  Minn.  240;  Goodman  v.  Simonds,  20  How.  343; 
Brown  t?.  Spofford,  95  U.  S.  481;  Belmont  Branch  Bank  v.  Hoge,  35  N.  Y. 
65;  Central  Bank  v.  Ilaramett,  50  N.  Y.  159;  Johnson  v.  Way,  27  Ohio  St. 
274;  Franklin  Sav.  Bank  v.  Heusraan,  1  Mo.  App.  336;  Selser  v.  Brock,  3 
Ohio  St.  302;  Farmers',  etc.,   Bank  v.  Lucas,  26  Ohio  St.  385;  Anderson 

468 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    280 

where  it  was  subsequently  released,^  or  paid  before  ma- 
turity.^ 

But  there  are  some  defenses,  which  can  defeat  recovery 
on  a  negotiable  instrument  by  a  bona  fide  holder,  as  well  as 
by  the  original  payee.  They  are,  generally,  of  such  a  na- 
ture as  to  make  the  instrument  absolutely  void,  instead  of 
voidable.     They  will  now  be  presented  somewhat  in  detail. 

If  a  statute  pronounces  a  commercial  instrument  abso- 
lutely void,  on  account  of  the  illegality  of  the  considera- 
tion, the  instrument  is  not  even  good  in  the  hands  of  an 
innocent  purchaser  for  value. ^  If  the  maker  or  other 
primary  obligor  of  the  instrument  is  incapacitated,  on  ac- 
count of  infancy,  coverture,  or  insanity,  from  executing 
the  instrument,  it  is  void  in  the  hands  of  a  bona  fide  holder.* 
In  this  country  all  corporations,  which  can  contract  debts, 
are  held  to  have  the  power  to  issue  bills  and  notes  in  the 
ordinary  course  of  its  business ;  ^  and  although  the  defense 
of  ultra  vires  is  good  against  the  original  payee,  it  cannot 
avail   against   a   bona  fide  holder,  unless   the  corporation, 

V.  Warne,  71  111.  20;  Wayne,  etc.,  Co.  v.  Cardwell,  73  Ind.  555;  Robinson 
V.  Reynolds,  2  Q.  B.  196;  Craig  v.  Sibbett,  15  Pa.  St.  238;  Tliiedemanu  v. 
Goldschmidt,  1  De  G.  F.  &  J.  4;  Smith  v.  Hiscock,  U  Me.  449;  Sturges 
V.  Miller,  80  111.  241. 

1  Schoer  v.  Eoughliu,  50  Cal.  528;  Palmer  v.  Marshall,  60  111.  289. 

2  Swall  V.  Clarke,  51  Cal.  227.  If  paid  at  maturity  to  the  one  then 
holding  the  paper,  any  subsequent  holder  or  purchaser  could  not  claim 
to  be  a  bona  fide  holder.  Gordon  v.  Wansey,  21  Cal.  77;  Gardner  v.  May- 
nard,  7  Allen,  456. 

3  Ramsdell  v.  Morgan,  16  Wend.  574;  To^ti  of  Eagle  v.  Kohu,  84  111. 
292;  Hatch  v.  Burrouglis,  1  Woods,  439;  Taylor  v.  Beck,  3  Rand.  31G; 
Aurora  v.  West,  22  lud.  88 ;  Hall  u.  Wilson,  IG  Barb.  548 ;  Vallet  v.  Parker, 
6  Wend.  615;  Bayley  v.  Tabor,  5  Mass.  286.  See  also  ante,  §  178.  But 
the  bona  fide  holder  is  entitled  to  recover,  if  the  statute  does  not  declare 
the  instrument  void.  Williams  v.  Cheny,  3  Gray,  215;  Hubbard  v.  Chapin, 
2  Allen,  328.     See  ante,  §  178. 

^  See  ante,  chapter  IV.,  on  Persons  Incapacitated  to  become  Parlies 
to  Commercial  Paper. 
5  See  ante,  §  115. 

4G9 


§    282  THE    KIGIITS    OF    BONA    FIDE    HOLDERS.        [CH.  XIV. 

which  executes  the  paper,  is  not  authorized  in  any  ease  to 
issue  commercial  i)aper.^ 

The  other  cases  of  defenses  which  avail  against  the  bona 
fide  holder,  are  those  in  which,  under  varying  circum- 
stances, the  consent  of  the  primary  obligors  to  the  negotia- 
tion of  the  instrument  is  wanting. 

§  281.  Cases  of  forgery. — If  the  maker  or  drawer,  or 
acceptor,  has  never  executed  the  instrument,  as  when  the 
signature  or  signatures  are  forged,  or  the  instrument  has 
been  altered  in  some  material  part  after  signing,  the  origi- 
nal parties  are  not  bound  on  the  instrument  in  the  hands  of 
bona  fide  holder. ^  The  reason  for  this  is  plain.  The  in- 
strument is  not  the  contract  of  the  parties  whose  names 
appeared  to  be  signed  to  it. 

§  282.  Instruments  void  for  want  of  delivery  by  maker 
or  drawer.  —  Delivery  of  a  negotiable  instrument  is  essen- 
tial in  order  to  create  any  liability  as  between  the  imme- 
diate parties  to  the  instrument.^  But  the  authorities  are 
not  agreed,  whether  a  bona  fide  holder  can  recover  on  an 
instrument  that  has  been  taken  away  from  the  maker  Avith- 
out  his  consent ;  which  in  other  words  has  never  been  de- 
livered by  him  to  any  one  for  any  purpose.  Some  of  the 
cases  hold  that  the  maker  or  drawer  is  not  liable  in  any  such 
case,  whether  completed  or  uncompleted,  unless  it  can  be 
shown  that  possession  of  the  undelivered  instrument  has  been 
obtained  through  his  culpable  negligence.*     But  it  has  been 

1  See  ante,  §  116. 

2  See  post,  chapter  on  Fogeries  and  Alterations. 

3  See  ante,  §§  34-34d. 

*  Burson  v.  Huntington,  21  Mich.  415;  Hall  v.  Wilson,  16  Barb.  556, 
Allen,  J,,  saying:  "The  note  never  had  any  inception  so  as  to  enable 
any  person  to  become  a  bona  fide  holder  of  it.  It  was  an  imperfect  in- 
strument, wanting  delivery  to  give  it  validity  as  the  promissory  note  of 
the  defendant.  The  holder  has  taken  a  blank  piece  of  paper,  not  a 
470 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    282 

held  to  be  negligence  for  one  to  sign  and  otherwise  complete 
a  negotiable  instrument  before  the  time  appointed  for  deliv- 
ery, and  to  lay  it  away  in  some  drawer  or  box,  although  se- 
cured by  key  and  bolt.  If  such  an  instrument,  completed 
and  requiring  only  delivery  to  the  payee,  is  stolen,  and 
finally  passes  into  the  hands  of  a  bona  fide  holder,^  it  is 
held  in  these  cases  that  the  maker  would  be  liable  to  the 
bona  iide  holder. ^ 

But  it  is  conceded,  even  by  those  who  advocate  the  right 
of  the  bona  fide  holder  to  recover,  where  a  completed 
negotiable  instrument  has  been  stolen  and  transferred  to 
him  in  good  faith,  that  the  bona  -fide  holder  gets  no  title  or 
claim  against  the  maker,  where  the  stolen  instrument  was 
incomplete,  and  was  afterwards  filled  up.^    The  authorities 

promissory  note."  This  case  was  confirmed  in  Eastman  v.  Shaw,  65  N. 
Y.  522,  by  Dwight,  C.     But  see  contra,  Gould  v.  Segee,  5  Duer,  270. 

*  If  it  is  payable  to  order,  it  must  be  indorsed  by  the  payee,  in  order 
to  enable  the  purchaser  to  be  a  bonajide  holder. 

2  Kinyon  v.  Wohlford,  17  Minn.  239;  Shipley  v.  Carroll,  45  111.  285; 
"Worcester  Co.  Bank  v.  Dorchester,  etc.,  Bank,  10  Cush.  488;  Salander  v. 
Lockwood,  66  Ind.  285;  Clarke  v.  Johnson,  54  111.  296.  In  the  last  case 
the  note  was  signed  and  otherwise  completed,  except  that  he  was  about 
to  insert  a  condition  that  it  should  not  be  valid,  unless  the  plows,  which 
constituted  the  consideration,  were  delivered.  But  before  he  could  add 
this  condition,  the  payee  snatched  it  out  of  his  hand,  ran  off,  and  sold 
the  note  to  a  bona  fide  holder.  Mr.  Parsons  says :  ''  If  a  person  signs 
notes  in  blank,  and  locks  them  up  in  his  safe,  whence  they  are  stolen, 
filled  up  and  negotiated,  without  fault  or  negligence  on  his  part,  he  is 
not  liable.  Possibly  it  might  be  held  otherwise,  if  he  make  and  sign  a 
perfect  note,  payable  to  bearer,  and  it  be  stolen  under  similar  circum- 
stances; on  the  ground  that,  when  the  instrument  is  once  perfected 
(although  it  has  never  passed  out  of  the  maker's  hand  and  consequently 
has  no  inception  as  a  contract)  it  is  like  money ;  and  any  one  who 
receives  it  in  good  faith,  and  for  a  valuable  consideration,  acquires  a 
perfect  title."     1  Parsons'  N.  &  B.  114. 

3  "The  second  class  of  cases  arises  when  an  incomplete  instrument 
has  been  signed  and  stolen,  without  any  delivery  to  an  agent  in  trust,  or 
otherwise,  intervening.  In  such  cases,  no  trust  for  any  purpose  has 
been  created.  No  instrument  has  been  perfected.  No  appearance  of 
validity  has  been  given  it.     No  negligence  can  be  imputed.     Therefore, 

471 


§    2S2  THE    RIGHTS    OF    BONA    FIDE    HOLDERS.        [CH.   XIV. 

are  unauiraous  that  the  bona  fide  holder  gets  nothing  by  a 
transfer  to  him  of  an  incomplete  instrument,  which  has 
been  stolen  from  the  maker. ^  But  I  am  satisfied  that  the 
position  of  the  New  York  courts  is  correct  in  denying 
validity  to  all  negotiable  instruments,  which  have  been 
stolen,  without  any  fault  on  the  part  of  the  maker,  whether 
they  were  complete  or  incomplete.  This  would  seem  to 
be  the  ruling  of  the  English  courts  also.^ 

if  the  blank  be  filled,  it  is  sheer  forgery,  in  which  the  maker  is  in  nowise 
involved,  and  he  is  not  therefore  bound,  even  to  a  bona  fide  holder  with- 
out notice."     1  Daniel's  Negot.  Inst.,  §  841. 

1  Ledwick  v.  McKim,  53  N.  ¥.315;  Eedlick  v.  Doll,  54  N.  Y.  236. 
Unless  the  case  of  Clark  v.  Johnson,  54  111.  296,  where  a  note  was 
snatched  out  of  the  maker's  hands,  before  he  could  insert  a  condition  in 
respect  to  his  liability  on  the  note,  be  considered  an  exception  to  the  gen- 
eral drift  of  the  authorities. 

2  Bazendale  v.  Bennett,  L.  R.  3  Q.  B.  D.  527;  s.  c.  47  L.  J.  Q.  B.  624; 
s.  c.  26  W.  R.  899;  33  Ann.  Rep.  137;  40  L.  T.  R.  23,  Br^rawcU,  L.  J., 
saying:  "The  defendant  is  sued  on  a  bill  alleged  to  have  been  drawn  by 
W.  Cartwright  on  and  accepted  by  him.  In  very  truth  he  never  accepted 
such  a  bill;  and  if  he  is  to  be  liable,  it  can  only  be  on  the  ground  that 
he  is  estopped  to  deny  that  he  did  so  accept  such  a  bill.  Estoppels  are 
odious,  and  the  doctrine  should  never  be  applied  without  a  necessity  for 
it.  It  never  can  be  applied  except  incases  where  the  person  against 
whom  it  is  used  has  so  conducted  himself,  either  in  what  he  has  said  or 
done,  or  failed  to  say  or  do,  that  he  would,  unless  estopped,  be  saying 
something  contrary  to  his  former  conduct  in  what  he  has  said  or  done 
or  failed  to  say  or  do.  Is  that  the  case  here?  Let  us  examine  the  facts. 
The  defendant  drew  a  bill  (or  what  would  be  a  bill  had  it  had  a  drawer's 
name)  without  a  drawer's  name,  addressed  to  himself,  and  then  wrote 
what  was  in  terms  an  acceptance  across  it.  In  this  condition  it,  not 
being  a  bill,  was  stolen  from  him,  filled  up  without  a  drawer's  name,  and 
transferred  to  the  plaintiff,  a  bona  fide  holder  for  value.  It  may  be  that 
no  crime  was  committed  in  the  filling  in  of  the  drawer's  name,  for  .the 
thief  may  have  taken  it  to  a  person  telling  him  it  was  given  by  the  defend- 
ant to  the  thief  with  authority  to  get  it  filled  in  with  a  drawer's  name  by 
any  person  he,  the  thief,  pleased.  This  may  have  been  believed,  and  the 
drawer's  name  bona  fide  put  by  such  person.  I  do  not  say  such  person 
could  have  recovered  on  the  bill.  I  am  of  the  opinion  that  he  could  not; 
but  what  I  wish  to  point  out  is,  that  the  bill  might  be  made  a  complete 
instrument  without  the  commission  of  any  crime  in  the  completion.  But 
a  crime  was  committed  in  this  case  by  the  stealing  of  the  document,  and 

472 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    283 

§  283.  Blank  instruments  intrusted  to  another,  and 
wrongfully  filled  up.  — If  one  should  execute  or  sign  com- 
mercial instruments  in  blank  and  deliver  them  to  an  asfent  to 
fill  up  the  blanks  in  accordance  with  the  specific  directions ; 
and  this  agent  should  fill  them  up  for  larger  amounts  or  on 
different  terms,  the  maker  would  be  bound  by  these  instru- 
ments as  filled,  if  they  should  come  into  the  hands  of  a 
bona  Jide  holder,  on  the  ground  that  having  reposed  confi- 
dence in  the  agent,  and  held  him  out  to  the  world  as 
worthy  of  confidence,  he  should  bear  the  loss  arising  from 
the  agent's  breach  of  trust  or  violation  of  instructions, 
rather  than  a   bona  fide  holder  for  value. ^     As  it  was  ex- 

Tvithout  that  crime  the  bill  could  not  have  been  complete,  and  no  one 
could  have  been  defrauded.  Why  is  not  the  defendant  at  liberty  to 
show  this?  "Why  is  he  estopped?  What  has  he  said  or  done  contrary  to 
truth,  or  which  should  cause  any  one  to  believe  the  truth  to  be  other  than 
it  is?  Is  it  not  a  rule  that  every  one  has  a  right  to  suppose  that  a  crime 
will  not  be  committed,  and  to  act  on  that  belief?  Where  is  the  limit  if 
the  defendant  is  estopped  here?  Suppose  he  had  signed  a  blank  check 
with  no  payee  or  date  or  amount,  and  it  was  stolen,  would  he  be  liable 
or  accountable,  not  merely  to  his  banker,  the  drawee,  but  to  a  hold- 
er? *  *  *  But  what  about  the  authorities?  It  must  be  admitted  the 
cases  of  Young  v.  Grote  (4  Bing.  253),  aud  Ingham  v.  Primrose,  (7  C.  B. 
(n.  s.)  82;  L.  J.  C.  B.  294),  go  along  way  to  justify  this  judgment;  but  in 
all  those  cases,  and  in  all  the  others  where  the  alleged  maker  or  acceptor 
has  been  held  liable,  he  has  voluntarily  parted  with  the  instrument,  it 
has  not  been  got  from  him  by  the  commission  of  a  crime.  This  undoubt- 
edly is  a  distinction,  aud  a  real  distinction.  The  defendant  here  has  not 
voluntarily  put  into  any  one's  hands  the  means,  or  jjart  of  the  means,  for 
committing  a  crime.  But  it  is  said  that  he  had  done  so  through  negli- 
gence. I  confess  I  think  he  has  been  negligent,  that  is  to  say,  I  think  if 
he  had  this  paper  from  a  third  person  as  a  bailee  bound  to  keep  it  with 
ordinary  care,  he  would  not  have  done  so.  But  then  this  negligence  is 
not  the  proximate  or  effective  cause  of  the  fraud.  A  crime  was  necessary 
for  its  completion." 

1  Violet  V.  Patton,  5  Cranch,  142;  Michigan  Bank  v.  Eldred,  9  Wall. 
548;  Redlich  v.  Doll,  54  N.  Y,  236;  Russell  v.  Langstaff,  2  Dougl.  514, 
Fullerton  v.  Sturgis,  4  Ohio  St.  529;  Orrick  v.  Colston,  7  Gratt.  189; 
Frank  v.  Lilieufeld,  33  Gratt.  285;  Diercks  v.  Roberts,  13  S.  C.  338; 
Powell  V.  Duff,  3  Camp.  182;  Schultz  v.  Astley,  29  E.  C.  L.  R.  414; 
Coburn  v.   Webb,  56  Ind.   96;  Mahoue  v.  Central  Bank,   17  Ga.   Ill; 

473 


§    283  THE    RIGHTS    OF    BONA    FIDE    HOLDERS.       [CII.  XIV. 

pressed  by  Lord  Mansfield,  "  the  indorsement  (signature) 
on  a  blank  note  is  a  letter  of  credit  for  an  indefinite  .sum."  ^ 
The  bona  fide  holder  can  recover,  although  the  amount 
was  increased  beyond  that  agreed  upon.-  So,  also,  where 
the  instrument  was  given  for  one  purpose  and  perverted  to 
another,^  or  was  to  be  filled  within  a  given  time,  and  the 
time  had  expired,*  or  the  date  was  filled  improperly.^  But 
in  every  case,  where  the  maker  is  held  to  be  bound  to  the 
bona  fide  ho\(\.ev  on  an  instrument  filled  up  by  an  agent  in 
violation  of  instructions,  it  will  be  found  that  the  additions 


Snyder  v.  Van  Doren,  46  Wis.  602;  Jones  v.  Shelbyville  Ins.  Co.,  1  Met. 
(Ky.)  58;  Ives  u.  Farraer.s'  Bank,  2  Allen,  236;  Androscoggin  Bank  v. 
Kimball,  10  Gush.  373;  Hardy  v.  Morton,  66  Barb.  527;  Joseph  v.  Nat. 
Bank,  17  Kan.  259;  Bank  of  Commonwealth  w.  Curry,  2  Dana,  142; 
Bank  of  Limestone  v.  Perrick,  5  T.  B.  Mon.  25;  Michigan  Ins.  Co.  v. 
Leavenworth,  30  Vt.  11;  Michal  v.  Bate,  10  Yerg.  429;  Waldron  »• 
Young,  9  Heisk.  777;  Rich  v.  Starbuck,  51  Ind.  87. 

^  Russell  t.  LangstafiEe,  2  Dougl.  514.  "  Where  a  party  to  a  negotia- 
ble instrument  intrusts  it  to  the  custody  of  another,  with  blanks  not 
filled  up,  whether  it  be  for  the  purpose  to  accommodate  the  person  to 
whom  it  was  intrusted,  or  to  be  used  for  his  own  benefit,  such  negotia- 
ble instrument  carries  on  its  face  an  implied  authority  to  fill  up  the 
blanks  and  perfect  the  instrument;  and  as  between  such  party  and  inno- 
cent third  parties,  the  person  to  whom  it  was  so  intrusted  must  be 
deemed  the  agent  of  the  party  who  committed  such  instrument  to  his 
custody  —  or,  in  other  words,  it  is  the  act  of  the  principal,  and  he  is 
bound  by  it."  Bank  of  Pittsburg  v.  Neal,  22  How.  107;  Davison  v. 
Lanier,  4  Wall.  4.-,7;  Angle  v.  N.  W.  Mutual  Life  Ins.  Co.,  92  U.  S.  3."0. 

2  Loudon  &  S.  W.  Bank  «.  Wcul  worth,  42  L.  T.  R.  188;  Dierck.s  v. 
Roberts,  13  S.  C.  388;  Rus.sell  v.  Langstaffe,  2  Doug.  514;  Fullerton  w. 
Sturgis,  4  Ohio  St.  529;  Yocum  v.  Smith,  63  111.321.  In  Schryver  p. 
Ilawkes,  22  Ohio  St.  £08,  the  buna  fide  holder  was  allowed  to  recover  the 
face  value  of  the  note,  where  the  maker  Imd  delivered  it  blank  as  to  the 
amount  to  be  paid,  except  that  the  amount  was  given  iu  marginal 
figuix's,  and  the  pcrsou  who  filled  the  blank,  changed  the  figures  to 
correspond  to  the  written  amount.  This  was  hold  not  to  be  such  a 
forgei*y,  as  to  free  the  maker  from  liability  to  the  bcnia  fide  holder. 

3  Putnam  v.  Sullivan,  4  Mass.  45;  Frank  v.  Lilienfeld,  33  Gratt.  384. 
^  Montague  r.  Perkins,  22  Eng.  L.  &  Eq.  516. 

'■>  Redlich  v.  Doll,   54  N.  Y.  238;   Page  v.  Morrell,  3  Abb,  App.  433; 
Overton  v.  MathcAVS,  .35  Ark.  154. 
474 


CH.  XIV.]       THE    RIGHTS    OF    BONA  FIDE  HOLDERS.  §    283 

or  insertions  made  by  the  agent  are  in  conformity  with  the 
apparent  character  and  object  of  the  blank.  A  bona  fide 
holder  cannot  recover  on  an  instrument  containing  unusual 
provisions  which  conflict  with  the  ordinary  parts  of  like 
instruments,  or  which  are  repugnant  to  its  object.  Indeed, 
the  holder  of  such  an  instrument  cannot  properly  be  called 
a  bona  fide  holder  ;  for  a  holder  is  charged  with  every  in- 
consistency or  defect  appearing  on  the  face  of  the  instru- 
ment.^ But,  of  course,  the  holder  must  have  taken  the 
instrument,  which  has  been  improperly  filled,  in  good  faith, 
without  notice  or  reasonable  suspicion  of  any  violation  of 
instructions,  and  for  a  valuable  consideration. ^ 

The  authorities  are,  however,  not  agreed  as  to  what  con- 
stitutes notice  of  a  want  of  authority  to  fill  the  blanks. 
Some  of  the  cases  maintain  that  if  the  holder  knows  that 
blanks  have  been  filled  up  by  an  agent,  he  is-charged  with 

1  "  But  the  authority  implied  from  the  existence  of  the  blanks  would 
not  authorize  the  person  intrusted  with  the  instrument  to  vary  or  alter 
the  material  terms  of  the  instrumeiit  by  erasing  what  is  written  or 
printed  as  part  of  the  same,  nor  pervert  the  meaning  and  scope  of  the 
same  by  filling  the  blanks  with  stipulations  repugnant  to  what  was 
plainly  and  clearly  expressed  in  the  instrument  before  it  was  so  de- 
livered." Angle  V.  N.  W.  Mut.  Ins.  Co.,  92  U.  S.  331.  See  also  Good- 
man V.  Simonds,  20  How.  361;  Bank  of  Pittsburg  v.  Neal,  22  How.  108; 
Ivory  V.  Michael,  33  Mo.  400;  McGrath  v.  Clark,  56  N.  Y.  36;  Coburn  v. 
Webb,  56  Ind.  100;  McCoy  v.  Lockwood,  71  Ind.  319. 

2  Davidson  v.  Lanier,  4  Wall.  456,  the  court  saying ;  "  The  delivery  of  a 
bill  of  exchange  signed  and  indorsed  iu  blank,  only  authorizes  the  receiver 
to  fill  it  up  In  conformity  with  the  authority  given  him.  If  there  has  been 
no  agreement,  the  authority  is  general;  if  there  has,  it  must  be  pursued. 
The  burden  of  proof  that  there  was  an  agreement  and  that  its  terms 
have  been  violated,  is,  in  such  a  case,  upon  the  defendant;  but  if  he  can 
make  the  proof  it  will  avail  him.  No  person,  unless  authorized,  either 
directly  or  by  just  inference  from  the  nature  of  the  transaction,  can  fill 
up  a  blank  bill  for  his  own  benefit,  nor  can  such  a  bill  be  enforced 
against  the  drawer,  and  indorser  against  any  one  who  takes  it  in  bad 
faith—  that  is,  with  knowledge  that  it  has  been  filled  up  without  author- 
ity or  in  fraud."  Johnson  v.  Blasdale,  1  Sraedes  &  M.  17;  Hemphill  v. 
Bank  of  Alabama,  6  Smedes  &  M.  44;  Hatch  v.  Searles,  2  Sm.  &  Gif.  147.. 

475 


§    284  THE    RIGHTS    OF    BONA    FIDE    HOLDERS.        [CH.  XIV. 

the  duty  of  inquiring  at  his  peril  into  the  limitations  of  the 
agent's  powers.^  But  the  better  opinion  would  seem  to  be 
that  he  is  permitted  to  presume  that  the  agent  has  not  ex- 
ceeded his  authority,  if  there  are  no  unusual  and  inconsis- 
tent provisions  in  the  instrument.^ 

§  284.   Instruments  written  oTer  blank  signatures.  — 

But  a  distinctio.n  should  be  drawn,  in  respect  to  the  rights 
of  bona  fide  holders,  between  instruments  in  blanks  given 
to  agents,  with  the  express  or  implied  authority  to  fill  them 
up,  and  instruments  written  out  in  full  by  an  agent  or  third 
person  over  a  signature,  which  has  been  written,  for  an 
altogether  different  purpose,  on  a  blank  piece  of  paper. 
Where  a  blank  instrument,  signed  by  one,  is  placed  into  the 
hands  of  another,  whether  with  or  without  authority  to  fill 
the  same  and  negotiate  it,  the  persons,  whose  names  are 
signed  thereto,  should  be  held  liable  to  a  bona  fide  holder, 
on  the  general  ground  that  the}'  have  reposed  confidence  in  the 
third  person  in  intrusting  the  blank  instrument  to  his  care, 
and  should  therefore  suffer  the  loss  flowing  from  his  breach 
of  trust.  But  where  one  has  merely  written  his  name  on  a 
blank  piece  of  paper,  —  it  matters  not  for  what  purpose  if 
it  be  not  for  the  purpose  of  signing  some  kind  of  contract,  — 
and  some  one  without  authority  writes  out  in  full  a  promis- 
sory note  over  his  signature,  there  is  no  room  for  the 
implication  of  any  authority  to  so  write  a  promissory  note; 
nor  can  he  be  charged  with  negligence  in  giving  his  blank 
signatures  to  another,  for  he  can  do  this  for  many  unobject- 

1  Van  Duzer  v.  Howe,  21  N.  Y.  531.  '"If  the  holder  has  notice  of  the 
imperfection  [that  the  signature  was  made  iu  bhuik]  he  can  ue  iu  no 
better  situation  than  the  person  who  gave  it  in  blank."  Iiatch  v. 
Searles,  2  Sm.   &  Gif .  147. 

2  Orrick  v.  Colston,  7  Gratt.  189;  Snyder  v.  Van  Doren,  4G  ^\is.  602; 
Huntington  v.  Branch  Bank,  3  Ala.  18G;  Story  on  Bills,  §  222;  1  larsous' 
N.  &  B.  109;  1  Daniel's  Negot.  Inst.,  §  147.  See  also  Angle  t  .  N.  W. 
Mut.  Ins.  Co.,  92  U.  S.  331;  McCoy  v.  Lockwood,  71  lud.  319. 

476 


CH.  XIV.]       THE    KIGHTS    OF    BONA    FIDE    HOLDERS.  §    284 

ionable  purposes  ;  as,  for  example,  to  enable  the  person 
receiving  it  to  identify  his  signature  on  valid  commercial 
paper.  In  all  such  cases  it  is  held  that  the  bona  fide 
holder  cannot  recover  of  the  persons,  whose  names  appear 
signed  to  the  instrument. ^  But  I  apprehend  that  the  party 
who  writes  his  name  for  some  other  purpose  than  to  execute 
a  contract,  is  guilty  of  negligence  if  he  writes  it  on  a  blank 
negotiable  instrument;  and  if  he  gives  the  same  to  another 
for  the  purpose  of  identifying  his  signature,  or  for  any 
other  lawful  purpose,  he  will  be  liable  thereon  to  a  bona  fide 
holder  for  any  amount  for  which  it  might  be  written  up.^ 

1  Nance  v.  Lary,  5  Ala.  370;  Caulkins  v.  Whistler,  29  Iowa,  495,  Beck, 
J.,  saying:  "  The  case  differs  materially  in  its  facts  from  the  case  cited 
in  support  of  plaintiff's  right  to  recover.  In  these  cases  blanks  were 
filled  up  contrary  to  the  direction  of  the  maker  or  without  his  authority. 
But  in  all  of  such  cases  the  makers  intended  to  execute  an  instrument 
which  should  be  binding  upon  them.  Blanks  were  filled  up  contrary  to 
the  authority  given  by  the  makers,  or  in  some  other  way  the  instruments 
were  made  so  that  they  did  not  correspond  with  the  intention  of  the 
makers ;  but  in  all  such  cases  there  were  makers  and  instruments,  and, 
through  the  frauds  of  those  to  whom  the  instruments  were  intrusted, 
they  were  thus  made  to  be  of  different  effect  than  was  designed  by  the 
makers.  In  these  cases  it  is  correctly  held,  that  while  the  parties  per- 
petrating the  fraud  in  some  cases  may  have  been  guilty  of  forgery,  yet 
the  makers  were  bound  upon  the  instruments  as  against  holders  in  good 
faith  and  for  value.  The  reason  is  obvious.  The  maker  ought  rather  to 
suffer  on  account  of  the  fraudulent  act  of  one  to  whom  he  intrusts  his 
paper,  or  who  is  made  ageut  in  respect  to  it,  than  an  innocent  party. 
The  law  esteems  him  in  fault  in  thus  putting  it  in  the  power  of  another 
to  perpetrate  the  fraud,  and  requires  him  to  bear  the  loss  consequent 
upon  this  negligence.  In  the  case  under  consideration  no  fault  can  be 
imputed  to  the  defendant.  He  did  not  intrust  his  signature  to  the  pos- 
session of  the  forger  for  the  purpose  of  binding  himself  by  a  contract. 
He  conferred  no  power  upon  the  party  who  committed  the  crime  to  use 
it  for  any  such  purpose.  He  was  not  guilty  of  negligence  in  thu-s  giving 
it,  for  It  is  not  unusual,  in  order  to  identify  signatures,  and  for  other 
purposes,  for  .men  thus  to  make  their  autographs.  The  defendant  cannot 
be  regarded  as  being  so  far  in  fault  in  the  transaction,  that  he  ought  to 
bear  the  loss  resulting  from  the  crime."  See  Kline  v.  Guthrie,  42  lud. 
227;  Deturler  V.  Besh,  44  Ind.  70. 

*  But  see  Cliue  v.  Guthrie,  42  Ind.  227,  where  one  was  held  not  liable 

477 


§    2'S;)  THE    RIGHTS    OF    HOXA    FIDE    HOLDERS.        [CH.  XIV. 

§  285.  lustruments  executed  by  mistake  or  under  false 
representations.  —  It  has  happened,  quite  frequently, 
particukirly  in  the  Western  States,  that  parties  have  been 
induced  by  false  representations  to  sign  negotiable  instru- 
ments, under  the  mistaken  belief  that  they  were  signing 
some  other  kind  of  contract.  In  several  of  the  States, 
these  contracts  have  been  held  to  be  void,  even  in  the  hands 
of  bona  fide  holders,  on  the  ground  that  there  was  no 
voluntary  execution  of  a  negotiable  instrument.^  In  Ne- 
braska, it  is  held  to  be  no  negligence  for  one  to  omit  to 
read  an  instrument,  relying  on  the  reading  of  it  by  another.^ 

But  the  authorities  are  generally  opposed  to  this  view  of 
the  rights  of  the  bona  fide  holder.  They  are  agreed  that 
the  bona  fide  holder  should  not  recover  on  an  instrument, 
whose  maker  is  a  blind  man,  or  one  who  cannot  read,  and 
to  whom  its  contents  have  been  falsely  read  or  stated. 
Such  a  person  cannot  be  expected  to  do  more  than  require 
the  instrument  to  be  read  to  them  ;  and  if  the  contents  are 

to  a  bona  fide  holder  on  an  instrument,  -vvhicli  he  signed,  without  know- 
ing its  character  and  supposing  it  to  be  a  blaulc  piece  of  paper,  for  the 
purpose  of  sliowing  liow  his  name  was  spelled.  But  this  case  is  com- 
plicated by  the  fact  that  the  party  signing  his  name  under  these  circum- 
stances did  not  deliver  it  to  the  party  who  made  a  fraudulent  use  of  it. 
As  to  the  effect  of  such  a  fact,  see  ante,  §282. 

J  Gibbs  V.  Linabury,  22  Mich.  492,  Graves,  J.,  saying;  "  Now,  when  a 
party  never  designed  to  put,  or  cause  to  be  put,  any  sort  of  negotiable 
paper  in  circulation,  when  the  thought  of  doing  so  never  entered  his 
mind,  when  he  had  never  bargained  to  do  so,  when  he  has  never  con- 
sciously been  privy  to  any  attempt  to  sot  such  paper  afloat,  how  can  it  be 
said  that  his  will  in  any  way  assented  to  the  concoction  of  such  a  con- 
tract so  as  to  make  him  an  object  of  the  rule.  So  far  as  this  principle 
is  concerned,  it  is  not  perceived  how  the  instance  here  supposed  would 
differ  from  that  when  the  act  leading  to  the  mischief  is  done  by  an  in- 
sane man,  or  is  compelled  by  duress.  The  point  is,  that  the  will  does 
not  go  with  the  act."  See  also  to  the  same  effect,  Anderson  v.  Walter, 
34  Mich.  113;  Kellogg  v.  Steiuer,  29  Wis.  G27;  Butler  v.  Karns,  37  Wis. 
61;  Briggs  v.  Ewart,  51  Mo.  251;  Martin  v.  Sraylee,  55  Mo.  577;  Corby  v. 
Weddle,  57  Mo.  452,  overruled  by  Shirts  v.  Overjohn,  60  Mo.  315. 

2  Palmer  v.  Largeut,  5  Neb.  223. 
478 


CH.   XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    285 

misstated  to  them,  there  is  neither  negligence  nor  the  exercise 
of  will  pret^ent,  if  they  sign  the  paper  under  the  mistaken 
belief  that  it  is  somethinof  else  than  a  negotiable  instru- 
ment.^  Even  one  who  is  unable  to  read  or  write,  may  be 
guilty  of  negligence.  As  was  said  by  Chief  Justice  Gibson, 
if  he  "  will  not  demand  to  have  it  read  and  explained  to 
him,  he  is  guilty  of  supme  negligence,  which,  I  take  it,  is 
not  the  subject  of  protection,  either  in  equity  or  law."  ^ 

But  there  is  never  any  excuse  for  one  who  is  able  to  read 
himself,  if  he  does  not  do  so,  but  contents  himself  with 
hearing  it  read  by  another.  By  doing  so,  he  unnecessarily 
reposes  confidence  in  another,  and  if  his  confidence  proves 
to  be  misplaced,  he  must  abide  the  consequence.  Such  a 
person  cannot,  on  the  ground  of  mistake  and  misrepresenta- 
tion, prevent  a  recovery  against  him  by  a  bona  fide  holder. 
At  least  that  is  the  opinion  of  a  majority  of  the  courts.^ 

^  Putnam  v.  Sullivan,  4  Mass.  45;  Whitney  v.  Snyder,  2  Lans.  477; 
Fenton  v.  Robinson,  11  N.  Y.  S.  C.  (4  Hun)  252.  See  Chapman  v.  Rose,  56 
N.  Y.  137 ;  Scliuylkill  Co  v.  Copley,  67  Pa.  St.  386.  The  same  rule  has  been 
applied  to  a  German,  who  could  not  read  or  write  English,  and  wlio  had 
been  misled  by  a  false  reading  of  the  instrument.  Fayette  Co.  S.  B.  v. 
Steffer,  54  Iowa,  214;  Walker  v.  Ebert,  29  Wis.  196.  See  also  Puffer  v. 
Smith,  57  111.  527;  Van  Brunt  v.  Singley,  85  III.  281;  First  Nat.  Bank  v. 
Lierman,  5  Neb.  247;  Griffiths  v.  Kellogg,  39  Wis.  290. 

2  Greenfield's  Estate,  2  Harris,  496. 

3  Ruddell  V.  Plialor,  72  Ind.  533 ;  Ruddell  v.  Dillman,  73  Ind.  521 ;  Fislier 
V,  Von  Behren,  70  Ind.  19;McCormack  v.  Molburg,  43  Iowa,  561;  Hop- 
kms  V.  Hawkeye  Ins.  Co.,  57  Iowa  (1881)  203 ;  Roach  v.  Karr,  18  Kan.  529; 
Chapman  v.  Rose,  56  N.  Y.  137,  overruling  and  explaining  prior  cases  in 
the  lowercourts;  Shirts  v.  Overjohn,  60  Mo  315  (overruling  prior  cases)  ; 
Fredericks  v.  Clemens,  60  Mo.  313 ,  Citizens'  Nat.  Bank,  v.  Smith,  55  N.  H. 
393;  Leach?;. Nichols,  55111.  273-,  Ross  v.  Doland,  29  Ohio  St.  473;  Kimble 
V.  Christie,  55  Ind.  140;  Woollen  v.  Wise,  73  Ind.  201 ;  Woolen  v.  Whitacre, 
73  Ind.  201 ;  First  Nat.  Bank  v.  Latton,  67  Ind  256 ;  Fisher  v.  Von  Behren, 
71  lud.  19;  Indiana  Nat,  Bank  v.  Welkerly,  67  Ind.  345;  Thomas  v.  Rud- 
dell, 60  Ind.  326;  Maxwell  v.  Morehead,  66  Ind  301;  McDonald  v.  Mus- 
catine  Nat.  Bank,  27  Iowa,  319.  In  Douglass  v.  Matting,  29  I'owa,  498, 
Beck,. J.,  said:  "The  defendant  trusted  the  one  with  whom  he  was  deal- 
ing with  the  preparation  of  the  instrument.    The  instrument  as  prepared 

479 


§    28G  THE    RIGHTS    OF    BONA    FIDE   HOLDERS.       [CH.  XIV. 

In  Illiuois,  it  is  now  piovidecl  by  statute  that  an  instru- 
ment is  void  even  in  the  hands  of  a  bona  fide  holder,  the 
signature  to  which  has  been  obtained  by  the  fraudulent 
misrepresentations  of  the  payee  as  to  the  character  and 
liability  of  the  paper  signed. ^ 

§  280.  Instruments  delivei'ed  in  violation  of  instruc- 
tions. —  It  has  been  held  in  Englaml  that  if  a  negotiable 
instrument  is  negotiated  by  one,  for  whose  accommodation 
it  was  made,  in  violation  of  the  conditions  upon  which 
negotiation  was  authorized,  a  bona  fide  holder  would  not 
set  a  good  title  thereto,  on  the  ground  that  there  had  been 
no  delivery  by  any  duly  authorized  agent,  and  consequently 
no  liability  was  created  by  the  unauthorized  transfer  of  the 

was  not  what  clef  eudaut  had  agreed  to  sign,  but  was  voluntarily  executed 
by  him.  The  act  of  the  agent  was  a  fraud  whereby  the  defendant  was 
induced  to  make  a  note,  and  not  the  false  making  of  it,  which  is  neces- 
sary to  constitute  a  forgery.  *  *  *  Now  it  would  be  manifestly 
unjust  to  permit  the  maker,  while  admitting  the  genuineness  of  his  signa- 
ture, to  defeat  the  note,  on  the  ground  that,  through  his  own  culpable 
carelessness  while  dealing  with  a  stranger,  he  signed  the  instrument 
without  reading  it  or  attempting  to  ascertain  its  true  contents.  The  law 
will  favor,  as  between  the  holder  and  maker  in  such  a  case,  the  more 
innocent  and  diligent.  The  maker  had  it  in  his  power  to  protect  himself 
from  the  fraud,  but  failed  to  do  so.  When  the  consequences  of  this  act 
are  about  to  be  visited  upon  him,  he  seeks  to  make  another  bear  it,  on  the 
ground  that  he  was  defrauded  through  his  own  gross  negligence.  He 
can  not  certainly  claim  protection  either  on  the  ground  of  his  innocence  or 
dilige-nce.  The  rule  contended  for  by  the  appellee  would  tend  to  destroy 
all  confidence  in  commercial  paper.  It  is  better  that  defendant,  and 
others  who  so  carelessly  affix  their  names  to  paper,  the  contents  of  which 
are  unknown  to  them,  should  suffer  from  the  fraud  which  their  reck- 
lessness invites,  than  that  the  character  of  commercial  paper  should 
be  impaired,  and  the  business  of  the  country  interfered  with  and  un- 
settled." 

1  Hubbard  v.  Rankin,  71  111.  129;  Richardson  v.  Schirtz,  59  111.  313; 
Auten  V.  Gruner,  90  111.  300.  But  it  still  seems  to  be  necessary  in  that 
State  to  show  that  he  was  acting  with  ordinary  prudence  and  caution  in 
trusting  to  the  representations  of  another  as  to  the  contents.  Homes 
V.  Hale,  71  111.  552.  See  also  Swannell  v.  Watson,  71  111.  456. 
480 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    2S6 

instrument.^  But  nowhere  in  the  United  States  is  this  rule 
followed,  at  least  where  there  is  a  conditional  delivery  to 
the  payee,  and  he  negotiates  it  in  violation  of  the  condi- 
tion. The  courts  are  unanimous  in  holding  that  the  bona 
fide  holder  can  recover  of  the  maker,  on  the  same  ground 
as  he  is  held  to  be  entitled  to  recover  of  one  who  intrusts 
a  blank  instrument  to  another  to  be  filled  up  for  a  given 
sum  of  money,  and  the  latter  fills  it  up  for  a  larger  amount, 
viz.:  that  having  reposed  confidence  in  this  person,  the 
maker  must  bear  the  loss  resulting  from  the  breach  of  con- 
fidence, rather  than  the  bona  fide  holder,  who  has  thus  been 

1  Awde  V.  Dixon,  6  Exch,  869.  In  this  case,  the  defendcant  Imd  agreed 
to  join  his  brother  in  making  a  promissory  note  for  the  latter's  accom- 
modation, provided  that  a  third  person  joined  also  in  its  execution,  and 
in  signing  the  defendant  left  room  enough  before  his  name  for  another 
signature.  The  note  fell  into  the  hands  of  a  bona  fide  holder.  In  render- 
ing judgment  in  favor  of  the  defendant,  Parke,  B.,  said:  "  It  is  unneces- 
sary to  say  whether  this  instrument  is  a  forgery  or  not,  but  there  is  cer- 
tainly ground  for  contending  that  the  making  of  it  complete,  contrary  to  the 
directions  of  the  defendant,  renders  it  a  false  instrument  as  against  him. 
I  do  not  gainsay  the  position  that  a  person  who  puts  his  name  to  a  blank 
paper  impliedly  the  filling  of  it  up  to  the  amount  that  the  stamp  will 
cover.  But  this  is  a  different  case.  Here  the  instrument,  to  which  the 
defendant's  name  is  attached,  is  delivered  to  his  brother,  with  power  to 
make  it  a  complete  instrument,  on  one  condition  only,  that  is,  provided 
Robinson  would  be  a  joint  surety  with  him.  This,  therefore,  is  an  in- 
stance of  a  limited  authority,  where,  in  a  case  of  refusal  by  Robinson  to 
join,  there  is  a  countermand.  Robinson  refused  to  join,  and  consequently 
the  defendant's  brother  had  no  authority  to  make  use  of  the  instrument. 
A  party  who  takes  such  an  incomplete  instrument  cannot  recover  upon 
it,  unless  the  person  from  whom  he  receives  it  had  a  real  authority  to 
deal  with  it.  There  was  no  such  authority  in  this  case,  and  unless  the 
circumstances  show  that  the  defendant  conducted  himself  in  such  a  way 
as  to  lead  the  plaintiff  to  believe  that  the  defendant's  brother  had  author- 
ity, he  can  take  no  better  title  than  the  defendant's  brother  could 
give.  *  *  *  It  is  a  fallacy  to  say  that  the  plaintiff  is  a  bona  fide 
holder  for  value ;  he  has  taken  a  piece  of  blank  paper,  not  a  promissory 
note.  He  could  only  take  it  as  a  note  under  the  authority  of  the  defend- 
ant's brother,  and  he  had  no  authority,  consequently  the  instrument  is 
void  as  against  the  defendant." 

31  481 


§    286  THE    RIGHTS    OF    BONA    FIDE    HOLDERS.        [CH.   XIV. 

invited  to  trust  the  agent.'  There  has  been  some  disposi- 
tion on  the  part  of  the  American  courts  to  follow  the 
English  precedent  so  far  as  to  hold  that  when  a  negotiable 
instrument  is  delivered  to  a  third  person  to  hold  as  an 
escroiu,"  and  this  agent  delivers  it  to  the  payee,  before  the 
condition  hapjjens,  no  title  passes,  and  not  even  a  bona  fide 
holder  can  recover  on  such  an  instrument.-^  But  the  better 
opinion  is  that  even  in.  the  case  of  an  escrow,  if  the  instru- 
ment has  been  negotiated  in  violation  of  the  conditions  on 
which  the  delivery  v/as  made,  a  bona  fide  holder  can  never- 
theless recover  on  it  against  the  maker.* 

1  Smith  V.  Moberly  10  B.  Mon.  269;  Taylor  v.  Craig,  2  J.  J.  Marsh. 
449;  Foy  v.  Blackstone,  31  111.  538;  Bonner  v.  Nelson,  57  Ga.  433;  Bank 
of  Missouri  v.  Phillips,  17  Mo.  30;  Stewart  v.  Anderson,  59  Intl.  375; 
Ayres  v.  Milroy,  53  Mo.  51G;  Black  River  Ins.  Co.  v.  N.  Y.  L.  &  T.  Co., 
73  N.  Y.  282;  Gage  v.  Sharp,  24  Iowa,  15;  Deardofe  v.  Foresman,  28  Ind. 
481 ;  Meri'iam  v.  Rockwood,  47  N.  H.  81 ;  Farmers',  etc.,  Bank  v.  Humph- 
rey, 3G  Vt.  554;  Passiirapsic  Bank  v.  Goss,  31  Vt.  315,  Barrett,  J.,  saying: 
"The  propriety  of  this  view  is  strongly  illustrated  by  the  well  known 
course  of  this  kind  of  business.  The  instance  has  hardly  occurred  of  a 
bank  making  inquiry  when  paper,  genuine  and  apparently  designed  for 
discount,  is  presented  at  the  counter,  whether  as  against  the  makers  it 
is  entitled  to  be  used.  If  the  court  should  sustain  this  defense  in  this 
case,  it  would  become  necessary  for  banks,  and  equally  for  all  persons, 
upon  the  offer  of  a  note  with  sureties,  in  the  usual  course  of  business, 
to  call  before  them  all  the  makers,  and  ascertain,  by  personal  inquiry, 
whether  it  was  'all  right,'  and  not  subject  to  some  side  agreement  or 
reservation  in  favor  of  some  of  the  sureties,  that  might  render  it  invalid 
as  against  them.  We  think  such  a  rule  of  law  would  not  only  contravene 
the  well  established  usages  of  business,  but  would  surprise,  if  not 
shock,  the  judgment  of  tlie  community  upon  this  subject." 

2  See  ante,  §  Md,  for  a  discussion  of  delivery  as  an  escroxo. 

^  Chipman  v.  Tucker,  38  Wis.  43;  Cole,  J. :  "Delivery  of  a  promis- 
sory note  by  the  maker  is  necessary  to  a  valid  inception  of  the  contract, 
and  until  there  is  a  delivery,  the  note  has  no  vitality,  and  the  rules  of 
commercial  paper  liave  no  application  to  it."  See  also  Roberts  v.  Mc- 
Gratli,  38  Wis.  52;  Roberts  v.  Wood,  88  Wis.  60.  See  also  Babcock  v. 
Beman,  1  Root,  87;  Couch  v.  Meeker,  2  Conn.  302. 

*  1  Parsons'  N.  &  B.  51;    Vallett  v.   Parker,  6  Wend.  615;  Moore  v. 
Miller,  G  Lans  390,    Fearing  v.  Clark,  16  Gray,  474;    Watson  v.  Russell, 
3  B,  &  S.  34 ;  5  B.  &  S.  968;  Mills  v.  Williams,  16  S.  C.  593. 
4^2 


CH.   XIV.]       THE    EIGHTS    OF    BONA    FIDE    HOLDERS.  §    287 

§  287.  Negotiable  instruments  executed  under  du- 
ress.—  It  is  doubtful  whether  a  bona  fide  holder  can 
recover  on  an  instrument,  whose  execution  was  procured 
by  duress.  As  between  the  original  parties  there  can  be  no 
action  on  such  an  instrument.^  In  England,  it  has  been  held 
that  bona  fide  holders  of  an  instrument,  obtained  by  the 
duress  of  the  maker,  cannot  recover  on  it,  unless  he  gives 
some  evidence  of  consideration.^  The  inference  from  this 
decision  is  that  the  bona  fide  holder  can  recover,  if  he 
proves  himself  to  be  a  holder  for  value.  But  this  opinion 
can  not  be  considered  consonant  with  other  principles  of 
law,  applicable  to  negotiable  instruments.  If  the  exercise  of 
the  will  power,  in  the  execution  of  a  negotiable  instrument 
is  necessary  to  give  it  life,^  even  in  the  hands  of  a  bona 
fide  holder;  then,  surely  one  who  signs  an  instrument 
under  duress,  cannot  be  held  bound  on  it  to  any  holder. 
And  this  is  the  rule  laid  down  by  the  authorities  in  Scot- 
land ^  and  in  this  country  by  the  latest  authorities.^     But 

1  Bush  V.  Brown,  49  Ind.  573;  Taylor  v.  Jacques,  lOG  Mass.  291.  It 
seems  that  a  contract  procured  by  duress,  is  only  voidable,  if  the  duress 
consists  only  of  threats;  but  if  it  extends  to  such  a  use  of  physical 
compulsion  as  to  make  the  ostensible  party  a  mere  machine,  it  is  abso- 
lutely void.  Fairbanks  v.  Snow,  13  N.  E.  Rep.  596;  Vintage  v.  King,  4 
Allen,  565;  Foss  v.  Hildreth,  10  Allen,  26,  80;  Worcester  v.  Eaton,  13 
Mass.  371;  Fisher  v.  Shattuck,  17  Pick.  252;  Lewis  v.  Bannister,  16 
Gray,  500;  Clark  v.  Pease,  41  N.  H.  414;  Whelpdale's  Case,  3  Coke,  241; 
Duncan  v.  Scott,  1  Camp.  100. 

-  Duncan  v.  Scott,  1  Camp.  100. 

s  See  ante,  §  282. 

*■  Thompson  on  Bills  (Wilson's  ed.),  62,  cited  in  1  Daniel's  Negot. 
Inst.,  §  857. 

'  1  Daniel's  Negot.  Inst.,  §§  857,  858,  saying:  "Indeed  we  can  discover 
no  principle  which  would  compel  any  person,  whether  a  party  to  negoti- 
able or  other  kind  of  instrument,  to  pay  it,  when  under  violent  duress  — 
that  is  under  the  compulsion  of  force  with  the  only  alternative  of  suTb- 
mitting  to  great  bodily  injury  or  indignity.  Consent  is  of  the  essence 
of  every  contract,  and  if  it  is  not  given,  the  party  should  not  be  bound  if 
he  had  no  alternative  but  to  seem  to  give  it,  or  suffer  griev.ous  wrong. 
He  creates  no  trust,  he  commits  no  negligence,  whereby  the  confidence 

483 


§    287  THE    UIGHTS    OF    BONA    FIPE    HOLDERS.        [CII.   XIV. 

the  Enfflish  nilins:  has  boon  followed  by  some  of  the 
American  authorities,  on  the  grouud  that  siuce  negotiable 
instruments  executed  under  duress  are  not  absolutely  void, 
they  are  good  in  the   hands  of  a  bona  fide  holder,^ 

A  negotiable  instrument  is  voidable  on  account  of  duress 
only  by  those  parties  who  executed  it  under  duress.  Sure- 
ties and  other  joint  obligors  are  still  bound  on  such  in- 
struments, if  they  have  signed  it  with  knowledge  of  the 
duress.  If  they  were  ignorant  of  the  duress,  they  can  not 
be  held  liable,  since  they  have  been  misled,  and  have  signed 
under  a  mistake  of  facts. ^  The  same  rule  has  been  applied 
to  an  accommodation  indorser  who  indorses  without  knowl- 
edije  of  the  duress.  He  is  held  not  to  be  liable  to  the 
holder  who  is  guilty  of  the  duress  towards  the  maker.  He 
would  of  course  be  liable  to  a  bona  fide  holder.^ 

of  another  can  be  betrayed.  He  is  in  no  default,  having  a  right  of 
self-defense  in  preferring  his  own  life  and  safety  to  the  chances  of 
pecuniary  injury  to  otliers;  and  his  extorted  act  is  nothing  more  nor 
less  than  the  act  of  the  wrong-doer,  wlio  uses  his  person  as  the 
instrument  of  forging  his  name.  Threats  to  inflict  slighter  wrongs 
would,  as  we  have  seen,  stand  on  a  different  footing."  See  also, 
to  same  effect,  1  Parsons'  N.  &.  B.  270.  In  Loomis  v.  Rucl^er,  .56  N.  Y. 
465,  a  married  woman  was  coerced  by  her  husband  to  sign  a  promis- 
sory note,  as  a  charge  on  her  separate  estate,  and  it  was  held  to  be 
absolutely  void. 

1  Hogan  V.  Moore,  48  Ga.  156;  Clarke  v.  Pearce,  41  N.  II.  414;  Ed- 
wards on  Bills,  325;  Story  on  Notes,  §  188;  Story  on  Bills,  §  185.  Sec 
Griffith  V.  Sitgreaves,  90  Pa.  St.  161.  See  the  same  ruling  applied  to 
hona  fide  holders  of  deeds  of  conveyance,  and  mortgages,  Deputy  v. 
Stapleford,  19  Cal.  302;  Rogers  v.  Adams,  66  Ala.  600;  Lane  v.  Blizzard, 
70  lad.  23. 

2  Hazard  v.  Griswold,  21  Fed.  Rep.  178;  Bowman  v.  Hilter,  130  Mass. 
153;  Harris  v.  Carmody,131  Mass  51;  McClinlick  ».  Curamius,  3  McLean, 
158;  Plummer  v.  People,  16  111.  358;  Spaulding  v.  Crawford,  27  Tex.  155. 
See  Osborn  v.  Robbius,  36  N.  Y.  365;  Tliorapson  v.  Lockwood,  15  Johns 
256;  Evans  v.  Huey,  1  Bay,  13;  Fay  ».  Oatlcy,  6  Wis.  42;  State  v.  Brunt- 
ley,  27  Ala.  44. 

3  Griffith  r.  Sitgreaves,  90  Pa.  St.  161,  Paxton,  J.,  saying:  "We  are 
next  to  consider  the  question  whether  the  defendant,  who  is  sued  as  in- 
dorser of  the  notes,  can  take  advantage  of  the  duress  practiced  upon  the 

484 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    288 

§  288.  Boua  fide  holders  protected  from  defenses  by 
-estoppel. — If  the  purchaser  of  a  negotiable  instrument, 
for  the  purpose  of  allaying  any  suspicions  he  might  have 

maker.  In  Huscombe  v.  Standing,  Cro.  Jac.  187,  the  defendant  having 
been  sued  on  a  bond,  on  which  he  was  surety  for  one  Street,  entered  a 
plea  that  the  bond  was  obtained  by  duress  of  his  principal.  The  plaintiff 
demurred  to  this  plea,  and,  without  argument,  it  was  held  that  '  it  was 
not  any  plea  for  the  surety,  although  it  had  been  a  good  plea  for  the 
said  Street;  for  none  shall  avoid  his  own  bond  for  the  imprisonment  or 
duress  of  any  other  than  himself.'  The  same  doctrine  is  recognized  in 
Bacon's  Abridg.,  title  Duress,  A,  and  in  2  RoUe  Abridg.  124.  Mantell 
V.  Gibbs,  1  Brownlow,  G2;  Eobinson  tj.  Gould,  11  Gush.  55;  Plummerv. 
People,  1j6  111.  358;  McClintick  v.  Cummins,  3  McLean,  158;  Thompson 
V.  Lockwood,  15  Johns.  259,  were  cited  by  plaintiffs  as  maintaining  the 
doctrine  that  the  duress  which  will  avoid  a  contract  must  be  offered  to 
the  party  who  seeks  to  take  advantage  of  it.  On  the  other  hand.  Strong 
V.  Graunis,  26  Barb.  122;  Osborn  v.  Bobbins,  3G  N.  Y.  3G5,  and  Fisher  v. 
Shattuck,  17  Pick.  252,  were  cited  on  behalf  of  defendant  as  sustaining 
the  opposite  view.  I  have  examined  these  cases  with  some  care,  and  do 
not  regard  them  as  controlling  authority  on  cither  side.  They  depend 
vei'y  mucli  on  the  pleadings  or  their  special  circumstances.  I  have  no 
doubt  of  the  correctness  of  the  general  principle  laid  down  in  the  older 
cases,  that  duress,  to  be  a  good  plea,  must  be  offered  to  the  person  who 
seeks  to  take  advantage.  *  *  *  jj;!  ^^n  h^q  cases  cited,  the  duress  was 
either  upon  the  party  seeking  to  avoid  the  instrument,  or  it  was  known 
to  hira.  *  *  *  It  by  no  means  follows  that  because  duress  of  another 
is  not  a  good  plea,  and  that  in  some  instances  it  may  not  avail  as  a  de- 
fense, that  it  cannot  be  set  up  so  successfully  in  any  case.  Had  the  de- 
fendant, after  indorsing  these  notes,  passed  them  to  the  plaintiffs  and 
received  the  money  therefor,  it  is  very  clear  he  could  not  set  up  the 
defense  of  duress  of  the  maker;  so  if  he  had  indorsed  them  with  notice 
of  the  duress,  or  if  the  notes  were  in  the  liands  of  an  innocent  third 
party  for  value.  In  these  and  many  other  instances  that  might  be  aiaraed 
the  defense  referred  to  wo<uld,  for  obvious  reasons,  be  unavailing. 
■The  case  in  hand,  however,  differs  materially  from  them  and  from  all 
the  cases  cited.  Here  the  defendant  was  the  surety  of  the  maker, 
nothing  more,  and  defends  under  the  broad  plea  of  non  assumpsit. 
The  form  of  the  transaction  is  not  material  so  long  as  the  conten- 
tion is  between  the  original  parties.  Tlie  defendant's  contract  is 
to  pay  the  notes,  if  his  principal  fails  to  do  so;  and  he  may  l)e  pro- 
ceeded against  immediately  upon  such  failure.  But  upon  payment 
of  the  money  he  has  his  remedy  over  against  his  principal.  It  is 
a  recognized  doctrine  in  the  law  of  surety,  that  whatever  discharges  the 

485 


§    266  THE    IIIGHTS    OF    BONA    FIDE    HOLDEKS.        [cil.  XIV. 

concerning  its  genuineness  and  legality,  should  make  spec- 
ial inquiries  of  the  maker  or  other  prior  parties  to  the 
instrument  before  purchasing  it;  and  if  he  should  receive 
assurances  of  its  genuineness  and  legality  and  he  should 
buy  the  instrument  in  reliance  upon  these  assurances,  those 
who  gave  him  the  assurances  would  thereafter  be  estopped 
from  setting  up  any  defense  against  such  a  holder.^     But 

principal  debtor,  discliarges  also  the  surety.  There  are  exceptions  to  the 
rule,  as  t\here  one  had  signed  a  joint  and  several  note  with  a  married 
woman  as  surety.  Nor  will  this  rule  apply  to  cases  in  which  a  surety 
is  required,  for  the  very  reason  that  the  priucipal  may  have  a  defense 
that  will  defeat  the  claim  against  him. 

"  In  these  and  the  like  cases  the  surety  knows  when  he  binds  himself 
that  he  has  no  remedy  over.  He  is  not,  therefore,  misled.  The  defend- 
ant indorsed  the  notes  without  any  knowledge  of  anything  to  put  hira 
upon  inquiry  of  the  duress  practiced  upon  his  principal.  The  re- 
sult will  be,  if  a  recovery  is  had  against  the  defendant,  he  will  have 
no  redress  against  the  maker,  and  this  by  reason  of  the  duress 
upon  the  maker,  the  act  of  the  plaintiffs.  He  is  therefore  directly 
injured  by  it,  and  has  a  right  to  defend  upon  that  ground.  Had  he 
signed  the  notes  with  knowledge  of  the  duress,  it  would  have  been  his 
folly,  and  the  consideration  being  good,  the  plaintiffs  would  have  been 
entitled  to  recover.  But  they  made  the  mistake  of  keeping  the  maker  a 
quasi-prisoner  in  New  York  by  threats,  whilst  the  notes  were  sent  to  the 
indorser  for  his  signature,  thus  depriving  him  of  his  remedy  over  against 
his  principal.     Indorsing  this,  the  plaintiffs  overshot  themselves." 

1  Tohey  v.  Chipman,  13  Allen,  133;  Grout  v.  De  Wolf,  1  R.  I.  393; 
Lynch  v.  Kennedy,  Si  N.  Y.  151;  Vanderpool  v.  Brake,  28  lud.  130;  Mc- 
Cabe  V.  Raney,  32  lud.  312 ;  Rose  v.  Hurley,  39  Ind.  82;  Vaughn  v.  Ter- 
rall,  57  Ind.  182;  Reedy  v.  Brunner,  GO  Ga.  107;  Plant  v.  Voegelm,  30 
Ala.  IGO;  Cloud  v.  Whiting,  38  Ala.  57;  Brooks  v.  Martin,  43  Ala.  360, 
Peters,  J.,  saying:  "  It  is  difficult  to -conceive  what  would  make  a  note 
'all  right '  that  could  not  be  collected  by  suit,  or  that  would  not  be  paid 
at  maturity,  if  the  maker  was  able.  *  *  *  n-^^  there  been  a  suit 
pending  on  the  note  between  Brooks  and  Martin,  and  the  latter  had  come 
into  the  court  and  pleaded  that  the  note  was  '  all  right '  the  court  could 
not  have  refrained  from  giving  judgraeut  against  him.  Now,  by  his 
words,  he  puts  in  this  plea  before  suit  is  brought,  and  the  law  will  not 
permit  hira  to  withdraw  it  after  suit  is  brought."  See  also  Fleischman 
V.  Stern,  90  N.  Y.  110;  Casco  Bank  v.  Keene,  53  Me.  104;  Greenfield 
Bank  v.  Crafts,  4  Allen,  447;  Beeraan  v.  Duck,  U  M.  &  W.  251 ;  Leach 
V.  Buchauan,  4  Esp.  22G;  Hefner  w.  Dawson,  G3  111.453;  Woodruff  t?. 
486 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    288 

in  all  cases  of  representations  by  the  primary  obligors, 
where  they  do  not  amount  to  unqualified  promises  to  pay, 
such  as  that  the  paper  is  genuine  or  legal  or  good,  they 
will  not  operate  as  estoppel,  in  respect  to  any  defense  of 
which  he  is  ignorant  at  the  time  that  he  made  the  repre- 
sentation; certainly  not  where  the  plaintiff  buys  after 
maturity.^ 

In  order  that  the  representation  may  operate  as  an  estop- 
pel, it  must  be  made  after  the  execution  of  the  instrument, 
and  to  one  or  more  parties,  who  are  expected  to  purchase 
the  instrument.  A  written  certificate  attached  to  a  note  to 
the  effect  that  the  note  -is  good  and  free  from  defenses  has 
been  held  to  create  no  estoppel.  As  Mr.  Daniel  says,  "  it  is 
too  much  like  having  '  I  am  honest '  chalked  on  his  back,"  ^ 
and  is  calculated  to  arouse  rather  than  to  allay  suspicion. 
Such  a  certificate  has  been  held  in  New  York  to  work  an 
estoppel,^  but  the  better  opinion  seems  to  be  that  it  would 
not  work  an  estoppel,*  any  more  than  the  words  "  for  value 

Munroe,  33  Md.  158;  Hefner  v.  Vandolah,  62  111.  483;  s.  c.  57  111.  520; 
Dow  V.  Sperry,  29  Mo.  390;  Workma'n  v.  Wright,  33  Ohio  St.  405  (31  Am. 
Rep.  546);  Rudd  v.  Mathews,  79  Ky.  (1881)  479  (37  Am.  Rep.  704). 

1  Mackay  v.  Holland,  4  Met.  69;  Sackett  v.  Kellar,  22  Ohio  St.  554; 
AUum  V.  Perry,  68  Me.  232;  Cloud  v.  Whiting,  38  Ala.  57.  But  see  Reedy 
V.  Brunner,  60  Ga.  107. 

2  1  Daniel's  Negot.  Inst.,  §  862. 

3  Chamberlain  v.  Townsend,  26  Barb.  611;  Truscott  v.  Davis,  4  Barh. 
495;  Mechanics'  Bank  v.  Townsend,  29  Barb.  569;  Clark  w.  Sisson,  4 
Duer,  408. 

*  Jaqua  v.  Montgomery,  33  Ind.-46.  In  this  case  it  was  held  to  be  no 
estoppel,  even  as  to  bona  fide  holders.  Gregory,  C.  J.,  said:  "  The  in- 
strument signed  at  the  time  the  note  was  executed  has  not  the  first  ele- 
ment of  an  estoppel.  It  is  no  more  than  what  the  note  itself  imported 
on  its  face.  It  was  obtained  by  the  same  fraudulent  act  that  proved  the 
execution  of  the  note.  It  was  a  part  of  the  same  contract,  and  was  as 
much  a  part  of  the  uo.te  as  if  it  had  been  incorporated  in  it.  It  was  a 
statement  upon  which  the  appellant  had  no  right  to  rely.  Indeed,  I 
think  that  such  a  paper  accompanying  an  ordinai'y  promissoiy  note  should 
have  the  effect  of  exciting  suspicion  that  all  was  not  right.  It  looks 
too  much  like  the  act  of  the  thief  in  attempting  to  cover  up  Iiis  crime." 

487 


§    288  Till-:    RIGHTS    OF    150NA    FIDK    HOLDERS.       [CH.  XIV. 

received,"  precludes  an  inquiry  into  the  consideration.^ 
On  the  other  hand,  in  order  to  operate  as  an  estoppel,  the 
representation  must  be  made  to  the  person  intended  to  be 
influenced  by  it,  before  he  purchases  the  commercial  instru- 
ment, or  at  any  rate  before  he  pays  value  for.it.  If  the 
representation  is  made  after  the  completion  of  the  trans- 
fer, it  is  not  good  as  an  estoppel. ^ 

The  party,  to  whom  the  representation  is  made,  must 
rely  upon  its  truth,  in  order  to  claim  the  protection  of  an 
estoppel.  If,  therefore,  he  does  not  merely  have  sus- 
picions concerning  the  genuineness  or  legality  of  the  in- 
strument, but  he  absolutely  knows  that  the  instrument  is 
subject  to  some  good  defense,  such  as  want  of  consideration 
or  fraud,  he  cannot  claim  the  protection  of  an  estoppel  on 
the  statement  of  the  maker  that  the  instrument  is  free  from 
legal  objections.  For  he  knows  that  the  statement  is  in- 
correct, and  he  is  not  misled  by  it.^ 

Finally,  it  has  been  held  that  an  estoppel  will  only  en- 
able the  holder  to  be  indemnified  to  the  amount  he  has  been 
induced  to  invest  in  the  purchase  of  the  instrument  on  the 
faith  of  the  defendant's  representations  unless  the  defend- 
ant is  guilty  of  fraud.  Instead  of  recovering  of  the  de- 
fendant the  face  value  of  the  paper,  he  can  only  recover 
the  consideration  he  gave  for  it,  together  with  legal  interest 
on  the  same.* 

1  Gaul  V.  Willis,  26  Pa.   St.  259.     • 

2  Moore  v.  Robinson,  62  Ala.  537;  Orossan  v.  May,  68  Intl.  242;  Wiu- 
cllev.  Canaday,  21  Ind.  248;  Stutsman  v.  Thomas,  39  Ind.  384. 

3  Sackett  v.  Kellar,  22  Ohio  St.  554;  Watson  v.  Iloag,  40  Iowa,  143; 
Piatt  V.  Jerome,  2  Blatchf.  C.  C.  186. 

*.  Campbell  v.  Nichols,  83  X.  J.  L.  88,  Beasley,  C.  J.,  saying:  "  If  the 
drawer  of  a  note  should  through  mistake  admit  its  validity  to  a  person 
'  who,  to  the  knowledge  of  such  drawer,  was  about  to  purchase  it,  after 
such  purchase  for  full  value,  it  is  clear  he  could  not  aver  his  mistake 
and  set  up  the  invalidity  of  the  note  as  a  defense.  In  such  a  case  it  is 
right  that  he  should  bear  the  loss  whose  carelessness  occasioned  it.  But 
suppose  the  purchaser  gave  only  part  value  for  the  note,  upon  what  prin- 
488 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    289 

§  289.  What  is  meant  by  bona  fides.  —  It  has  been 
already  stated  that  in  order  that  a  holder  may  claim  the 
right  to  be  protected  from  the  defenses  not  appearing 
on  the  face  of  a  commercial  instrument,  it  must  be  shown 
that  he  took  it  in  good  faith.  If  he  is  guilty  of  bad  faith, 
mala  fides,  he  cannot  claim  to  be  a  bona  fide  holder.  It  is 
therefore  necessary  to  determine  what  constitutes  such 
good  faith  as  to  make  one  a  bona  fide  holder.  The  earlier 
English  authorities  maintained  that  mala  fides  m  this  case, 
as  in  any  other  legal  transaction,  meant  participation  in 
some  fraud,  or  other  wrong. ^     In  a  later  case,  Lord  Ten- 

ciple  should  he  be  allowed  to  recover  more  than  the  money  thus  paid  of 
the  drawer,  who,  although  he  inadVerteutly  admitted  his  liability,  in 
point  of  fact  owes  nothing  on  the  paper?  The  true  measure  is,  that  the 
party  acting  on  the  faith  of  a  representation  should  be  indemnified  from 
loss,  by  the  application  of  the  doctrine  of  estoppel  in  pais,  and  these 
limits,  as  I  think,  take  the  whole  field  of  the  doctrine.  The  rule  is  de- 
signed to  protect  against  fraud,  either  in  fact  or  in  law;  but  the  remedy 
does  not  extend  beyond  the  injury.  Neither  good  policy,  nor  honest 
dealing  requires  tha-t  one  who  has  made  an  admission  which  has  influ- 
enced the  conduct  of  another,  should  be  estopped  by  such  admission 
from  showing  the  truth  of  the  case,  except  to  the  extent  of  permitting 
the  person  misled  from  recovering  indemnification.  For  it  is  to  be  re- 
membered that  the  principle  of  estoppel  applies- as  well  to  cases  of  un- 
intentional deceptions  as  to  designed  and  actual  frauds,  and  it  would 
certainly  seem  plain,  that,  in  the  former  class  of  cases,  the  limitation  of 
the  doctrine  above  indicated  is  absolutely  necessary  for  the  accomplish- 
ment of  the  ends  of  justice." 

1  Miller  r.  Race,  1  Bur.  452.  In  Lawsonu.  Weston,  4  Esp.  56,  where  the 
court  was  urged  to  maintain  that  the  holder  of  a  bill  of  exchange  which 
had  been  lost,  and  negotiated  by  the  finder,  notwithstanding  an  extensive 
advertisement  of  it  in  the  newspapers,  —  could  not  recover  on  it  without 
showing  that  he  had  used  reasonable  diligence  in  inquiring  into  the  cir- 
cumstances surrounding  the  bill  and  the  person  who  offered  to  negotiate 
it.  Lord  Kenyon  said :  "I  think  the  point  in  this  case  has  been  settled  by 
the  case  of  Miller  v.  Race,  in  Burrow.  If  there  was  any  fraud  in  the  trans- 
action, or  if  a  bona  fide  consideration  had  not  been  paid  for  the  bill  by 
the  plaintiffs,  to  be  sure  they  could  not  recover;  but  to  adopt  the  princi- 
ple of  the  defense  to  the  full  extent  stated  would  be  at  once  to  paralyze 
the  circulation  of  all  the  paper  in  the  country  and  with  it  all  its  com- 
merce.    The  circumstance  of  the  bill  Jiaviug  been  lost,  might  have  been 

489 


§    289  THE    KIGIITS    OF    150NA    FIDE    HOLDERS.        [CH.   XIV, 

tcrdeii  so  fur  modified  the  existing  rule,  as  to  hold  that  one 
is  not  a  bona  fide  holder  who  took  the  paper  under  circum- 
stances which  ought  to  have  excited  the  suspicions  of  a 
prudent  and  careful  man.^  This  ruling  was  subjected  to  the 
universal  criticism  of  both  the  legal  and  mercantile  world, 
and  the  complaints  of  the  merchants  and  bankers  induced 
the  court  under  the  lead  of  Lord  Denman,  C.  J.,  to  require 
proofs  of  gross  negligence,  to  take  away  from  one  the  char- 
acter of  a  bona  fide  holder. ^  Finally,  in  response  to  the 
demands  of  public  opinion  in  the  mercantile  world,  the 
court  repudiated  in  its  entirety  Lord  Tenterden's  doctrine 
of  negligence,  as  being  the  foundation  of  mala  fides,  and  re- 
turned to  the  definition  of  good  faith  given  by  Lord  Kenyon.* 
In  the  United  States,  the  rule  laid  down  by  Lord  Tenter- 
den,  requiring  the  holder  to  make  diligent  inquiries  when- 
ever there  were  suspicious  circumstances  attending  the 
negotiation  of  the  instrument,  was  followed  and  adopted 
by  Chancellor  Kent,^  and  by  the  earlier  decisions  in  many 
of  the  States,  which  have  been  since  overruled.^     It  is  still 

material,  if  they  could  bring  knowledge  of  that  fact  home  to  the  plaint- 
iffs. The  plaintiffs  might  or  might  not  have  seen  the  advertisement,  and 
it  would  be  going  great  lengths  to  say  that  a  baniier  was  bound  to  make 
inquii-y  concerning  every  bill  brought  to  hira  to  discount;  it  would  apply 
as  well  to  a  bill  for  £10  as  for  £10,000." 

1  Gill  V.  Cubitt,  3  Barn.  &  Cres.  466;  Strange  v.  Wigney,  6  Bing.  677 
(19  E.  C.  L.  R.) ;  Snow  v.  Peacock,  2  C.  &  P.  215;  Beckwith  v.  Corrall,  2 
C.  &  P.  259. 

2  Crook  V.  Jadis,  5  Barn.  &  Ad.  (27  E.  C.  L.  R.)  909. 

3  Goodman  v.  Harvey,  4  Ad.  &  El.  870;  Arbouiu  v.  Anderson,  1  Ad.  & 
El.  (N.  s.)  498;  Uther  v.  Rich,  10  Ad.  &  El.  784;  Raphael  v.  Bank  of  En- 
gland, 33  Eng.  L.  &  Eq.  278;  Easeley  v.  Crockford,  10  Bing.  (25  E.  C.  L. 
R.  116)  243. 

<  3  Kent  Com.  103,  104. 

5  Hamilton  v.  Marks,  52  Mo.  81;  63  Mo.  167;  Buckner  v.  Jones,  1  Mo. 
App.  538;  Edwards  v.  Thomas,  2  Mo.  App.  283;  Ayer  v.  Hutchius,  4 
Mass.  370;  Holbrook  v.  Mix,  1  E.  D.  Smith,  154;  Pringle  v.  Phillips,  5 
Sand.  157;  Wiggins  v.  Bush,  12  Johns.  306;  Hall  v.  Hale,  8  Conn.  336; 
Beltzhoover  v.  Blackstock,  3  Watts,  20;  Cone  v.  Baldwin,  12  Pick.  545. 
490 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §     289 

the  rule  in  some  of  the  States.^  But  the  great  weight  of 
authority  in  this  country,  as  well  as  reason,  supports  the 
contrary  doctrine,  that  the  bona  fide  character  of  a  holder 
can  only  be  destroyed  by  proof  of  his  participation  in  a 
fraudulent  transfer  of  the  instrument."^  There  cannot  be 
any  doubt  as  to  the  great  value  to  the  commercial  world  of 
this  latter  rulins;.  If  a  banker  or  other  indorsee  of  a 
negotiable  instrument  had  to  make  an  inquiry  into  every 
suspicious  circumstance,  that  attended  the  proffer  of  the 
instrument  for  negotiation,  it  would  clog  the  wheels  of 
commerce,  and  deprive  the  commercial  paper  of  its  chief 

1  Sanford  v.  Norton,  14  Vt.  234;  Varin  v.  Hobson,  8  La.  50;  Lapice  v. 
Bowmau,  17  La.  152 ;  Nicholsou  v.  Pattou,  13  La.  216 ;  Lanfear  v.  Blosman, 
1  La.  Ann.  148;  Marsh  v.  Small,  3  La,  Ann.  402;  Adkins  v.  Blake,  2  J.J. 
Marsh.  40;  McConnell  v.  Hodson,  2  Gilm.  640;  Russell  v.  Hadduck,  3 
Gilm.  233;  Hunt  v.  Sandford,  6  Yerg.  387;  Ryland  v.  Brown,  2  Head,  273; 
Merrill  v.  Duncan,  7  Heisk.  164. 

2  Murray  v.  Lardner,  2  Wall.  110;  Swift  v.  Tyson,  16  Pet.  1;  Good- 
man V.  Simonds,  20  How.  367;  Shaw  v.  Railroad  Co.,  101  U.  S.  564; 
Swift  V.  Smith,  102  U.  S.  444,  Bank  of  Pittsburgh  v.  Neal,  22  How.  108; 
Worcester  Co.  Bank  v.  Dorchester,  etc..  Bank,  10  Cush.  488;  Wyer  i7. 
Dorchester,  etc..  Bank,  11  Cush.  51;  Spooner  v.  Holmes,  102  Mass.  503; 
Smith  V.  Livingston,  111  Mass.  342;  Freeman's  Nat.  Bank  v.  Savery,  127 
Mass.  75;  Carroll  v.  Hayward,  124  Mass.  120;  Stimson  v.  Whitney,  130 
Mass.  591;  Kellogg  v.  Curtis,  69  Me.  212;  Farrell  v.  Lovett,  68  Me.  326; 
Welsh  V.  Sage,  47  N.  Y.  147;  Birdsall  v.  Russell,  29  N.  Y.  249;  Magee  v. 
Badger,  34  N.  Y.  247;  Belmont  v.  Hoge,  35  N.  Y.  67;  Seybel  v.  Nat.  Cur- 
rency Bank,  54  N.  Y.  288;  Hamilton  v.  Vought,  34  N.  J.  L.  190;  Brush  v. 
Scribner,  11  Conn.  388;  Craft's  App.,  42  Conn.  146;  Rowland  v.  Fowler, 
47  Conn.  347;  Plielan  v.  Moss,  67  Pa.  St.  62;  McSparran  v.  Neely,  91  Pa. 
St.  17;  Ellicott  v.  Martin,  6  Md.  509;  Commercial,  etc.,  Nat.  Bank  w. 
First  Nat.  Bank,  30  Md.  11;  Maitland  v.  Citizen's  Nat.  Bank,  40  Md.  540; 
Citizens'  Nat.  Bank  v.  Hooper,  47  Md.  88;  Frank  v.  Lilienfeld,  33  Gratt. 
390;  Witte  v.  Williams,  8  S.  C.  290;  Walker  v.  Kee,  14  S.  C.  142;  Gre- 
naux  V.  Wheeler,  6  Tex.  526;  Houry  v.  Eppinger,  34  Mich.  29;  Johnson 
V.  Way,  27  Ohio  St.  374;  Spreeves  v.  Allen,  79  HI.  553 ;  Comstock  v.  Han- 
nah, 76  111.  530;  Murray  v.  Beckwith,  81  HI.  43;  Edwards  v.  Thomas,  66 
Mo.  483;  Gage  v.  Sharp,  24  Iowa,  19;  Lake  v.  Reed,  29  Iowa,  258;  Pond 
V.  Waterloo  Ag.  Works,  50  Iowa,  600;  Kelley  v.  Whitney,  45  Wis.  110. 
But  see  Skidmore  v.  Clark,  47  Conn.  20,  in  respect  to  the  purchaser's 
suspicions  being  evidence  of  knowledge  of  fraud. 

491 


§    289  THE    RIGHTS    OF    KONA    FIDE    HOLDERS.        [CH.  XIV. 

value  to  the  coiumercial  world.  That  this  is  the  feeling 
of  merchants  and  bankers  is  fully  attested  by  the  fact  that 
LordKenyon's  ruling  is  now  followed  in  all  the  great  com- 
mercial States  of  the  Union.' 

1  The  following  is  a  valuable  criticism  of  the  two  opposing  doctrines, 
made  by  Beasley,  C.  J.,  in  Hamilton  v.  Vought,  34  N.  .J.  L.  187:  "From 
this  brief  review  of  the  cases,  I  thinli  it  may  be  safely  said  that  the  doc- 
trine introduced  by  Lord  Tenterden  stands,  at  the  present  moment, 
marked  with  the  disapproval  of  the  higliest  judicial  authority.  Nor  does 
sucli  disapproval  rest  upon  merely  speculative  grounds.  That  doctrine 
Avas  put  in  practice  for  a  course  of  years,  and  it  was  thus,  from  experi- 
ence, found  to  be  inconsistent  with  true  commercial  policy.  Its  defect  — 
a  great  defect,  as  I  think  —  was,  tliat  it  provided  nothing  like  a  criterion 
on  which  a  verdict  was  to  be  based.  The  rule  was,  that  to  defeat  the 
note,  circumstances  must  be  shown  of  so  suspicious  a  character  that 
they  would  put  a  man  of  ordinary  prudence  on  inquiiy ;  and  by  force  of 
such  a  rule  it  is  obvious  every  case  possessed  of  unusual  incidents  would, 
of  necessity,  pass  under  the  uncontrolled  discretion  of  a  jury.  An  in- 
cident of  the  transaction  from  which  any  suspicion  could  arise  was  suf- 
ficient to  take  the  case  out  of  the  control  of  the  court.  There  was  no 
judicial  standard  by  which  suspicious  circumstances  could  be  measured 
before  committing  them  to  the  jury.  And  it  is  precisely  this  want  which 
the  modern  rule  supplies.  When  mala  fides  is  the  point  of  inquiry,  sus- 
picious circumstances  must  be  of  a  substantial  character,  and  if  such 
circumstances  do  not  appear,  the  court  can  arrest  the  inquiry.  Under 
the  former  practice,  circumstances  of  slight  suspicion  would  take  the 
case  to  the  jury;  under  the  present  rule,  the  circumstances  must  be 
strong,  so  that  bad  faith  can  be  reasonably  inferred.  Thus  the  subject 
has  passed  from  the  indefinite  to  the  comparatively  tangible.  From  a 
mere  matter  of  fact,  the  question,  to  some  extent,  has  become  one 
of  law.  I  cannot  doubt,  when  we  recollect  that  inquiries  of  this 
nature  always  attend  that  class  of  cases  where  judgments  are  sought 
against  innocent  and  unfortunate  parties,  that  the  change  is  most  bene- 
ficial. All  experience  has  shown  how  hard  it  is  to  prevent  juries  from 
seizing  on  the  slightest  circumstance  to  avoid  giving  a  verdict  against 
the  maker  of  a  note  which  had  been  obtained  by  fraud  or  theft.  To  pre- 
serve the  negotiability  of  commercial  paper  and  guard  the  interests  of 
trade,  it  is  absolutely  necessary  tliat  la-rge  power  should  be  placed  in  the 
judicial  hand  when  the  question  arises  as  to  Avhat  facts  are  sufficient  to 
defeat  the  claim  of  tlie  holder  of  a  note  or  bill  which  has  been  taken  be- 
fore maturity,  and  for  which  value  has  been  pai'd.  It  is  only  in  this 
mode  that  the  requisite  stability  in  transactions  of  this  kind  can  be  ob- 
tained. 

492 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    291 

§  290.  Valuable  consideration  must  be  paid  by  bona 
fide  holder.  —  In  order  that  one  may  claim  to  be  a  bona 
Jide  holder  of  a  negotiable  instrument,  he  must  show  that 
he  has  paid  a  valuable  consideration  for  its  transfer  to  him. 
The  language  used,  in  describing  the  character  of  the  con- 
sideration,  varies  somewhat,^  but  there  is  a  consensus  of 
opinion  that  it  must  at  least  be  a  substantial,  as  contrasted 
Avith  a  nominal,  consideration.  It  must  have  value.  It  is 
hardly  necessary  to  say  thfit  the  so-called  good  considera- 
tion, natural  love  and  affection,  is  not  sufficient  to  make  the 
purchaser  of  a  negotiable  instrument  a  bona  fide  holder. 

But  a  substantial  consideration  may  be  less  than  the  face 
value  of  a  commercial  instrument,  and  yet  not  be  less  than 
its  market  value.  It  is  not  an  unfrequent  occurrence,  that 
such  an  instrument  is  sold  on  the  market  for  less  than  its 
face  value.  The  difference  between  the  price  paid  and  the 
face  value  gives  rise  to  the  consideration  of  several  very 
difficult  questions,  arising  out  of  the  failure  of  some  courts 
to  appreciate  fully  that  the  sale  and  transfer  of  a  negotiable 
instrument  differs,  or  should  differ,  in  no  respect  from  the 
sale  and  transfer  of  any  other  personal  property,  so  far  as 
the  price  it  will  bring  on  the  market  is  concerned,  it  being 
neither  more  nor  less  than  what  it  is  worth  on  the  market. 
The  questions  to  be  discussed  in  this  connection  are, — 

(1.)  What  insufficiency  of  price  will  give  notice  of 
fraud. 

(2.)  Is  an  indorsement  or  transfer  usurious,  which  is 
made  for  a  sum  less  than  the  face  value  with  legal  discount. 

(3.)  What  is  the  amount  of  recovery  against  the  indorser 
and  maker  on  such  an  indorsement. 

§  291.  When  price  conveys  notice  of  fraud.  — It  is  said 
that  inadequacy  of  the    price  paid  for  a  negotiable  paper 

^  See  Golsmicl  v.   Lewis  Co.  Bank,  12   Barb.  410;  Gould  v-.  Segee,  5. 

Duer,  270. 

493 


§    2\)l  THE    RIGHTS    OF    BONA    FIDE    HOLDERS.       [CH.  XIV. 

may  be  so  gross,  jis  to  justify  the  conclusion  that  the  pur- 
chaser is  charged  with  notice  of  a  fraudulent  or  defective 
title  on  the  part  of  the  vendor.  And  it  has  been  held  that 
there  was  constructive  notice  of  fraud  or  of  some  other 
equally  effective  defense  to  the  paper,  where  the  purchaser 
paid  $125  for  a  note  of  $3.'5.'^.-3.3,i  $50  for  a  note  of  $300,2 
$5  for  a  note  of  $300.'^  On  the  other  hand,  it  has  been 
held  that  the  i)urchaser  of  a  commercial  instrument  was  a 
holder  for  value,  and  hence  took  it  free  from  equitable  de- 
fenses, where  he  paid  $100  for  a  note  of  $250,*  $50  for  a 
note  of  $100,3  or  $1,250  for  a  note  of  $2,500.« 

It  is  certain  that  a  purely  nominal  consideration  would 
not  make  the  purchaser  a  holder  for  value.  And  it  may  be 
stated  with  safety,  subject  to  an  explanation  of  terms,  that 
an  inadequate  price  always  puts  the  person  upon  his  inquiry,^ 
and    may,  certainly    along    with   other  suspicious  circum- 

1  Hunt  V.  Sandford,  6  Yerg.  387. 

2  Gould  V.  Stevens,  43  Vt.  125. 

3  Dewltt  V.  Perkins,  22  Wis.  473.  Dixon,  C.  J.:  "The  buying  of  a 
uoteagainst  a  solvent  maker,  the  purchaser  knowing  him  to  be  such,  for 
a  mer^  nominal  consideration,  is  very  stron-^,  if  not  conclusive,  evidence 
of  mala  fides.  It  is  constructive  notice  of  the  iuvalidity  of  the  note  in 
the  hands  of  the  seller,  such  as  to  put  the  purchaser  upon  inquiry,  which 
if  he  fails  to  make  he  acts  at  his  peril."  See  also  Lay  v.  Wissraan,  36 
Iowa,  305;  Coliger  i;.  Francis,  58  Tenn.  423;  Petty  v.  Hinman,  2  Humph. 
102;  Holraan  v.  Ilobsou,  8  Humph.  107;  Auteu  v.  Gruner,  90111.  300. 

*  Phelan  v.  Moss,  G7  Pa.  St.  59, 

5  Cannon  i\  Canfleld,  11  Neb.  506. 

^  Bailey  t'  Smith,  14  Ohio  St.  402,  Rauney,  J.:  "There  is  very  little 
difficulty  in  saying  that  the  rule  does  not  require  the  full  face  of  the 
paper  lo  be  paid.  No  decision  to  that  effect  has  ever  been,  made,  and  tlie 
strongest  expressions  cHstomarily  used  do  not  import  anything  more 
than  that  tlio  holder  must  have  given  for  the  paper  what  it  was  reason- 
ably and  fairly  worth.  To  hold  otherwise  would  be  to  deprive  all  paper, 
for  any  cause  not  worth  its  face,  of  one  of  the  most  essential  and 
valuable  incidents  of  negotiability,  and  most  effectually  to  stop  its  cir- 
culation. A  moment's  reflection  will  satisfy  any  one  how  deeply  and 
disastrously  such  a  holding  would  affect  the  busiuess  and  commerce  of 
the  country." 

^  Autea  V.  Gruner,  90  ill.  3U0. 
404 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    292 

stances,  charge  him  with  notice  of  existing  defenses.'  But 
every  price  is  not  inadequate,  which  is  less  than  the  face 
value  of  the  instrument  purchased.  Commercial  paper  of 
every  kind  has  its  market  value,  rising  above  or  below  par, 
according  to  the  financial  credit  of  the  persons  liable  on  it. 
Only  that  price  is  inadequate  which  falls  below  the  market 
value,  and  if  the  disproportion  between  the  price  paid  and 
the  market  value  be  very  great,  it  is  fair  and  just  to  pre- 
sume that  the  purchaser  had  reasonable  grounds  for  sus- 
pecting fraud  or  some  other  defense  to  the  instrument. 
Each  case  must  therefore  stand  on  its  own  merits.  One- 
half  the  face  value  may  under  some  circumstances  be  a 
grossly  inadequate  price;  while  under  different  circum- 
stances it  may  be  greatly  in  excess  of  what  the  instrument 
is  worth  on  the  market. 

§  292.  Indorsement  for  less  than  face  value,  when 
usurious.  —  As  has  already  been  explained,^  there  are 
statutes  in  most  of  'the  States  declaring  it  to  be  illegal  to 
exact  more  than  a  certain  rate  of  interest  for  loans  of 
money,  and  imposing  various  penalties  for  a  violation  of 
the  statute,  and  in  some  States  declaring  the  instrument 
founded  on  an  usurious  transaction  to  be  absolutely  void, 
even  in  the  hands  of  bona  fide  holders.^  It  is  clear,  if  in 
the  original  issue  of  a  negotiable  instrument  a  sum  of  money 
was  loaned  at  an  usurious  rate  of  interest,  even  though  it 
assumed  the  form  of  discount,  the  transaction  would  be 
usurious  and  the  instrument  would  be  void,  at  least  be- 
tween the  original  parties.  And  it  does  not  matter  how 
the  transaction  might  be  managed,  for  the  purpose  of  con- 
cealing the  usurious  character;  if  the  person,  who  receives 
the  paper  by  indorsement,  knows  that  the  indorser  is  not  a 

'  Chouteau  v.  Allen,  70  Mo.  341. 

=  See  ante,  §  19G. 

3  See  ante,  §§  196,  108. 

49.5 


§    202  THK    KIGHTS    OF    BONA    TIDK    HOLDfiUS.        [cil.  XIV. 

holder  for  value,  that  it  is  accommodatiou  paper  as  to  him; 
ami  the  indorsee  pays  him  a  price  which  would  be  an  usuri- 
ous rate  of  discount,  such  a  transaction  would  certainly  be 
in  violation  of  the  usury  laws,  and  the  indorsee  would  sub- 
ject himself  to  the  penalties  of  those  laws.^  Many  author- 
ities, however,  maintain  that  such  a  transaction  is  usurious, 
even  though  the  holder  does  not  know  that  there  is  no  prior 
holder  for  value. ^  But  this  is  certainly  in  contradiction  of 
the  accepted  principle  in  the  law  of  commercial  paper,  that 
a  purchaser  of  such  a  paper  has  a  right  to  assume  that  the 
relation  of  the  parties  to  each  other  is  just  as  it  is  indicated 
on  the  face  of  the  paper. ^     Such  a  person  is  certainly  a  bona 


^  Veazie  Bauk  v.  Paulk,  4:0  Me.  109;  Whitworth  v.  Adams,  5  Rand.  333; 
May  V.  Campbell,  7  Humph.  450;  Richardson  v.  Scobee,  10  B.  Mon.  12. 
And  if  any  one  else  but  the  payee  or  last  indorsee  offers  the  note  for  ne- 
gotiation, that  fact  in  itself  is  notice  to  the  purchaser  that  the  prior  in- 
dorsements were  for  accommodatiou.  Wallace  v.  Branch  Bank,  1  Ala. 
565;  Mauldin  v.  Branch  Bank,  2  Ala.  513;  Whitworth  v.  Adams,  5  Rand. 
411;  Overton  u.  Hardin,  (5  Cold.  37G;  Hendrie  v.  Berkowitz,  37  Cal.  113. 
Anaccepted  bill,  when  presented  by  the  acceptor,  would  stand  ou  the  same 
footing  witli  a  purchaser,  as  the  note  presented  by  the  maker  (Salt- 
marsh  V.  Planters,  etc..  Bank,  14:  Ala.  6G8;  Carlisle  v.  Hill,  IG  Ala.  405), 
but  not  when  presented  by  the  drawer,  on  the  ground  that  tlie  bill  repre- 
sents a  claim  by  the  drawer  against  the  drawee  and  acceptor,  and  the 
transfer  of  it  by  the  drawer  represents  not  a  loan  of  money,  but  the  sale 
of  an  existing  debt.  Lloyd  ??.  Keach,  2  Conn.  175.  Co»«ra,  Lowes  v. 
Mazaredo,  1  Stark.  (3  E.  C.  L.  R.)  385.  See  also  King  v.  Ridge,  4  Price, 
50;  copied  in  5  Rand.  617;  Whitworth  v.  Adams,  5  Rand.  333;  Noble  v. 
Walker,  17  Ala.  456. 

2  Munn  r.  Commission  Co.;  15  Johns,  53;  Powell  v.  Waters,  17  Johns. 
177;  s.  c.  8  Cow.  GCD;  Sweet  c.  Chapman,  14  N.  Y.  S.  C.  (7  Hun)  57G; 
Hall  V.  Wilson,  16  Barb.  548;  Bossange  v.  Ross,  29  Barb.  576;  Williams 
V.  Storm,  2  Duer,  52;  Catlin  v.  Gunter,  6  Kern.  368;  Clark  v.  Loomis,  5 
Duer,  468;  Eastman  w.  Shaw,  65  N.  Y.  522;  Van  Schaack  v.  Stafford,  12 
Pick.  565;  Belden  v.  Lamb,  17  Conn.  452;  Bock  t?.  Lauman,  24  Pa.  St. 
448;  Corcoran  v.  Powers,  6  Ohio  St.  19:  Fleming  y.  Mulligan,  2  McCord, 
173;  Simpson  v.  FuUenweider,  12  Ired.  L.  335;  Cassebeer  v.  Kalbfleisch, 
18  N.  Y.  S.  C.  (11  Hun)  123. 

^  Hoge  V.  Lansing,  35  N.  Y.    136;   Central  Bank  v.  Haramett,  50  N.  Y. 
158;  Ahern  v.  Goodspeed,  16  N.  Y.  S.  C.  Cd  Hun')  265 
496 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    292 

Jide  holder,  if  not  a  holder  for  value.  If  the  transaction 
is  usurious  as  to  him,  it  is  necessary  to  hold  that  the  in- 
dorsement of  commercial  paper  for  a  price  that  would  be 
an  usurious  discount  is  in  itself  usurious,  however  free 
from  the  taint  of  usury  the  original  transaction  may  be. 

Whether  an  indorsement  is  usurious,  when  made  by  a 
bona  fide  holder  for  a  sum,  that  would  be  an  usurious  dis- 
count, is  variously  decided  by  the  courts.  A  few  of  the 
courts  maintain  that  it  is  an  usurious  transaction  and  so  far 
void,  that  the  indorsee  gets  no  title  to  the  instrument,  not 
even  the  right  to  sue  the  maker,  and  prior  indorsers.^  The 
.second  view  taken  of  this  matter,  is  that  the  indorsement  is 
usurious,  but  it  only  avoids  the  liability  of  the  indorser, 
as  a  guarantor  of  the  honor  of  the  instrument,  and  does 
not  interfere  with  the  transfer  of  the  instrument,  and 
therewith  the  liabilities  of  the  maker  and  prior  indorsers. 
The  indorsement  so  far  as  it  operates  as  a  transfer  of  the 
paper,  constitutes  a  sale  and  not  a  loan.^     This  view  does 

1  Whitworthf.  Adams,  5  Rand.  419,  Cabell,  J.,  saying:  "If  the  note 
had  passed  from  the  payee  to  the  person  who  paid  the  money  on  a  con- 
tract of  indorsement,  by  which  the  payee  received  for  the  bill  less  than 
its  nominal  amount,  deducting  legal  interest,  I  should  be  decidedly  of 
opinion  that  the  indorsement  was  usurious  and  void,  on  the  ground 
mentioned  in  Lowes  v.  Mazaredo,  1  Stark.  385;  Comyn's  Usury,  181, 
that  *  eveiy  indorsement  is  considered  in  law  as  a  new  delivei-y.'  "  See 
Nichols  V.  Pearson,  7  Pot.  103;  Lloyd  v.  Scott,  4  Pet.  205. 

2  Ballinger  v.  Edwards,  4  Ired.  Eq.  449;  Ray  v.  McMillan,  2  Jones  L. 
227;  Byuum  v.  Rogers,  4  Jones  L.  399;  McElwee  v.  Collins,  4  Dev.  & 
B.  210;  Knights  v.  Putnam,  3  Pick.  185,  Wilde,  J.,  saying:  "It  is  mani- 
fest that  the  maker  of  a  note  is  not  affected  by  a  usurious  agreement 
between  the  indorser  and  indorsee.  He  is  liable  on  his  contract,  and  it 
is  Immaterial  to  him  whether  the  action  be  brought  in  the  name  of  the 
indorser,  or  that  of  the  indorsee.  But  I  hold  further,  that  the  transfer 
of  a  note  on  a  usurious  consideration  is  neither  void  nor  voidable.  So 
far  as  the  indorsement  operates  as  a  transfer  of  the  note,  it  is  an  exe- 
cuted contract,  and  the  statute  against  xisury  is  not  applicable.  It  only 
applies  to  the  implied  promise  or  guaranty  of  the  indorser,  which  being 
an  executory  contract,  may  be  avoided.  But  in  no  case  can  an  executed 
contract  be  set  aside  on  the  plea  of  usury."     Collier  v.  Nevill,  3  Dev. 

32  497 


§    202  THE    RIGHTS    OF    BONA    FIDE    HOLDERS.        [CH.  XIV. 

not  conflict  "with  what  seem.s  to  be  tlie  universal  opinion 
that  it  is  not  usurious  for  tlie  holder  to  bargain  for  the 
transfer  of  a  negotiable  instrument  at  a  price,  that  would 
be  an  illegal  rate  of  discount  in  the  case  of  a  loan,  where 
the  title  can  pass  without  indorsement.  Such  a  transaction 
appears  to  be  universally  held  to  be  the  sale  of  a  chattel, 
and  in  no  sense  a  loan.^  It  is  also  held  to  be  no  usurious 
transaction,  if  the  indorsement  is  "  without  recourse."  ^  Of 
course,  such  a  transaction  may  in  fact  be  an  usurious  loan, 
concealed  under  the  form  of  a  sale,  and  if  it  be  so,  the 
transaction  will  come  under  the  penalty  of  the  laws  against 
usury.^  But  the  usurious  character  of  such  a  transaction 
must  be  proved.     It  will  not  be  presumed. 

The  third  view  is  that  not  only  does  such  an  indorse- 
ment pass  the  title  to  the  instrument,  together  with  the 
right  to  sue  all  the  prior  indorsers,  but  that  the  indorsement 
itself  is  in  no  sense  "  a  loan  or  forbearance  of  money." 
These  authorities  hold  that  the  indorsement,  so  far  as  it 

31,  Ruffiu,  J.,  saying:  "The  discounting  of  a  bill  or  bond  and  taking 
the  general  indorsement  of  the  holder,  does  ex  vi  termini  constitute  a 
loan;  and  if  the  rate  of  discount  exceed  that  fixed  by  statute,  it  is  a 
usurious  loan.  *  *  *  But  upon  the  strength  of  the  authorities,  and 
the  opinion  heretofore  generally  received  by  tlie  country  at  large  and 
the  profession,  the  court  feels  constrained  to  decide  that  the  defendants 
cannot  avail  themselves  of  any  intermediate  illegality.  The  bond  was 
available  between  the  obligor  and  obligees.  The  former  is  not  privy  to 
the  usurious  agreement  between  the  latter  and  the  present  holder."  See, 
also,  Cowlesi?.  McVickar,  3  Wis.  725;  Armstrong  v.  Gibson,  31  Wis.  61. 

1  Nichols  U.Pearson,  7  Pet.  100;  Freeman  v.  Britton,  2  Har.  209; 
Cowlesi;.  McVickar,  3  Wis.  731;  Newman  v.  Williams,  29  Miss.  222. 
This  is  likewise  the  case  where  the  maker's  agent  negotiates  the  paper, 
provided  the  purchaser  does  not  know  of  this  confidential  relation  exist- 
ing between  the  maker  and  the  person  who  offers  the  paper  for  sale. 
Gaul  V.  Willis,  26  Pa.  St.  261;  Whitworth  v.  Adams,  5  Rand.  333;  Taylor 
V.  Bruce,  Gilmer,  42;   Gimmi  v.  CuUen,  20  Gratt.  439. 

2  Freeman  v.  Britton,  2  Har.  191 ;  Durant  v.  Banta,  3  Dutch.  630. 

3  Levy  V.  Gadsby,  3  Cranch,  180;  Gaither  v.  Farmers',  etc.,  Bank,  7 
Pet.  37;  Nichols  v.  Pearson,  7  Pet.  108;  Newman  v.  Williams,  29  Miss. 
212. 

498 


CH.  XIV. 1       THE    RIGHTS    OF    BONA    FIDE    HOLDEES.  §    292 

imposes  upon  the  indorser  the  liability  of  a  guarantor  of 
the  payment  of  the  paper,  is  not  a  loan  or  forbearance  of 
money  within  the  usury  laws,  because  the  obligation  is 
conditional,  differing  in  no  respect  from  the  warranty  of 
quality  that  frequently  accompanies  the  sale  of  a  chattel.^ 
There  cannot  be  much  doubt  as  to  the  correctness  of  this 
last  view.  I  do  not  see  how  such  an  indorsement  can  be 
considered  a  loan  within  the  purview  of  the  usury  laws ; 
but  it  nmst  be  observed  that  there  is  no  practical  or  sub- 
stantial difference  between  a  loan  of  money  and  the  sale  of 
any  other  commodity,  except  in  the  character  of  the  com- 
modity itself.  A  loan  of  money  is  just  as  much  a  sale  and 
transfer  of  that  article  of  property,  as  the  sale  of  a  house 
would  be ;  and  neither  article  would  bring  any  higher  price 
on  the  market  than  its  market  value,  plus  any  additional 
sum  that  the  vendor  might  ask  as  a  compensation  for  any 
risk  of  non-payment  he  might  run  in  any  particular  case. 
The  difficulty  of  ascertaining  the  limitations  upon  the 
proper  application  of  the  usury  laws  lies  in  the  economical 

1  1  Daniel's  Negot.  Inst.,  §  768:  "  Loans  of  money  to  be  retm*ned  with 
excessive  interest  are  plainly  contradistinguished  from  amounts  paid  for 
secimties  which  are  transferred  in  the  usual  course  of  business  by  in- 
dorsement; and  as  the  statutes  against  usury  are  to  be  strictly  construed 
they  do  not  seem  to  us  to  have  contemplated  commercial  transactions  of 
this  kind,  which  partake  rather  of  the  nature  of  sales  accompanied  by  a 
peculiar  and  conditional  warranty."  See  to  same  effect,  1  Parsons'  N. 
&  B.  429,  430;  Munnu.  Commission  Co.,  15  Johns.  44;  Cram  v.  Hend- 
ricks, 7  Wend.  569;  Brown  v.  Mott,  7  Johns.  360;  Braman  v.  Hess,  13 
Johns.  52;  French  v.  Griudley,  15 Me.  163;  Lane  v.  Steward,  20  Me.  104; 
Farmer  v.  Sewall,  16  Me.  456 ;  Brock  v.  Thompson,  1  Bailey  (S.  C.)  L. 
329;  Hutchins  v.  McCann,  7  Port.  99;  Noble  v.  Walker,  32  Ala.  456; 
Lloyd  V.  Keach,  2  Conn.  175;  Nichols  v.  Pearson,  7  Pet.  109;  Gaul  u. 
"Willis,  26  Pa.  St.  261;  Moore  v.  Baird,  30  Pa.  St.  139;  Roark  v.  Turner, 
29  Ga.  458;  Newman  v.  Williams,  29  Miss.  223;  State  Bank  w.  Coquillard, 
6  Ind.  232;  Stevenson  v.  Unkefer,  14  III.  105;  Coge  v.  Palmer,  16  Cal. 
158;  Brown  v.'Peniield,  36  N.  Y.  473;  City  Bank  of  New  Haven  v.  Per- 
kins, 29  N.  Y.  554;  National  Bank  u.  Green,  33  Iowa,  140;  Fov'^ler  v. 
Strickland,  107  Mass.  552. 

499 


§    2i'3  THE    RIGHTS    OF    UONA    FIDE    HOLDERS.        [CH.  XIV. 

error  of  such  laws.  They  are  attempts  to  regulate  the 
price  of  a  coiumodity,  instead  of  leaving  it  to  the  operations, 
of  the  law  of  supply  and  demand.  Every  construction  of 
these  laws  should  be  favored,  which  restricts  their  sphere 
of  operation. 

§  293.  The  amount  of  recovery  against  luaker  and  in- 
clorser.  —  It  seems  to  be  generally  held  in  this  country,  that 
if  the  original  transaction  was  not  tainted  with  fraud,  the 
bona  fide  holder  can  recover  the  face  value  of  the  paper, 
whatever  price  he  may  have  paid  for  its  transfer  to  him. 
This  is  uniformly  the  rule,  where  a  full  consideration  was 
paid  by  the  payee. ^  But  the  authorities  are  not  agreed 
what  should  be  the  amount  of  recovery,  where  the  instru- 
ment is  subject  to  equitable  defenses  in  the  hands  of  the 
original  parties.  Some  of  the  cases  maintain  that  the 
holder  can  only  recover  what  he  paid  for  the  instrument, 
as  it  is  not  the  purpose  of  the  principle  of  negotiability  to 
do  more  than  to  indemnify  the  bona  fide  holder  for  any  loss 
he  may  sustain  by  reason  of  the  avoidance  of  the  maker's 
obligation. 2     But,  on   the  other  hand,  there  are  some  emi- 

1  Lee  V.  Pile.  37  Ind.  107. 

2  Huff  17.  Wagner,  C3  Barb.  230,  Talcott,  J. :  "  The  plaintiff  had  a  ver- 
dict under  the  instruction  of  the  court  that  he  was  a  bona  Jide  holder, 
and  was  entitled  to  recover  on  the  note,  notwithstanding  the  fraud  prac- 
ticed by  Ferguson  in  obtaining  the  note.  The  special  terra  granted  a 
new  trial  upon  the  exception  to  the  ruling  as  to  the  admission  of  the 
evidence,  and  upon  the  principle  that  a  bona  Jide  holder  of  commercial 
paper,  to  which,  as  between  maker  and  payee,  there  is  a  good  defense,  is 
entitled  to  be  protected  only  to  the  extent  of  the  value  which  he  has 
paid.  This,  I  think,  is  correct.  The  protection  of  the  holder  for  value 
in  such  cases,  as  in  other  cases,  where  the  law  protects  bona  fide  pur- 
chasers against  latent  claims,  is  founded  upon  the  idea  of  protecting 
such  bona  fide  purchaser  for  value  against  any  possible  loss.  And  this 
is  the  precise  reason  why  a  bona  fide  holder  of  such  paper,  which  has 
been  transferred  to  him  to  secure  an  antecedent  debt,  cannot  recover 
against  the  party  who  has  been  defrauded,  namely,  that  he  has  lost 
nothing  by  his  reliance  upon  the  face  of   the  paper."     Todd  v.  Shel- 

500 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    293 

nent  authorities,  which  maintain  that  the  holder  for  value  is 
under  all  circumstances  entitled  to  recover  the  face  value 
of  the  maker,  whatever  defense  might  be  set  up  against  the 
original  payee. ^     Where  a  holder  receives  notice  before  he 

bourne,  15  N.  Y.  S.  C.  (8  Hun)  512,  Daniels,  J.,  quoting  many  authori- 
ties :  '^  These  authorities  fully  sustain  that  proposition  (the  one  stated 
above  in  the  text) ,  and  they  are  in  no  sense  in  conflict  with  the  rule  that 
allows  a  recovery  for  the  full  amount  of  paper  improperly  negotiated 
when  an  adequate  consideration  has  been  advanced  in  good  faitli  upon 
it.  The  paper  derives  its  vitality  wholly  from  the  circumstance  that  it 
has  been  obtained  for  value  without  notice  by  an  innocent  purchaser. 
For  his  protection  it  is  maintained  in  his  hands  as  a  legal  obligation. 
The  object  of  the  law  is  to  save  him  from  loss ;  and  to  do  that  a  recovery 
of  the  amount  he  may  have  advanced  is  all  that  can  be  required.  To  go 
beyond  it  would  be  inequitable  and  unjust  to  the  party  after  that,  entitled 
to  be  protected  from  unnecessary  loss."  See  also  to  same  effect, 
Edwards  v.  Jones,  7  C.  &  P.  633;  s.  c.  2  M.  &  W.  413;  Jones  v.  Hibbard, 
2  Stark.  204.;  Wiffer  v.  Roberts,  1  Esp.  261;  Simpson  v.  Clark,  2  C.  M. 
&  R.  342;  Stoddard  ?;.  Kimball,  6  Cush.  469;  Chicopee  Bank  v.  Chapin,  8 
Me't.  40;  Hubbard  v.  Chapin,  2  Allen,  328;  Williams  v.  Smith,  2  Hill,  301 ; 
Gordons.  Boppe,  55  N.  Y.  665;  Brown  v.  Mott  7  Johns.  361;  Clark  v. 
Sisson,  22  N.  Y.  312;  Bossange  v.  Ross,  29  Barb.  576;  Holcomb  v. 
Wyckoff,  6  Vroom,  35;  Allaire  v.  Hartshorne,  1  Zab.  665;  Duncan  u. 
Gilbert,  5  Dutch.  527;  Bethune  v.  McCrary,  8  Ga.  114;  Exchange  Bank 
V.  Butner,  60  Ga.  654;  Grant  v.  Kidwell,  30  Mo.  455;  Petty  «.  Hannum, 
2  Humph.  102;  Holeraan  u.  Hobson,  8  Humph.  127;  Bailey  v.  Smith,  14 
Ohio  St.  402;  DeWitt  v.  Perkins,  22  Wis.  473;  Colliger  u.  Francis,  2 
Baxt.  422. 

1  Lay  V.  Wissman,  36  Iowa,  305,  Day,  J. ;  "  The  defense  that  a  note 
has  been  obtained  fraudulently,  or  without  consideration,  does  not  avail 
against  a  bona  fide  holder.  If,  however,  the  recovery  of  such  holder  may 
be  limited  to  the  amount  paid,  it  is  apparent  that  the  defense  does  avail, 
for  without  such  defense  he  would  recover  the  amount  evidenced  by  the 
note."  Winters  v.  Peck,  14  Mich.  296;  Campbell,  J.:  "The  maker  of  a 
note  has  no  concern  with  the  amount  paid  for  it  by  a  bona  fide  holder.  " 
Smith  V.  Hiscock,  14  Me.  449;  Schoen  v.  Haughton,  50  Cal.  528;  R.  R. 
Companies  v.  Schulte,  103  U.  S.  118,  145;  Cromwell  v.  County  of  Sac,  96 
U.  S.  60,  Field,  J. :  "  The  plaintiff,  therefore,  holds  the  bonds  aud  the 
subsequent  coupons  as  his  vendor  held  them,  freed  from  all  infirmities 
attending  their  original  issue.  Nor  is  he  limited  iu  his  recovery  upon 
them,  or  upon  the  other  two  bonds,  as  contended  by  counsel  for  the 
county,  to  the  amount  he  paid  his  vendor.  Clark  had  given  full  value  for 
those  he  ^purchased,  and  could  have  recovered  their  amount  from  the 

501 


§    293  THE    RIGHTS    OF    liOXA    PMDE    HOLDERS.        [ciI.   XIV. 

has  paid  over  the  consideration  in  whole  or  in  part,  he  i>;  a 
bona  fide  holder  only  to  the  amount  he  had  already  paid, 
and  not  to  the  amount  which  he  paid  out  afterwards.^ 

The  authorities  also  differ  as  to  the  amount  of  the  re- 
covery, where  the  primary  obligor  signed  as  an  accommo- 
dation, instead  of  for  value,  and  that  fact  is  known  to  the 
indorsee  who  pays  less  than  the  face  value.  It  is  held  by 
some  authorities  that  the  indorsee  can  only  recover  the 
amount   he   paid  for  the   paper. ^     But  there  are  other  au- 

county,  and  his  right  passed  to  his  vendee.  But  independently  of  the 
fact  of  sucli  full  payment,  we  are  of  opinion  that  a  purchaser  of  a  nego- 
tiable security  before  maturity,  in  cases  where  he  is  not  pei-sonally 
chargeable  with  fraud,  is  entitled  to  recover  its  full  amount  against  its 
maker,  though  he  may  have  paid  less  than  its  par  value,  whatever  may 
have  been  its  original  infirmity.  We  are  aware  of  numerous  decisions 
in  conflict  with  this  view  of  the  law;  but  we  think  the  sounder  rule,  and 
the  one  in  consonance  with  the  common  understanding  and  usage  of 
commerce,  is  that  the  purchaser,  at  whatever  price,  takes  the  benefit  of 
the  entire  obligation  of  the  maker.  Public  securities,  and  those  of  pri- 
vate corporations,  are  constantly  fluctuating  in  price  in  the  market,  one 
day  being  above  par,  and  the  next  below  it,  and  often  passing  within 
short  periods  from  one-half  of  their  nominal  value  to  their  full  value 
Indeed,  all  sales  of  such  securities  are  made  with  reference  to  prices 
current  in  the  market,  and  not  with  reference  to  their  par  value.  It 
would  introduce,  therefore,  inconceivable  confusion  if  bona  fide  pur- 
chasers in  the  market  were  restricted  in  their  claims  upon  such  securi- 
ties to  the  sums  they  had  paid  for  them.  This  rule  in  no  respect 
infringes  upon  the  doctrine  that  one  who  makes  only  a  loan  upon  such 
paper,  or  takes  it  as  collateral  security  for  a  precedent  debt,  may  be 
limited  in  his  recovery  to  the  amount  advanced  or  secured. 

1  Dresser  v.  Mo.,  etc.,  R.  R.  Co.,  93  U.  S.  95;  Hubbard  v.  Chapin,  2 
Allen,  328;  Lay  v.  Wissman,  36  Iowa,  309;  Craudall  v.  Viekery,  45  Barb. 
156c 

'  2  Wiffen  V.  Roberts,  1  Esp.  261,  Lord  Keuyon,  C.  J. :  "  Where  a  bill 
of  exchange  is  given  for  money  really  due  from  the  drawee  to  the  drawer, 
or  is  drawn  in  the  regular  course  of  business  in  such  case  the  indorsee, 
though  he  has  notgiveu  to  the  indorser  the  full  amount  of  the  bill,  yet 
he  may  recover  the  whole,  and  be  the  holder  of  the  overplus  above  the 
sum  he  has  really  paid  to  the  use  of  the  indorsee;  but  where  the  bill  is 
an  accommodation  one,  and  that  known  to  the  indorsee,  and  he  pays  but 
part  of  the  amount,  in  such  case  he  cau  only  recover  the  sum  he  has 
502 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    293 

thorities  which  recoofiiize  the  rio^ht  of  the  holder  to  recover 
of  an  accommodation  party  the  face  value,  whatever 
amount  he  might  have  paid  for  it,  although  his  right  to  re- 
cover more  than  the  price  paid  is  denied  where  the  original 
transaction  was  illeo-al  or  fraudulent.^ 

As  has  been  already  explained,^  in  many  of  the  States, 
it  is  held  that  an  indorsement  for  a  sum,  so  far  less  than  the 
face  value  as  to  make  the  discount  excessive  of  that  allowed 
by  the  usury  laws,  is  usurious,  and  renders  void  the 
liability  of  the  indorser  as  a  guarantor.  But  in  most  of 
the  States,  the  transaction  is  held  to  be  not  usurious,  and 
that  the  indorser  is  liable  on  his  indorsement.  But  these 
courts  are  not  agreed  as  to  the  amount  of  recovery  against 
the  indorser  where  the  indorsee  pays  less  than  the  face 
value.  Some  of  these  courts,  while  maintaining  that  an  in- 
dorsement for  less  than  the  face  value  enables  the  indorsee 
to  recover  the  whole  amount  of  the  maker,  acceptor,  and 
prior  indorsers,  he  can  only  recover  of  the  immediate  in- 
dorser the    actual  consideration    that    passed  between  the 


actually  paid  for  the  bill;  and  if  the  plaintiff  in  this  case  was  entitled  to 
recover,  he  could  only  do  it  to  the  amount  of  £29,  the  sum  he  really  paid 
for  it."  See  also  Jones  u.  Hibbert,  2  Stark.  271;Holcorab  i?.  Wyckofif, 
35  N.  J,  L.  38;  Allaire  v.  Hartshorne;  1  Zab.  665;  Stoddard  v.  Kimball,  6 
Cush.  469. 

1  Daniels  v.  Wilson,  21  Minn.  530,  Berry,  J.:  ''The  familiar  general 
rule  is  that  an  indorsee  of  negotiable  paper,  for  value,  before  maturity, 
without  notice  of  any  infirmity,  takes  it  clear  of  all  equities  and  defenses 
between  antecedent  parties,  and  is,  of  course,  entitled  to  full  amount  of 
the  same,  according  to  its  tenor.  When  the  original  consideration  of 
the  paper  is  illegal  or  fraudulent,  or  it  is  taken  as  collateral  security,  and 
perhaps  in  some  other  instances,  an  exception  to  this  rule  has  been  rec- 
ognized, so  as  to  restrict  the  right  of  recovery  to  the  consideration 
actually  paid  by  the  indorsee,  or  to  the  amount  of  the  debt,  to  which  the 
paper  is  collateral.  The  defendant  contends  for  a  like  exception  in  this 
case,  in  which  it  appears  that  the  note  was  without  consideration,  and 
the  plaintiff  purchased  it  for  less  than  its  face.  But  in  our  opinion  no 
such  exception  is  admissible  upon  principle." 

2  See  ante,  §  292. 

503 


§    2i>4  THE    RIGHTS    OF    BONA    FIDE    HOLDERS.        [CII.  XIV. 

parties.*  But,  ou  the  other  huud,  it  is  held  by  some  other 
courts,  that  the  whole  amount  can  be  recovered  of  the  in- 
dorser,  whatever  ma}^  have  been  the  price  he  was  paid  for 
the  transfer  and  indorsement  of  the  paper.^ 

§  294.  Usual  course  of  business. — In  order  that  a 
bona  fide  holder  may  claim  protection  against  defenses, 
not  appearing  on  the  face  of  commercial  paper,  it  is  said 
that 'he  must  have  acquired  it  in  the  "  usual  course  of  bus- 
iness." This  phrase  is  said  to  mean  "  according  to  the 
usages  and  customs  of  commercial  transactions."  ^     When 


1  Munn  V.  Commission  Co.,  15  Johns.  44,  Spencer  J. :  "  The  drawer 
and  acceptor  in  a  suit  by  the  indorsee  have  nothing  to  do  with  the  con- 
sideration paid  for  the  bill  by  such  indorsee  to  the  drawer.  They  are 
bound  to  pay  the  bill;  but  as  respects  the  payee  and  first  indorsee, 
if  lie  be  sued  by  his  immediate  indorsee  it  will  be  competent  for  him 
to  sliow  tlie  real  consideration  paid;  and  if  it  be  less  than  the  face 
of  the  bill  and  the  legal  interest  for  the  time  the  bill  had  to  run,  then  he 
can  claim  to  have  the  diffei'ence  deducted."  Ingalls  ■??.  Lee,  9  Barb.  650, 
Parker,  J. :  "  It  is  now  settled  that  an  indorsee,  who  buys  a  note  at  less 
than  its  face,  can  recover  against  the  iudorser  no  more  than  the  sum 
for  which  he  bought  the  note  with  interest;  tliough  he  may  recover  the 
full  amount  of  the  note  against  thti  maker.  Whether  the  rule  thus  limit- 
ing the  recovery  would  apply  to  third  persons  who  indorse  for  the  accom- 
modation of  the  payee,  and  who  are  not  parties  to  the  transfer,  has  not 
been  decided.  *  *  *  I  think  the  rule  referred  to  applies  only  as  between 
the  parties  to  the  sale,  and  rests  upon  the  consideration  of  recovering 
back  the  consideration  paid."  See  also,  to  the  same  effect,  Cobb  v. 
Titus,  13 Barb.  47;  Cram  f.  Hendricks,  7  Wend.  5G9;  Brown  u.  Mott,  7 
Johns.  360;  Braman  v.  Hess,  13  Johns.  52;  Huff  i?.  Wagner,  63  Barb.  215; 
Harger  t?.  Wilson,  63  Barb.  237;  French  v.  Grindle,  15  Me.  1G3;  Farmer 
V.  Lewall,  16  Me.  456;  Lane  v.  Steward,  20  Me.  104;  Brock  v.  Thompson, 
1  Bailey  L.  329;  Hutchins  v.  McCann,  7  Port.  99;  Noble  v.  Walker,  32 
Ala.  456;  Stevenson  v.  Unkefer,  14  HI.  105;  Cagey.  Palmer,  16  Cal.  168; 
Mazuzan  v.  Mead,  21  Wend.  285. 

2  Lloyd  V.  Keach,  2  Conn.  175;  Durant  v.  Banta,  3  Dutch.  624;  Gaul  v. 
Willis,  26  Pa.  St.  261;  Moore  r.  Baird,  30  Pa.  St.  139;  State  Bank  u. 
Coquillard,  6  Ind.  232;  RoarktJ.  Turner,  29  Ga.  458;  National  Bank  of 
Michigan  t'.  Green,  33  Iowa,  141;  Newman  v.  Williams,  29  Miss.  223. 
See  Nichols  v.  Pearson,  7  Pet.  109. 

3  Kellogg  V.  Curtis,' 69  Me.  212,  Peters,  J.:     "The  purchase  by  an 

504 


CH.  XIV,]       THE    RIGHTS    OF    BONA    TIDE    HOLDERS.  §    294 

inquiry  is  made  after  the  details  of  the  question,  what  is 
the  meaning  of  these  terms,  it  is  ascertained  that  there  is 
some  doubt  as  to  the  limits  of  their  meauinoj.^  It  was  once 
doubted,  but  now  definitely  settled,  that  a  transfer  in 
settlement  of  a  pre-existing  debt  was  a  transaction  that 
occurs  "  in  the  usual  course  of  business."  ^  Receivers,  as- 
signees in  bankruptcy  and  under  the  insolvent  laws,  as 
well  as  assignees  for  the  benefit  of  creditors,  are  held  not 
to  receive  negotiable  paper,  "  in  the  usual  course  of  busi- 
ness.' '  ^  In  Iowa,  it  is  held  that  under  a  statute,  authorizinof 
a  sale  of  commercial  paper  under  execution,  the  transfer 
by  the  indorsement  of  the  sheriff  was  in  the  usual  course  of 

indorsee  must  be  '  iu  the  usual  course  of  business.'  These  woi-cls  are 
usually  defined  to  mean  '  according  to  the  usages  and  customs  of  com- 
mercial transactions.'  If  the  plaintiff  purchased  the  note  before  matur- 
ity for  value,  that  would  be  such  a  transaction." 

1  For  the  application  of  the  question  to  pledges,  see  post,  §  304. 

2  Swift  V.  Tyson,  16  Pet.  1;  Bauk  of  St.  Albans  v.  Gilliand,  23  Wend. 
31;  Bank  of  Sandusky  v.  Scoville,  24  Wend.  115;  Youngs  v.  Lee,  18 
Barb.  187;  Schepp  v.  Carpenter,  51  N.  Y.  602;  Bertraud  v.  Barkmau,  8 
Eng.  150;  Kobinson  v.  Lair,  31  Iowa,  9;  Henry  v.  Eitenour,  31  lud. 
186. 

3  Billings  u.  Collins,  44  Me.  271;  Litchfield  Bank  u.  Peck,  29  Conn. 
384;  Briggs  v.  Merrill,  58  Barb.  379.  In  Roberts  v.  Hall,  37  Conn.  205, 
a  note  was  obtained  from  the  maker  by  fraud,  and  was  transferred  by 
the  payee  to  a  trustee  iu  part  for  the  benefit  of  certain  creditors,  and 
the  balance  for  the  payee's  wife.  It  was  held  that  the  trustee  did  not 
obtain  the  paper  "  in  the  usual  course  of  business,"  Carpenter,  J.,  say- 
ing: "The  purpose  for  which  the  paper  is  used  is  exceptional  and 
unusual.  We  apprehend  that  cases  like  this  are  rarely  to  be  met  with  in 
business  circles.  Let  us  examine  it  more  carefully.  A  man  has  a  piece 
of  negotiable  paper,  with  which  he  wishes  to  pay  or  secure  certain  debts. 
If  thei'e  is  but  one  debt,  he  can  transfer  it  directly  to  the  creditor,  and 
the  law  protects  the  transaction.  This  is  according  to  the  usual  course 
of  business.  But  if  he  transfers  it  to  a  friend,  to  hold  till  due,  and 
then  collect  it,  and  with  its  avails  pay  the  creditor,  that  is  unusual  and 
suspicious  upon  its  face,  and  requires  explanation.  Unless  some  good 
reason  can  be  sho-v\Ti  for  such  a  proceeding,  the  law  ought  not  to  pro- 
tect it.  But  it  is  said  there  were  several  creditors,  which,  it  is  claimed, 
sufficiently  explains  the  fact,  that  the  security  was  affected  through  the 
intervention  of  a  trustee" 

505 


§    2!'4:  THE    RIGHTS    OF    BONA    FIDK    HOLDERS.        [CU.  XIV. 

business.^  It  also  depends  upon  the  relation  of  the  trans- 
ferrer to  the  paper,  whether  the  transfer  is  made  *'  in  the 
usual  course  of  business."  If  the  paper  is  transferred  by 
any  one  but  the  payee  or  last  indorsee,  it  is  not  done  *'  in 
the  usual  course  of  business  "  and  the  transferree  takes  it 
subject  to  the  equities. 2  So,  also,  -where  the  transferrer  or 
negotiator  is  the  acceptor  of  a  bill,  it  has  been  held  in  Kew 
York  that  he  is  presumed  to  have  it  in  his  possession,  for 
the  purpose  of  accepting  it,  or  after  payment,  and  hence  has 
not  the  power  to  negotiate  it  even  before  maturity.^  But 
in  England  and  South  Carolina  it  is  held  that  one  who  pur- 
chases a  bill  from  the  acceptor  is  a  bona  fide  purchaser,  since 
it  is  possible  for  the  bill  to  have  been  made  for  the  accommo- 
dation of  the  acceptor,  and  that  such  a  transfer  is  "in  the 
usual  course  of   business."  ^     This  would   seem  to  be  the 

^  Earhart  v.  Gant,  32  Iowa,  481.  The  statute  referred  to  (Rev.  Stat., 
§3272)  reads  as  follows:  "  Bank  bills  and  other  things  in  action  may 
be  levied  upon  and  sold,  or  appropriated  as  hereinafter  provided,  and 
assignments  thereon  by  the  officer  shall  have  the  same  effect  as  if  made 
by  the  defendant,  and  may  be  treated  as  so  made." 

2  Gibson  v.  Miller,  29  Mich.  355;  Mills  v.  Porter,  11  N.  Y.  S.  C.  (4 
Hun)  524. 

3  Central  Bank  v. Hammett,  50  N.  Y.  158,  the  court  saying:  " The  pos- 
session of  a  bill  or  note  payable  to  bearer,  or  indorsed  in  blank,  by  one 
not  a  party  to  the  instrument,  is  presumptive  evidence  of  ownership. 
But  a  possession  of  such  an  instrument  by  a  party  to  it  only  authorizes  a 
presumption  of  such  rights  and  obligations  of  the  several  parties  as  are 
indicated  by  the  paper  itself.  The  actual  relations  of  the  several  parties 
to  the  instrument  are  presumed  to  be  precisely  such  as  the  law  declares,  in 
the  absence  of  any  special  circumstances  to  take  the  instrument  out  of  the 
general  rule,  and  vary  the  liabilities  of  the  parties  as  between  each  other. 
An  individual  negotiating  for  the  purchase  of  a  bill  or  note  from  one 
having  it  in  possession,  and  whose  name  appears  upon  it,  must  assume 
that  the  title  of  the  holder,  as  well  as  all  the  liabilities  of  all  the  par- 
ties, is  precisely  that  indicated  by  the  instrument;  that  is,  he  can  not 
assume  that  the  person  in  possession  has  any  other  or  different  rights; 
or  that  the  liability  of  the  parties  is  other  or  different  from  that  which 
the  law  would  imply  from  the  form  and  character  of  tlie  instrument." 

•»  Merely  w.  Culverwell,  7  M.  &  W.  174;  Witte  «.  Williams,  a  S.  C. 
304. 

506 


CH,  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    2'J5 

sounder  rule,  and  in  consonance  with  the  ruling  that  the 
negotiation  of  a  bill  by  the  drawer,  when  it  is  drawn  to  his 
order,  is  in  the  usual  course  of  business.  This  decision  is 
based  upon  the  doctrine  that  the  drawer  is  the  original 
creditor.^ 

§  295.  Before  and  after  maturity.  — It  is  also  required 
of  the  bona  fide  hoXdev,  that  he  must  have  acquired  the 
paper  before  maturity,  in  order  to  be  able  to  claim  exemp- 
tion from  the  equitable  defenses  that  may  be  set  up  against 
his  indorser  or  transferrer.  If  the  holder  has  received 
the  paper,  after  it  has  fallen  due,  he  must  be  considered 
as  havino;  knowledge  of  at  least  a  technical  dishonor.  The 
paper  is  due  and  payable,  and  if  the  holder  of  it  at  maturity 
offers  it  for  sale,  instead  of  presenting  it  for  payment,  this 
is  sufficiently  unusual  to  put  the  purchaser  on  his  inquiry. 
It  is  the  universal  rule  that  the  commercial  paper  ceases  to  be 
negotiable  when  due,  and  can  afterwards  be  only  assigned, 
i.e.,  transferred,  without  giving  to  the  transferee  any  better 
title  than  his  transferrer  had.^ 

1  Merritt  v.  Duncan,  7  Heisk.  156. 

2  Chief  Justice  Shaw  said  in  Fisher  v.  Leland,  4  Cush.  4:56 :    "  Where 
a  negotiable  note  is  found  in  circulation  after  it  is   due,  it  carries  sus- 
picion on  the  face  of  it.     The   question  instantly  arises,  why  is  it  in 
circulation?  Why  is  it  not  paid?    Here  is  something  wrong.    Therefore, 
although  it  does  not  give  the  indorsee  notice  of  any  specific  matter  of 
defense,   such    as    set-off,    payment,    or    fraudulent    acquisition,    yet 
it    puts    him    on  inquiry;     he  takes  only  such  title    as  the  indorser 
himself     has,     and    subject    to    any  defense    which    might    he   made 
if  the  suit  were  brought  by    the   indorser."     See  also  Texas  v.  Hard- 
euberg,   10    Wall.   58;  Hinckley  v.  Union  P.  R.  R.  Co.,  129  Mass,    61 
Marsh  v.   Marshall,  53  Pa.  St.  396;  Greenwell  v.  Haydon,  78   Ivy.  333 
Kellogg  V.  Schnaake,  56  Mo.  137;  Arents  v.  Commonwealth,  18   Gratt 
750;  Davis  v.  Miller,  14  Gratt'.  1;  Goodson  v.   Johnson,  35  Tex.    622 
Henderson  v.  Case,  31  La.  Ann.  215;  Kittle  v.   DeLamater,  3  Neb.  325 
Clark  «.  Dederick,  31  Md.  148;  Darling  v.  Osborne,  51  Vt.  130;  Liver- 
more  V.  Blood,  40  Mo.    48;  Barker  v.  Valentine,  10  Gray,  341;  Flint  v. 
Flint,  6  Allen,  34;  Simpson  v.  Hall,  47  Conn.  418;  Williamson  v.  Doby,  SB- 
Ark.  689;  Thomas  v.  Kinsey,  8  Ga.  421;  Fields  v.  Tuuston,  1   Cold.  40;^ 

507 


§    2!'5  THE    RIGHTS    OF    BONA    FIDE    HOLDERS.       [CH.   XIV. 

The  indorsee  of  overdue  paper  does  not  however  take 
the  paper  subject  to  all  the  defenses  that  might  be  set 
up  against  his  transferees,  or  against  the  original  parties. 
He  takes  it  subject  to  the  defense  — first,  that  the  paper  had 
its  inception  in  some  fraud  or  illegality,  or  was  otherwise 
tainted  with  some  material  defect,  which  rendered  it  void, 
except  in  the  hands  of  a  bona  fide  hoXdiQY ',^  nn^  secondly , 
that  the  paper  was  without  consideration,  or  that  there 
had  been  a  payment,  or  an  accord  and  satisfaction,  or  that 
the  title  of  his  immediate  indorser  was  defective  on  account 
of  some  equitable  defense  arising  against  hira.^ 

It  can  also  be  shown  against  the  indorsee  of  overdue 
paper  that  he  claims  title  through  a  thief  or  finder  or  from 
a  bankrupt.^  But,  on  the  other  hand,  he  cannot  be  pre- 
vented from  recovering  on  the  instrument,  on  account  of 
equities  arising  between  remote  indorsers  and  indorsees. 
He  is  only  subject  to  those  equities  which  arise  between 
the  original  parties  and  between  himself  and  his  immediate 
indorser.* 

Diaraoud  v.  Harris,  33  Tex.  634;  Scott  v.  First  Nat.  Bank,  71  lud.  319; 
Murray  ».  Lardner,  2  Wall.  110;  Smith «.  Foley,  0  Wall.  492;  Merrick  v. 
Butler,  2  Lans.  103;  Brainard  f.  lleavis,  2  Mo.  App.  490. 

1  Bissellv.  Gowdy,  31  Coun.  47;  Southard  v.  Porter,  43  N.  H.  379; 
RenwicktJ.  Williams,  2  Md.  3.5G;  Eversole  v.  Maull,  50  Md.  103;  McLaiu 
r.  Lohr,  2.5  111.  507;  Capps  v.  Gorham,  14  111.  198;  Bates  v.  Kemp,  12 
Iowa,  99;  Barlow  v.  Scott,  12  Iowa,  63;  Kurz  v.  Holbrook,  13  Iowa,  562; 
Schuster  r.  Mardeu,  34  Iowa,  181;  Greeu  v.  Louthair,  49  Ind.  l.SO;  Cav- 
euah  V.  Somerville,  Dallam,  (Texas),  534;  Coghlan  v.  May,  17  Cal.  515; 
Thomas  v.  Kinsey,  8  Ga.  421. 

^  Taylor  r.  Mather,  3  T  R.  83,  Boehu  v.  Sterling,  T.  R.  423;  Brown  v. 
Turner,  7T.  R.  630;  Lazarus  v.  Cowie,  3  Q.  B.-  C43  E.  C.  L.  R.)  459;  Shipp 
V.  St;icker,  8  Mo.  145;  Kellogg  v.  Schnaakc,  56  Mo.  136;  Butler  ».  Munson, 
18 La.  Ann.  363 ;  Davis  v.  Bradley,  26  La  Ann,  555;  Bryan  v.  Promm,  1  111 
33;  Stafford  «.  Fargo,  35  111.  481;  Sawyer  v.  Hoovey,  5  La.  Ann.  153; 
Whitewell  v.  Crehore,  8  La.  540;  Diamond  r.  Harris,  33  Tex.  634;  Gordon 
V.  "Wanscy,  21  Cal.  77;  Elgin  v.  Hill,  27  Cal.  372, 

3  Ashurts  r   Royal  Baud,  27  Law  Times,  108, 

^Hillw  Shields,  81  N.  C.  2.",n;  Hibernian  Bank  ?).  Evorman,  52  Miss, 
500;  Dukeu,  Clark,  58  Miss.  461!;  Crosby  v.  Tanner,  40  Iowa,  136,  Sec 
508 


CH.  XIV.]       THE    RIGHTS    OF    BOXA    FIDE    HOLDERS.  §    295 

The  indorsee  of  overdue  paper  is  also  not  subject  to 
any  equity  arising  against  tlie  indorser  after  the  transfer/ 
or  to  any  set-off  arising  out  of  collateral  matters.^ 

In  England  and  in  some  of  the  United  States,  it  is  held 
that  the  want  of  consideration  in  accommodation  paper  does 
not  constitute  a  defense  to  an  action  by  an  indorsee  after 
maturity  ;^  and  it  is  also  held  that  the  knowledge  of  the  in- 
dorsee does  not  invalidate  the  paper,  since  a  man  lends  his 


Warreu  v.  Haight,  65  N.  Y.  171.  It  has  been  held  in  England,  that  if  tlie 
equity  is  attached  directly  to  the  bill  or  note,  it  may  be  set  up  against  a 
subsequent  indorsee  of  overdue  paper,  provided  no  bona  fide  holder  inter- 
venes. In  re  European  Bank,  Ex  parte  Oriental  Commercial  Bank,  5  Ch, 
Ap.  358. 

1  Baxter  v.  Little,  6  Met.  7;  Gutwellig  v.  Stumes,  47  Wis.  428;  Fields 
■o.Tanston,  1  Cold.  40;  Hey  wood  v.  Steams,  30  Cal.  58. 

2  Burrough  v.  Moss,  10  B.  &  C.  (21  E.G.  L.  R.)  558 ;  Whitehead  w. 
Walker.  9  M.  &  W.  50G ;  Oulds  v.  Harrison,  10  Exch.  572 ;  Stein  v.  Yglesias, 
1  Cromp.  M.  &  R.  565;  3  Dowl.  252;  Holmes  v.  Kidd,  3  Hurlst.  &  N.  891; 
Simpson  «.  Hall,  47  Conn.  418;  Button  v.  Bishop,  11  Vt.  70;  Baxter  u. 
Little,  6  Met.  7;  Barker  v.  Valentine  10  Gray,  341;  Flint  v.  Flint,  6  Allen, 
34;  Eversole  v.  MauU,  50  Md.  96,  Davis  v.  Miller,  14  Gratt.  8;  Woods  v. 
Viosca,  26  La.  Ann.  716;  Anuon  v.  Houck,  4  Gill,  332;  Wilkinson  v.  Jef- 
fers,  30  Ga.  153;  Elliott  v.  Deason,  64  Ga.  63;  Hauessler  v.  Greene,  8 
Mo.  App.  451;  Gullett  w.  Hay,  15  Mo.  399;  Arnot  v.  Woodburn,  35  Mo, 
29;  Hughes  v.  Large,  2  Barr.  103;  Epler  v.  Fauk,  8  Barr.  468;  Clay  v. 
Cottrell,  6  Harris,  413;  Barlovr  v.  Scott,  12  lovra,  63;  Bates  v.  Kemp,  12 
Iowa,  99;  Way  v.  Lamb,  15  Iowa,  79;  Richards  v.  Daily,  34  Iowa,  427; 
Whitaker  v.  Kuhn,  52  Iowa,  315;  Trafford  v.  Hall,  7  R.  I.  104.  But  see 
contra,  Edwards  on  Bills,  260;  Driggs  v.  Rockwell,  11  Wend.  504 ;  Odiorne 
V.  Woodman,  39  N.  H.  544 ;  Davis  v.  Neligh,  7  Neb  78 ;  also,  in  con- 
sequence of  a  statute,  contra,  Denning  v.  Gibson,  53  Iowa,  517  It  has 
been  held  to  be  impossible  to  set  up  the  defense  of  set  off  against  an 
indorsee  after  maturity,  even  though  the  indorsement  was  made  for  the 
purpose  of  defeating  the  set-off.  Oukls  u.  Harrison,  10  Exch.  572;  24 
L.  J.  Exch.  66;  Heuessler  v.  Greece,  8  Mo.  App  454. 

3  Charles  v.  Marsden,  1  Taunt.  224;  Stein  u.  Yglesias,  3  Dowl  252; 
Camthers  v.  West,  11  Q.  B.  (63  E.  C.  L.  R.)  143;  Sturtevant  v.  Ford,  4 
M.  &  G.  101;  Dunn  v.  Weston,  71  Me.  270;  First  Nat.  Bank  v.  Grant,  71 
Me.  374;  and  many  early  cases  in  New  York,  now  overruled;  Brown  u. 
Mott,  7  Johns.  224;  Harringtons. Dorr,  3  Rob  275;  Powell  v.  Waters,  17 
Johns.  176;  Grandon  v.  Lerov.  2  Paige,  309. 

509 


§    2i)D  THE    liKJHTS    OF    J50XA    FIDE    HOLDERS.        [cil.  XIV. 

credit  tihvays  with  the  intention  of  being  bound  by  his 
promise.^  But  where  the  parties  have  agreed  not  to  nego- 
tiate an  accommodation  bill  after  maturity,  then  it  cannot 
be  enforced  by  an  indorsee  after  maturity.^  But  it  is  held 
inmost  of  the  States  in  this  country,  that  it  is  not  to  be  pre- 
sumed that  the  accommodating  party  intended  to  lend  his 
credit  to  be  used  at  any  time,  but  rather  that  he  authorized 
its  use  only  before  the  maturity  of  the  paper  which  he 
signed ;  and  in  consequence  the  indorsee  of  overdue  accom- 
modation paper  cannot  recover  on  it.^ 

At  every  point  in  this  inquiry,  it  must  be  always  kept 
in  mind  not  only  that  the  transferee  of  overdue  paper  does 
not  set  a  bettei  title  than  his  transferrer,  but  also  that  he 
jrets  whatever  title  the  transferrer  has.  If  the  transferrer 
is  a  bona  fide  holder  without  notice  of  defenses,  the  trans- 
feree after  maturity  can  stand  upon  the  good  faith  of  his 
transferrer,  and  enjoy  the  benefit  of  his  superior  title.  The 
principal  reason  for  this  rule,  apart  from  the  fact  that  a 
grantor  always  conveys  whatever  title  he  has,  is  that  it 
alone  enables  the  '  bona  fide  holder  to  derive  full  ben- 
efit from  his  superior  title.  If  he  could  not  transfer  it,  he 
could  only  enforce  it  against  the  prior  parties.*     But  this 

1  Charles  v.  Marsden,  1  Tauut.  224,  Lawrence,  J.:  "Would  there  be 
any  objection  if,  with  the  knowledge  of  the  circumstance  that  this  is  an 
accommodation  bill  some  person  should  advance  money  upon  it  before 
it  was  due?  Tlien  what  is  the  objection  to  his  furnishing  the  money  on 
it  after  it  was  due?  For  there  is  no  reason  why  a  bill  may  not  be  nego- 
tiated after  it  is  due,  unless  there  was  an  agreement  for  the  purpose  of  re- 
straining it.^'' 

2  Charles  v  Marsden.  1  Taunt  224  (semble) ;  Parr  v.  Jewell,  16  C.  B. 
684      See  Carutliers  v.  West  U  Q   B.  ((53  E.  C.  L.  R.)  143. 

^  Chester u.  Dorr,  41  N.  Y.  279  (overruling  prior  decision);  Bower  v. 
Hastings,  12  Casey,  285;  Hoffman  v.  Foster,  43  Pa.  St.  137;  Carroll  v. 
Peters,  1  McGloin  (La.),  88;  Battle  v.  Weenes,  44  Ala.   105. 

4  Smith  V.  Hiscock,  14  Me.  449;  Woodman  v.  Churchill,  52  Me.  58; 
Roberts  v.  Lane,  64  Me.  108:  Thompson  i'.  Shepherd,  12  Mot.  311 :  Bissell 
V.  Gowdy,  31  Conn.  48;  Fairclough  v.  Pavia,  9  Exch.  090;  Chalmers  v. 
510 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    296 

rule  is  subject  to  this  exception,  that  if  the  note  were  in- 
valid in  the  hands  of  the  payee  or  some  prior  indorser,  he 
could  not,  by  securing  a  retransfer  of  the  instrument  by  a 
subsequent  bona  fide  indorsee,  claim  the  benefit  of  the  su- 
perior title  of  this  subsequent  indorsee.^ 

§  296.  Instruments   payable    on   demand,  or  at  sight, 
when  overdue.  — Instruments,  which  are  made  payable  on 
demand,  or   at  sight,  may  become  due  immediately  by  de 
mand  of  payment, ^  or  by  payment  by  the  maker. ^     Not 

Laniou,  1  Camp.  383;  Wilson  v.  Mechanics'  Sav.  Bank,  45  Pa.  St.  494; 
Riegel  v.  Cunningham,  9  Phila.  177;  Bassett  v.  Avery,  15  Ohio  St.  299; 
Lock  V.  Talford,  52  111.  160;  Bradley  v.  Marshall,  54  111.  173;  Richert  v. 
Koemer,  54  111.  306;  Peabody  v.  Rees,  18  Iowa,  171;  Howell  v.  Crane,  12 
La.  Ann.  126;  Commissioners  v.  Clark,  94  U.  S.  285;  Cromwell  v.  County 
of  Lac,  9G  U.  S.  51;  Hoffman  v.  Bank  of  Milwaukee,  12  Wall.  181;  Cook 
V.  Larkin,  10  La.  Ann.  507;  Hereth  w.  Merchants' Nat.  Bank,  34  Ind. 
880 ;  Prentice  v.  Zane,  2  Gratt.  262 ,  Kinney  v.  Kruse,  28  Wis.  190 ;  Wat- 
son V.  Flanagan,  14  Tex.  354;  Cotton  v.  Sterling,  20  La.  Ann.  282;  Sim- 
onds  V.  Merritt,  33  Iowa,  537;  Mornyer  v.  Cooper,  35  Iowa,  257;  Hascall 
».  Whitmore,  19  Me.  102;  Riley  v.  Scahwhacker,  50  Ind.  592;  Woodworth 
V.  Huntoon  40  111.  131;  Hogan  v.  Moord,  48  Ga.  156;  Boyd  t?.  McCann, 
10  Md.  118. 

1  Tod  V  Wick,  36  Ohio  St.  387 ;  Sawyer  v.  Allen,  9  Allen,  42 ;  Boit  v. 
Whitehead  50  Ga.  76;  Kost  v.  Bender,  25  Mich.  516,  Cooley,  J. :  '<  I  am 
not  aware  that  this  rule  has  ever  been  applied  to  a  purchaser  by  the 
original  payee,  nor  can  I  pei'ceive  that  it  is  essential  to  the  protection  of 
the  innocent  indorsee,  that  it  should  be.  It  cannot  be  very  important  to 
him,  that  there  is  one  person  incapable  of  succeeding  to  his  equities,  and 
who  consequently  would  not  be  likely  to  become  a  purchaser.  If  he  may 
sell  to  all  the  rest  of  the  community,  the  market  value  of  his  security  is  not 
likely  to  be  affected  by  the  circumstance  that  a  single  individual  cannot 
compete  for  its  purchase,  especially  when  we  consider  that  the  nature  of 
negotiable  securities  is  such  that  their  market  value  is  very  little  influ- 
enced by  competition.  Nor  do  I  perceive  that  any  rule  or  principle  of  law 
would  be  violated  by  permitting  the  maker  to  set  up  this  defense  against 
the  payee,  when  he  becomes  indorsee,  with  the  same  effect  as  he  might 
have  done  before  it  had  been  sold  at  all,  or  that  there  is  any  valid  rea- 
son against  it.' 

2  Hill  V.  Henry,  17  Ohio  1;  Darling  v.  Wooster,  9  Ohio,  St.  519;  Hirst 
V.  Brooks,  50  Barb.  534. 

»  Stover  V.  Hamilton,  21  Gratt.  273.      If  partial  payment  is  made,  de- 

511 


§    296  THE    KIGHTS    OF    BONA    FIDE    HOLDERS.       [CH.  XIV. 

only  is  that  true,  where  the  paper  is  expressed  to  be  pa}'- 
able  "  ou  demand  "  or  "  at  sight,"  but  also,  where  differ- 
ent expressions,  but  of  similar  import,  are  used  ;  as,  for 
example,  *'  at  anytime  called  for,"  ^  *'  in  such  portions  and 
at  such  times,  as  the  directors  may  require,"  ^  etc.  And  a 
paper  is  held  payable  on  demand,  whenever  the  time  of 
payment  is  not  expressed  therein.^ 

It  was  formerly  held  that  a  bill  or  note,  payable  on  de- 
maud,  or  at  sight,  was  never  overdue,  so  as  to  let  in  the 
equities,  until  there  had  been  a  demand.*  But  the  better 
and  more  modern  rule  is,  that  the  demand  must  be  made 
within  a  reasonable  time  after  the  date  of  the  note,  in  order 
to  claim  the  rights  of  a  bona  fide  holder.  And  if  the  bill  or 
note  is  transferred  within  a  reasonable  time,  the  transferee 
is  not  charged  with  constructive  notice  of  the  actual  dis- 
honor of  the  paper. ^  It  has  been  held  that  what  is  reason- 
able time,  in  this  connection,  is  a  question  for  the  court 
to  determine.^  It  has  also  been  held  to  be  a  question  of 
fact  for  the  jury,^  and  also,  a  mixed  question  of  fact  and 

mand  will  be  presumed,  and  the  paper  becomes  overdue.  Bayliss  v. 
Pearsou,  15  Iowa  279. 

1  Bowman  v.  McChesney,  22  Gratt.  609. 

2  Colgate  V.  Buckingham,  39  Barb.  177;  Howlaud  v.  Edmonds,  24  N. 
Y.  307. 

3  Thrall  v.  Mead,  40  Vt.  540;  Keyes  v.  Fenstermacher,  24  Cal.  329; 
Cornell  v.  Moulton,  3  Denio,  12;  First  Nat.  Bank  v.  Price,  52  Iowa,  570; 
Mason  w.Patton,  1  Mo.  279;  Dodd  v.  Denny,  G  Oreg.  156;  Jones  v.  Brown, 
11  Ohio  St.  601;  Burthe  v.  Donaldson,  15  La.  482;  Freeman  tj.  Ross,  15 
Ga.  252. 

<  Brooks u.  Mitchell,  9  M.  &  W.  15,  Parke,  B.,  saying:  "  A  promissory 
note  payable  on  demand  is  intended  to  be  a  continuing  security ;  it  is 
quite  unlike  a  check  which  is  intended  to  be  presented  immediately." 
See  also  Barough  v.  White,  4  B.  &  C.  325;  Lea  v.  Glover,  1  Bradw.  335; 
Gordon  v.  Preston,  Wright  (Ohio),  341. 

6  Poormanv.  Mills,  39  Cal.  345;  1  Daniel's  Ncgot.  Inst.  734;  Thrall  u. 
Mead,  40  Vt.  540;  Works  v.  Ilershey,  35  Iowa,  340. 

*  Sice  V.  Cunnigham,  1  Cow.  397;  Carll  v.  BrowTi,  2  Mich.  401;  Poor- 
man  V.  Mills,  39  Cal.  345;  Sylvester  v.  Crapo,  15  Pick.  92. 

'  Barbour  v.  Fullerton,  3G  Pa.  St.  105. 
512 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §     296 

law.^     Probably,    under   varying   circumstances,   each   of 
these  propositions  will  find  application. 

The  most  difficult  thing  to  determine  is,  what  constitutes 
a  reasonable  time,  and  by  what  circumstances  may  it  be  as- 
certained. No  general  rule  can  be  laid  down.  The  shorter 
or  greater  length  of  time  is  not  a  reliable  guide.  For, 
under  varying  circumstances,  bills  and  notes  have  been  held 
to  be  overdue,  which  had  been  running  for  two  months, ^ 
two  months  and  a  half,^  three  months,*  four  months,^  five 
months,^  six  months,'  ten  months,^  eleven  months,^  thir- 
teen months,^''  fourteen  months, ^^  eighteen  months, ^^  ^^q 
years, ^^  three  years, ^*  six  j^ears.^^  On  the  other  hand,  such 
bills  and  notes  have  been  held  to  be  still  negotiable,  where 
they  had  been  transferred  two  days,^®  five  days,^'  seyen 
days,^^    twenty-three    days,^^    twenty-five    days ,2°   several 

1  Salmon  v.  Grosvenor,  66  Barb.  160.- 

2  Camp  V.  Clark,  14  Vt.  387. 

3  Losee  v.  Dunkirk,  7  Johns,  70. 

<  Herrick  v.  Woolverton,  41  N.  Y.  581. 

6  Chamberlain  v.  Delarive,  2  Wils.  353. 

6  BulU\  First  Nat.  Bank,  14  Fed.  Rep.  612;  LaDue  v.  First  Nat.  Bank, 
81  Minn.  33.    . 

'  American  Bank  v.  Jenness,  2  Met.  288;  Ayer  u.  Hutchins,  4  Mass. 
370;  Carlton  «.  Bailey,  27  N.  H.  230;  Nevins -y.  Townsencl,  6  Conn.  5. 

8  Emerson  u.  Crocker,  5  N.  H.  159;  Morey  v.  Wakefield,  41  Vt.  24. 

9  Sylvester  v.  Crapo,  15  Pick.  92. 
10  Cross  V.  Brown,  51  N.  H.  486. 

"  Atlantic  Delaine  Co.  v.  Tredick,  5  R.  I.  171;  Cromwell  v.  Abbott,  1 
Serg   &  R.  180. 

12  Furman  v.  Haskins,  2  Cai.  369. 

13  Niver  v.  Best,  10  Barb.  369. 
"  Merritt  v.  Todd,  23  N.  Y.  28. 

15  Gregg  V.  Union,  etc.,  Nat.  Bank,  87  Ind.  238. 

16  Dennett  v.  Wyman,  13  Vt.  485;  Howe  v.  Hartness,  11  Ohio  St. 
449. 

"  Stewart  v.  Smith,  28  111.  396, 

IS  Thurston  v.  M'Kown,  6  Mass.  428;  Seaver  v.  Lincoln,  21  Pick.  267. 

19  Mitchell  V.  Catchings,  23  Fed.  Rep.  710. 

20  Carll  V.  Brown,  2  Mich.  401. 

33  513 


§    297  THE    RIGHTS    OF    BONA    FIDE    HOLDERS.        [cil.  XIV. 

weeks, ^  two  months,^  five  months,''  nine  months,*  ten 
mouths,^  two  years,®  after  date.  In  every  case  the  con- 
clusion depends  upon  the  circumstances.  If  it  appears 
from  these  circumstances  that  the  parties  intended  the 
paper  to  be  a  continuing  security,  a  greater  length  of  time 
will  be  considered  reasonable,  than  where  the  circum- 
stances indicated  the  expectation  of  prompt  payment.  The 
reservation  of  interest  always  tends  to  prove  that  the  paper 
was  intended  to  remain  negotiable  for  a  considerable  time, 
and  the  length  of  time  will  vary  with  the  length  of  the 
periods  of  interest. 

In  many  States,  it  is  now  provided  by  statute  that  bills 
and  notes  on  demand  shall  be  overdue  after  a  certain  period 
and  not  before.'  But  in  Connecticut,  and  presumably  in 
the  other  States,  the  statute  does  not  affect  the  question  of 
maturity  as  between  the  original  parties,^  In  California, 
the  promissory  note  is  declared  by  statute  to  be  overdue  in 
one  year,  if  it  bears  interest,  and  in  six  months,  if  it  does 
not  bear  interest.^  The  bill  of  exchange  is  overdue  in  one 
year,  if  it  bears  interest,  and  ten  days  if  without  interest.^" 

§  297.  Transfer  when  installment  of  principal  or  inter- 
est is  overdue.  —  If  the  principal  of  the  paper  is  payable 

1  Wethy  V.  Andrews,  3  Hill,  582. 

2  McLean  v.  Nichlen,  3  V.  L.  R.  107. 

3  Sice  V.  Cunuiugliara,  1  Cow.  397;  Sanford  v.  flickles,  4  Johns.  224. 

4  Castle  V.  Caudee,  16  Conn.  224, 

^  Chartered  Mercantile  Bank  v.  Dickson,  L.  R.  3  P.  C.  574. 

6  Tomlinson  Carriage  Co.  w.  Kinsella,  31  Conn.  268;  Ranger  v.  Cory,  1 
Met.  369. 

'  In  Connecticut,  four  months,  G.  S.  Conn.  (1875'),  343,  §  2.  In  Massa- 
chusetts, New  Hampshire,  Vermont,  and  Minnesota,  sixty  days.  Mass. 
P.  S.  (1882),  ch.  77,  §  12;  N.  II.  G.  L.  (1878),  509,  §  11 ;  Vt.  R,  L.  (1880), 
§  2013;  ]\nnn.  G.  S.  (1878),  ch.  23,  §§11,  12. 

^  Seymour  t?.  Coutiueutal  Life  Ins.  Co.,  44  Conn,  300. 

»  California  Codes  &  Stats.  (1881),  §  3135. 

1°  Cal.  Codes  and  Stat.  (1880;,  §8099;  Dakota  R.  C.  (1877),  §1830; 
Utah  L.  (1882),  §§10,  11. 
514 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    298 

in  installments,  the  paper  is  considered  as  dishonored  by 
the  failure  to  pay  any  one  installment  when  it  fell  due, 
whether  the  entire  debt  became  due  on  such  a  failure  to  pay 
or  not,  and  a  subsequent  transferee  takes  it  subject  to  all 
the  equities.^  But  it  is  doubtful  whether  the  same  rule 
applies  to  the  failure  to  pay  an  installment  of  interest,  un- 
less the  parties  have  stipulated  that  the  entire  debt  shall 
become  due  on  the  failure  to  pay  the  interest.  Although 
it  has  been  held  that  the  failure  to  pay  the  interest  will  de- 
stroy the  negotiability  of  the  paper,  with  or  without  this 
stipulation ;  ^  the  better  opinion  is  that,  in  the  absence 
of  such  a  stipulation,  the  failure  to  pay  an  installment  of 
interest  does  not  affect  the  future  negotiability  of  the  note 
or  bill,  for  the  reason  that  the  interest  is  a  mere  incident, 
and  not  a  part,  of  the  original  indebtedness,  represented  by 
the  instrument.  The  bona  fide  holder  before  maturity 
takes  the  instrument  free  from  equities,  although  there  are 
arrears  of  interest. ^ 

§  298.  Transfer  on  last  day  of  grace, —  before  the  close 
of  the  hours  of  business,  is  said  by  some  of  the  authorities 

1  Field «.  Tibbetts,  57  Me.  359;  Vinton  v.  King,  4  Allen,  562;  Hart  v. 
Stickney,  41  Wis.  630. 

2  Newell  V.  Gregg,  51  Barb.  263. 

^  Boss  V.  Hewitt,  15  Wis.  260;  Kelley  w.  Whitney,  45  Wis.  110;  Na- 
tional Bank  of  North  America  v.  Kirby,  108  Mass.  497,  Cole,  J.,  saying: 
♦'  It  is  manifest  that  a  failure  of  interest  is  not  to  be  ranked  with  a  fail- 
ure to  pay  principal.  Interest  is  an  incident  of  the  debt,  and  differs 
from  it  in  many  respects.  It  is  not  subject  to  protest  and  notice  to  in- 
dorsers,  or  Jays  of  grace  according  to  the  law  merchant.  Interest  is  not 
recovered  on  overdue  interest,  and  the  statute  of  limitations  does  not 
run  against  it  until  the  principal  debt  is  due.  The  holder  of  a  note  with 
interest  payable  annually  loses  no  rights  against  the  parties  to  it,  whether 
makers  or  indorsers,  by  neglecting  to  demand  it,  and  he  has  the  election 
to  do  so,  or  wait  and  collect  it  all  with  the  principal."  But  see  First 
Nat.  Bank  v.  Scott  County,  14  Minn.  77 ;  Chouteau  v.  Allen,  70  Mo.  290, 
339. 

515 


§  299       THE  iiiaiiTS  OF  bona  fide  holdeks.     [en.  xiv. 

to  bo  a  transfer  before  maturity  ^  but  the  contrary  opinion 
is  maintained  by  equally  high  authority.^ 

§  299,  Purchaser  without  notice. — The  bona  fide 
holder  must  also  be  a  purchaser  without  notice.  If  he  can 
be  charo;ed  with  notice  of  the  defense  or  defect  of  title,  he 
is  not  a  bona  fide  holder,  and  cannot  claim  any  better  title 
than  what  the  vendor  had.'^ 

In  order  that  any  notice  may  affect  the  holder's  title,  it 
must  exist  at  the  time  when  the  paper  is  transferred  to 
him,  or  at  least  before  he  had  paid  for  it.  If  he  receives 
notice  before  payment  of  the  price  of  the  note  or  other 
commercial  paper,  he  is  not  a  bona  fide  holder,  although 
the  paper  had  been  already  transferred  to  him.* 

But  notice  to  an  agent  is  taken  in  law  to  be  notice  to  the 
principal,  so  that  it  is  not  necessary,  in  order  to  bind  the 
principal,  that  he  should  have  knowledge  of  the  defense  or 
defect  of  title,  if  the  agent,  who  is  charged  with  the  pur- 
chase of  the  paper,  has  notice.^  It  is,  however,  necessary, 
in  order  that  the  principal  may  be  charged  with  the  notice 
that  is  given  to  the  agent,  that  the  agent  shall  acquire  the 
knowledge  while  he    is    engaged   in  the    capacity   of    an 

i  Crosby  v.  Grant,  36  N.  H.  273. 

2  Pine  V.  Smith,  11  Gray,  38. 

3  Hanauer  v.  Doane,  12  Wall.  342;  Fisher  v.  Leland,  4  Gush.  45G; 
Skilcling  v.  Warren,  15  Johns.  270;  Kasson  v.  Smith,  8  Wend.  437; 
Harrisburg  Bank  v.  Meyer,  6  Serg.  &  R.  537;  Norvell  v.  Hudgins,  4  Muuf. 
496;  Lenhcim  v.  Fay,  27  Mich.  70;  Ryland  v.  Brown,  2  Head,  270. 

4  Craudall  u.  Vickery,  45  Barb.  15G;  Perkins  ».  White,  30  Ohio  St. 
530.  And  wliere  he  has  paid  only  a  part  of  the  sum  agreed  upon,  when 
he  received  notice,  he  is  a  bona  fide  holder,  only  as  to  the  amount  already 
paid.  Dresser  v.  Mo.,  etc.,  R.  R.  Co.,  93  U.  S.  93.  See  Weaver  v. 
Barden,  49  N.  Y.  286. 

fi  Lawrence  v.  Tucker,  7  Greenl.  195;  Patten  v.  Merchants'  Ins.  Co.,  40 
N.  H.  375;  Varuum  v.  Milford,  4  McLean,  93;  Bank  v.  Whitehead,  10 
Watts,  397;  Wiley  v.  Knight,  27  Ala.  336;  Blum  v.  Loggin,  53  Tex.  137; 
Livermore  v.  Blood,  40  Mo.  48;  Geer  v.  Higgins,  8  Kan.  520.  It  is  the 
same  with  a  notice  to  a  subagent.  Boyd  v.  Vanderkemp,  1  Barb.  Ch.  273. 
51(> 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    300 

ascent.^     If  the  notice   is   received,  when  the  ao-ent  is  en- 
gaged  with  his  own  affairs,  the  principal  is  not  bound  by  it.^ 

§  300.  Actual  and  coustructive  notice.  — As  a  matter 
of  course,  if  the  purchaser  has  received  actual  notice  of 
the  fraud  or  other  defense  that  might  be  set  up  against  his 
transferrer,  he  cannot  claim  the  protection  of  a  bona  fide 
holder.^  Such  cases  do  not  present  any  difficulty.  The  dif- 
ficulties arise  when  it  is  undertaken  to  charge  the  purchaser 
with  constructive  notice  when  he  knows  of  such  facts  as 
would  lead  an  ordinarily  prudent  man  to  suspect  a  defense 
or  other  defect  of  title.  This  doctrine  is  based  upon  the 
principle  that  it  is  a  man's  duty  to  do  all  in  his  power  to 
,  prove  or  disprove  any  well-grounded  suspicion,  as  to  the 
validity  of  a  negotiable  instrument,  that  might  find  lodg- 
ment in  his  mind,  before  he  can  claim  to  be  Si  bona  fide 
holder.*  But  it  is  not  every  suspicion  that  good  faith 
would  require  to  be  investigated.  Some  of  the  authorities 
are  inclined  to  hold  that  *'  it  will  be  sufiicient  if  the  cir- 
cumstances are  of  such  a  strong  and  pointed  character  as 
necessarily  to  cast  a  shade  upon  the  ^transaction  and  to  put 
the  holder  upon  inquiry."  ^  In  other  words,  the  purchaser 
can  not  claim  to  be  a  bona  fide  holder,  if  he   is  guilty  of 

1  The  Distilled  Spirits,  11  Wall.  366. 

2  Thus,  the  bauk  is  affected  by  the  knowledge  of  one  of  its  directors, 
if  he  receives  a  defective  paper  while  acting  for  the  bank.  Security 
Bank  v.  Cushman,  121  Mass.  490.  But  a  director  who  offers  a  note,  of 
which  he  is  payee  or  indorsee,  to  his  bauk  for  sale  or  discount,  if  he 
does  not  act  with  the  board  in  that  case,  is  not  considered  to  be  In  any 
sense  an  agent  of  the  bauk  in  that  transaction,  and  the  bank  will  uot  be 
charged  with  his  knowledge  of  the  defenses  to  the  note.  Hightstown 
Bank  v.  Christopher,  11  Vroom,  435;  Atlantic  Bauk  v.  Savery,  82  N.  Y. 
291.  See  Smith  v.  Ayer,  101  U.  S.  320;  West  Boston  Sav.  Bank  v. 
Thompson,  124  Mass.  50G ;  Barnes  v.  Trenton  Gas  Co.,  12  C.  E.  Green,  33. 

^  Norvill  V.  Hudgins,  4  Munf.  496;  Dogan  v.  Dubois,  2  Rich.  Eq.  85. 
*  Angle  V.  N.  W.,  etc.,  Ins.  Co.,  92  U.  S.  842;  Rowland  v.  Fowler,  47 
Conn.  347. 

^  Story  on  Promissory  notes,  §  197. 

517 


§-300  THE    RIGHTS    OF    BONA    FIDE    HOLDERS.        [CH.  XIV. 

gross  negligence  in  not  pursuing  an  inquiry  that  would,  under 
the  circumstances,  be  suggested  to  a  reasonably  prudent 
man.^  But  the  better  opinion  is  that  the  suspicion  must  be 
so  well-grounded  as  to  be  almost  jiroof  of  mala  fides;  as  it 
was  expressed  by  the  Supreme  Court  of  Missouri,  "  un- 
less there  be  such  a  combination  of  suspicious  incidents  as 
would  in  legal  contemplation  afford  ground  for  the  pre- 
sumption that  the  purchaser  of  the  paper  was  aware  at  the 
time  of  its  acquisition  of  some  equity  between  the  original 
parties  thereto,"  he  would  not  be  charged  with  constructive 
notice. 2 

If  a  note  is  made  payable  to  one  as  "  trustee,"  and  in- 
dorsed in  the  same  way  by  the  trustee,  the  purchaser  is 
charged  with  constructive  notice  of  the  fact  that  the  payee 
took  the  paper  in  a  fiduciary  capacity,  and  cannot  dispose 
of  it  for  his  own  benefit.^  Although  it  has  been  held  in 
some  of  the  States  that  the  statement  in  a  bill  or  note  of  the 
consideration  puts  the  purchaser  upon  his  inquiry  whether 
the  consideration  named  actually  passed  or  has  to  any 
extent  failed,*  the  great  weight  of  authority  is  against 
this  view.  The  authorities  generally  hold  that  the  purchaser 
of  commercial  paper  is  not  burdened  with  the  requirement  to 
see  to  the  execution  and  full  performance  of  the  considera- 
tion, merely  because  he  knows  what  it  is.^    In  some  States  it 

1  Gill  V.  Cubitt,  3  B.  &  C.  '^(J(j ;  Strange  v.  Wigney,  6  Bing.  677. 

2  Horton  v.  Bayne,  52  Mo.  533.  See  also  May  v.  Chapman,  16  M.  & 
W.  355;  Hamilton  v.  Vought,  34  N.J  L,  187;  Edwards  u.  Thomas,  66 
Mo.  486;  Greenaux  v.  Wheeler,  6  Tex.  526. 

3  Third  Nat.  Bank  v.  Lange,  51  Md.  138;  Shaw  v.  Spencer,  100  Mass. 
382.  But  see  Westmoreland  v.  Foster,  60  Ala.  448,  to  the  contrary,  the 
words  there  being  held  to  be  merely  descriptio  personce. 

4  Rand  v.  State,  77  N.  C.  175;  Thrall  v.  Horton,  44  Vt.  386.  See  Har- 
ris V.  Nichols,  26  Ga.  414,  as  to  the  effect  of  knowledge  that  the  consid- 
eration was  of  a  doubtful  character. 

5  In  New  York,  where  the  consideration  was  expressed  to  be  "one 
knitting  machine  wjirranted,"  the  bona  Jide  purchaser  was  held  not 
charged  with  constructive  notice  of   the  breach   of   a  parol  warranty, 

518 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    300 

is  required  by  statute  that  notes  given  for  patent  rights 
should  have  that  fact  stated  on  their  face;  but  a  note  is  in 
those  States  nevertheless  good  in  the  hands  of  a  bona  fide 
holder,  although  the  note  does  not  contain  the  required 
words. ^ 

It  does  not  affect  the  ho7ia  fide  holder's  title,  if  he 
knows  of  the  maker's  death  when  he  purchases  the  note, 
unless  he  knew  that  it  was  accommodation  paper  in  the 
hands  of  the  payee.  It  will  be  assumed  that  he  was  ig- 
norant of  its  accommodation  character. ^ 

Finally,  it  is  not  necessary  that  the  purchaser  should 
have  notice  of  the  particular  defense  or  defect,  in  order  to 
be  charged  with  constructive  notice.  It  is  sufficient  if  -he 
has  a  general  notice  that  there  is  something  wrong  with  the 
paper. ^     But  if  he  makes  inquiry  bona  fide  and  to  the  ex- 

Boardman,  J.,  saying:  "  Giving  to  the  words  tlie  broadest  meaning  pos- 
sible, tliey  do  not  imply  that  there  has  been  a  breach  of  the  warranty. 
They  cannot  be  construed  as  notice  to  the  purchaser  of  a  defense  to  the 
note  in  the  hands  of  the  payee.  If  they  do,  it  must  be  because  the  law 
will  presume  a  breach  whenever  there  is  a  warranty.  That  would  be 
preposterous."  Loomis  v.  Moury,  15  N.  Y.  S.  C.  312;  Borden  v.  Clark, 
26  Mich.  412;  Miller  v.  Finley,  26  Mich.  255,  where  a  note  was  given  for 
a  patent  right,  Campbell,  J.,  saying:  "  Whatever  may  have  been  the  ex- 
perience of  our  people  with  itinerant  patent  vendors,  it  cannot  be  prop- 
erly assumed  as  a  fact  that  a  patent  regularly  issued  by  the  department 
lacks  either  novelty  or  utility.  And  as  fraud  can  never  be  presumed 
without  proof,  the  jury  could  not  properly  be  charged  upon  any  theory, 
supported  by  no  evidence  at  all."  See  also  to  same  effect,  Patten  v. 
Gleason,  106  Mass.  439;  Taylor  u.  Curry,  109  Mass.  36;  Sackett  v.  Kel- 
lar,  22  Ohio  St.  554;  Davis  u.  McCready,  17  N.  Y.  230;  Beardslee  v. 
Horton,  3  Mich.  5G0;  Croix  v.  Sibbett,  15  Pa.  St.  238;  Bend  v.  Wietze, 
12  Wis.  611;  Doherty  w.  Perry,  38  Ind.  15;  Hereth  v.  Merchants' Nat. 
Bank,  34  Ind.  380;  Stevenson  v.  O'Neal,  71  111.  314;  Harris  v.  Nicholls, 
26  Ga.  413;  Heard  v.  Dubuque  Co.  Bank,  8  Neb.  16;  Bank  of  Commerce 
V.  Barrett,  -38  Ga.  126;  Kelley  v.  Whitney,  45  Wis.  110. 

1  Haskell  v.  Jones,  86  Pa.  St.  173. 

-  Clark  V.  Thayer,  105  Mass.  217. 

^  Boycev.  Geyer,  2  Mich.  N.  P.  71;  Studebaker  v.  Man.  Co.,  70  Mo. 
274;  Oakley  v.  Ooddeen,  2  F.  &  P.  659.  "  General  or  implicit  notice  is 
where  the  holder  had  notice  that  there  was  some  illegality  or  some  fraud 

519 


§    oOl  TlIK    IMGIITS    OF    IJOXA    FIDE    HOLDFRS.        [CII.  XIV. 

tent  of  his  ability,  without  su))st;intiatiiig  Iho  general  no- 
tice of  defect,  he  can  chiiiu  the  protection  of  u  bonajide 
holder.^ 

§  301.  Constructive  notice  in  respect  to  accomniocla- 
tion  paper. — Mere  knowledge  that  the  instrument  is  ac- 
commodation pnpor  will  not  prevent  the  purchaser  from 
becoming  a  bona  Jide  holder  of  the  instrument.  The  value 
paid  to  the  party  for  whose  accommodation  the  instrument 
was  executed  and  negotiated,  is  sufficient  consideration  to 
bind  the  accommodation  party  to  the  purchaser  for  value. ^ 
But  where  there  has  been  a  diversion  of  the  accommoda- 
tioai  paper  from  the  purpose  and  object  for  which  it  was 
issued,  knowledge  of  this  diversion  by  the  purchaser  will 
preclude  him    from  being  a  bona  fide  holder.^     In   New 

vitiating  tlie  bill,  tliough  he  may  not  have  been  apprised  of  its  precise 
nature.  Thus,  if  when  he  toolc  the  bill  he  were  told  in  express  terms 
that  there  was  something  wrong  about  it,  without  being  told  what  the 
vice  was,  or  if  it  can  be  collected  by  a  jury  from  circumstances  fairly 
warranting  such  an  inference,  that  he  knew,  or  believed,  or  thought,  that 
the  bill  was  tainted  with  illegality  or  fraud,  such  a  general  or  implicit 
notice  will  equally  destroy  his  title."  Byles  on  Bills  (Sharswood,  6th 
ed.)  [*122J  195. 

^  Belmont  Bank  v.  Hoge,  7  Bosworth,  543.  See  Roth  v.  Colvin,  32 
Vt.  125;  Steinhart  v.  Boker,  36  Barb.  284. 

2  Thatchers.  West  River  Nat.  Bank,  19  Mich=  202;  Charles  v.  Mars- 
den,  1  Taunt.  224;  Stephens  v.  Monougahela  Nat.  Bank,  87  Pa.  St.  163, 
Powell  V.  Waters,  17  Johns.  176;  Grant  r.Ellicott,  7  Wend.  227;  Grandin 
V.  Lcroy,  2  Paige,  509;  Mentross  v.  Clark,  2  Sandf.  115;  Jones  v.  Berry- 
hill,  25  Iowa,  289;  Bank  of  Ireland  v.  Bcresford,  6  Dow.  237;  Cronise  v 
Kellogg,  20  III.  11.  And  this  is  also  true,  where  the  purchaser  takes  it 
after  maturity.     See  ante,  §  295. 

2  Thompson  v.  Posten,  1  Duvall,  415;  Stoddard  v.  Kimball,  6  Cush. 
469;  Clark  v.  Thayer,  105  Mass.  216;  Daggett  v.  Whiting,  35  Conn.  372; 
Evans  V.  Kymer,  1  B.  &  Ad.  528;  Key  v.  Flint,  8  Taunt.  21 ;' Roberts  w. 
Eden,  1  Bos.  &  P.  398;  Buchanan  v.  Findlcy,  9  B.  &  C.  738;  Small  o. 
Smitli,  1  Den.  583;  Mohawk  Bank  v.  Corey,  1  Hill,  513;  Gray  v.  Bank  of 
Kentucky,  29  Pa.  St.  365;  Dunn  v.  Weston,  7  Me.  270;  Hidden  v.  Bishop, 
5R.  I.  29;  Hickerson  ^.  Raignell,  2  Heisk.  329,  Fetters  ».  Muncie  Nat. 
Bank,  34  Ind.  251. 
520 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    301 

York,  diversion  of  accommodation  paper  is  so  far  consid- 
ered a  fraud,  as  to  throw  upon  the  purchaser  the  burden  of 
pro\'ing  that  he  had  no  notice  of  the  diversion.^ 

But  it  is  not  every  variation  from  the  instructions  of  the 
accommodation  indorser  that  amounts  to  diversion.  If  the 
accommodation  party  had  any  interest  in  the  special  mode 
of  negotiating  the  paper,  as  to  where  it  was  to  be  used  in 
taking  up  other  paper,  on  which  the  accommodation  party 
was  liable,  it  would  be  an  unwarrantable  diversion,  if  it 
were  used  in  paying  any  other  debt,  or  in  affecting  any 
other  loan. 2  But,  of  course,  the  purchaser  must  know  of 
the  benefit  that  the  accommodation  party  expects  to  derive 
from  the  negotiation  of  the  paper.  Otherwise,  he  can 
claim  to  be  a  bona  fide  holder.^  But  as  long  as  the  diver- 
sion is  not  fraudulent  or  prejudicial  to  the  accommodation 
party,  the  deviation  from  instructions  does  not  affect  the 
title  of  the  indorsee.  If  the  purpose  of  the  accommodation 
has  been  substantially  attained,  the  method  or  mode  of  attain- 
ment will  not  be  considered  objectionable  and  is  certainly  not 
necessarily  fraudulent  or  prejudicial  to  the  accommodation 
party.*     Thus,  it  is  not  a  diversion  to  negotiate  a  note  at  one 

1  Farmers'  &  Citizens'  Nat.  Bank  v.  Noxon,  45  N.  Y.  762 ;  Spencer  v. 
Ballon,  18  N.  Y.  331 ;  Scliepp  v.  Carpenter,  51  N.  Y.  604;  Moore  v.  Ryder, 
65N.  Y.  439;  Comstock  u.  Hier,  73N.  Y.  270;  Grocers' Bank  u.  Penfield, 
14  N.Y.  S.  C.  (7  Hun)  279;  Wardell  v.  Howell,  9  Wend.  170,  Suther- 
land, J.,  saying:  "Where  a  note  has  been  diverted  from  its  original 
destination,  and  fraudulently  put  in  circulation  by  the  maker  or  his 
agent,  the  holder  cannot  recover  upon  it  against  an  accomodation  in- 
dorser, without  showing  that  he  received  it  in  good  faith,  in  the  ordinary 
course  of  trade,  and  paid  for  it  a  valuable  consideration." 

2  Wardell  v.  Howell,  9  Wend.  170;  Moore  v.  Ryder,  65  N.  Y.  440.  In 
such  a  case,  if  the  bank  or  banker  refuses  to  discount  the  paper,  it 
should  be  returned  to  the  accommodation  party.  Kasson  v.  Smith,  8 
Wend.  437-;  Denniston  i?.  Bacon,  10  Johns.  198. 

3  Lamb  v.  Rudd,  37  Iowa,  618. 

*  Duncan  et  al.  v.  Gilbert,  29  N.  J.  L.  521;  Jackson  v.  First  Nat,  Bank, 
42  N.  J.  L.  178;  Wardell  v.  Howell,  9  Wend.  170;  Brooks  v.  Hey,  23  Hun, 

521 


§    302  THE    RIGHTS    OF    BOXA    FIDE    HOLDERS.       [CH.   XIV. 

bank,  when  the  accommodation  maker  or  indorser  directed 
it  to  be  discounted  at  another  bank  or  with  some  other  per- 
son.^ So,  also,  is  it  not  a  diversion  to  pay  pre-existing  debts 
with  accommodation  paper  given  for  the  purpose  of  effect- 
ing a  loan.'^  It  is  not  a  diversion  where  a  paper,  intended 
to  be  discounted,  was  used  as  collateral  security.^  Nor  can 
the  accommodation  party  complain,  if  a  note  given  as  a 
collateral  security  should  be  sold  by  the  pledgee  in  viola- 
tion of  the  rights  of  all  prior  parties,  as  long  as  the  pur- 
chaser was  not  aware  of  this  diversion.* 

§  302.  Lis  pendens  —  Garnishment  and  trustee  pro- 
cess —  Public  records.  —  If  there  is  nothing  on  the  face  of 
the  paper  to  indicate  any  defect  of  title,  the  constructive  no- 
tice arising  out  of  a  pending  suit,°  or  out  of  the  registration 

372;  Purchase  v.  Mattison,  6  Duer,  87;  Briggs  v.  Boyd,  37  Vt.  538.  See 
Scliepp  V.  Carpenter,  51  N.  Y.  604;  Reed  v.  Trentmau,  53  Ind.  438. 

i  Mohawk  Bank  v.  Corey,  1  Hill,  513;  Bank  of  Chenango  u.  Hyde,  4 
Cow.  5(J7;  Powell  v.  Walters,  17  Johns.  176. 

2  Quin  V.  Hard,  43  Vt.  375.  "The  accommodation  party  must  have 
some  interest  in  the  application  of  the  money,  otherwise  he  is  not  in  con- 
dition to  contend  successfully  that  there  has  been  a  misapplication  of 
it,  or  of  the  security  on  which  it  was  to  be  raised."  See  also,  to  same 
effect,  Felters  v.  Muncie  Nat.  Bank,  34  Ind.  254.  But  see  Farmers',  etc., 
Bank  v.  Hathaway,  36  Vt.  539,  in  which  it  is  held  otherwise  where  the 
paper  was  made  payable  to  the  person  to  whom  it  was  intended  to  be 
discounted. 

3  Dunn  V.  VTestern,  71  Me.  270;  De  Zeng  u.  Fyfe,  I  Bosw.  336;  Rob- 
bins  V.  Richardson,  2  Bosw.  253;  Rutland  Bank  v.  Buck,  5  Wend.  66; 
Jackson  v.  First  Nat.  Bank,  42  N.  J.  L.  178,  Kimbro  v.  Lytle,  10  Yerg. 
417;  Lord  ^.  Ocean  Bank,  20  Pa.  St.  384,  Black,  C.  J,,  saying:  "The 
maker  of  an  accommodation  note  cannot  set  up  want  of  consideration  as 
a  defense  against  it  in  the  hands  of  a  third  person,  though  it  be  there 
as  collateral  security  merely.  He  who  chooses  to  put  himself  in  the 
front  of  a  negotiable  instrument,  for  the  bencflt  of  his  friend,  must  abide 
the  consequence,  and  has  no  more  right  to  complain  if  his  friend  accom- 
modates himself  by  pledging  it  for  an  old  debt,  than  if  he  had  used  it 
in  any  other  way. 

*  Dawson  v.  Goodyear,  43  Conn.  548. 

"  County  of  Warren  v.  Mavey,  97  U.  S.  lOG;  County  of  Cass  v.  Gillett, 
522 


CH.  XIV.]       THE    EIGHTS    OF   BONA   FIDE   HOLDERS.  §    303 

of  some  lien  or  mortgage  —  containing  recitals  which  show 
equitable  defenses  —  held  as  a  security  for  the  commercial 
paper,^  will  have  no  effect  upon  the  title  of  the  purchaser 
as  a  bo7ia  fide  holder  of  the  paper,  unless  the  paper  was  at 
the  time  of  transfer  overdue,  when  it  ceases  to  be  negoti- 
able.^ 

The  same  principles  have  been  applied  to  the  garnish- 
ment and  trustee  process,  when  such  proceedings  were  in- 
stituted against  the  maker  to  compel  him  to  pay  the  face  of 
the  note  to  a  creditor  of  the  payee  or  other  subsequent 
holder,,  But  although  it  has  been  held,  under  some  of  the 
State  statutes,  that  the  garnishment  can  prevail  against  a 
bona  fide  holder  under  the  defendant  payee  of  the  note,  the 
better  opinion  is  that  the  maker  cannot  be  compelled  to  pay 
the  note  to  the  garnisher,  unless  he  can  show  that  the  note 
has  not  been  transferred  to  a  bona  fide  holder.^ 

§  303.  Burden  of  proof,  as  to  bona  fide  ownership. — 

It  is  also  an  important  question  in  this  connection  on  whom 
the  burden  of  proof  rests,  to  prove  or  disprove  the  fact  of 
bona  fide  ownership.  The  bona  fide  holder  is  not  subject  to 
equitable  defenses  so-called.  But  those  defenses  may  affect 
his  title  if  he  fails  to  prove  his  bona  fide  possession  when 
the  law  throws  upon  him  the  burden  of  proof.  It  is  there- 
fore necessary  to  state  with  precision  the  burden  of  proof 
in  all  its  details. 


100  U.  S.  585;  Leitch  v.  Wells,  48  N.  Y.  585;  V>rintons  v.  Westfeldt,  22 
Ala.  560;  May  berry  u.  Morris,  62  Ala.  113;  Kieffer  v.  Ehler,  18  Pa.  St. 
388;  Hill  v.  Kraft,  29  Pa.  St.  186;  Day  v.  Zimmerman,  88  Pa.  St.  188; 
Murray  v.  Lylburn,  2  Johns.  Ch.  441;  Stone  v.  Elliott,  11  Ohio  St.  252;  Re 
Great  Western  Tel.  Co.,  5  Biss.  363;  Durant  v.  Iowa  Co.,  1  Woolw.  69; 
Mlms  V.  West,  38  Ga.  18. 

1  Minell  v.  Read,  26  Ala.  736. 

2  Mayberry  v.  Morris,  62  Ala.  117;  Mills  v.  Stewart,  12   Ala.  96;  Kel- 
logg V.  Fancher,  23  Wis.  21. 

3  See  ante,  §  251. 

523 


§    303  THE    RIGHTS    OF    BONA    FIDE    UULDEIIS.        [CH.  XIV. 

The  possession  of  the  paper  by  an  indorsee  or  by  an  as- 
signee, where  the  paper  is  payable  to  bearer  or  indorsed  in 
blank,  is  universally  held  to  be  prima  facie  proof  of  bona 
fide  ownership,  and  the  burden  of  proving  the  contrary  is 
'thrown  upon  the  defendant  in  the  action.^  But  the  posses- 
sion of  an  instrument,  payable  to  order,  unindorsed  by  the 
payee  or  the  last  indorsee,  is  not  prima  facie  proof  of  bona 
fide  ownership,^  unless  it  be  in  the  possession  of  the  per- 
sonal representatives  of  a  deceased  payee  or  indorsee.'^ 
Nor  is  it  prima  facie  proof  of  bona  fide  ownership  for  a 
prior  indorser  to  have  possession.  He  must  show  good 
title.* 

It  has  also  been  held  not  to  shift  the  burden  of  proof  to 
the  holder,  if  it  be  proven  that  the  paper  was  executed 
w'ithout  consideration  between  the  original  parties,  at  least 
in  the  cases  where  the  instrument  is  payable  to  bearer,  and 
is  held  by  an  indorsee.^     But  it  has  been  held  that  if  the 

1  Commissioners  w.  Clark,  94  U.  S.  285;  Collins  r.  Gilbert,  94  U,  S.753; 
Brown  v.  SpofEord,  95  U.  S.  478;  Faulkner  v.  Ware,  34  Ga.  498  (case  of 
bill  payable  to  bearer)  ;  Valletti?.  Parker,  6  Wend.  615;  Horton  v.  Bayne, 
52  Mo.  531;  Johnson  w.  McMurry,  72  Mo.  282;  Holme  v.  Karsper,  5  Binn. 
469;  Hallu.  Allen,  37  lud.  541 ;  Jackson  v.  Love,  82  N.  C.  405;  Merchants' 
&  P.  N.  B.  V.  Trustees,  62  Ga.  271 ;  Blum  v.  Loggins,  53  Tex.  136;  Davis 
V.  Bartlett,  12  Ohio  St.  544;  McCann  v.  Lewis,  9  Cal.  246;  Palmer  tj.  Nas- 
sau Bank,  78  111.  380;  In  re  Tallahassee  Man.  Co.,  64  Ala.  593. 

2  Dom  V.  Parsons,  56  Mo.  601 ;  Gibson  v.  Miller,  29  Mich.  355. 

3  Scovllle  V.  Landon,  50  N.  Y.  686.  See  as  to  possession  of  the  heir, 
King  V.  Gottschalk,  21  Iowa,  512. 

*  Palmer  v.  Whitney,  21  Ind.  61 ;  Mauldin  v.  Branch  Bank,  2  Ala.  502. 
See  also  Oberle  v.  Schmidt,  86  Pa.  St.  221. 

5  Commissioners r. Clark,  94 U.S.  285;  Collins  v.  Gilbert,  94  U.  S.  757; 
Mechanics',  etc.,  Bank  v.  Crow,  60  N.  Y.  85;  Grocers'  Bank  v.  Penfleld,  14 
N.  Y.  S.  C.  (7  Huu)  279;  Goodman  v.  Simonds,  20  How.  343;  Bank  of 
Pittsburg  V.  Neal,  22  Ind.  96;  Murray  v.  Lardner,  2  Wall.  110;  Baxter  w. 
Ellis,  57  Me.  180;  Cummings  i?.  Thompson,  18  Minn.  252;  Fletchers. 
Cushee,  32  Me.  587;  Kellogg  v.  Curtis,  69  Me.  212;  Magee  v.  Badger,  34 
N.  Y.  247 ;  Belmont  Branch  Bank  v.  Hoge,  35  N.  Y.  65 ;  Cropscy  v.  Averill,  8 
Neb.  157;  Organ  Co.  v.  Boyle,  10  Neb.  409;  Harger  v.  Worral,  69  N.  Y. 
370;  Duerson's  Admr.  v.  Alsop,  27  Gratt.  248;  Wilson  v.  Lazier,  11  Gratt. 
524 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    303 

instrument  is  payable  to  bearer  there  is  nothing  on  the  face 
of  the  instrument  to  indicate  that  it  has  been  transferred 
and  hence  proof  of  want  of  consideration  will  throw  upon 
the  holder  the  burden  of  proving  that  he  is  a  bona  fide 
holder.^  It  would  seem  to  be  almost  impossible  for  the 
maker  to  show  want  of  consideration,  without  pointing  out 
the  additional  fact  that  the  instrument  was  delivered  to 
some  one  other  than  the  present  holder.  Furthermore,  the 
reason  assigned  for  the  Justification  of  this  exception,  is  as 
applicable,  when  there  is,  as  when  there  is  no,  considera- 
tion between  the  original  parties,  and  has  no  more  weight  in 
one  case  than  in  the  other. 

But  when  fraud  or  illegality  is  proven  to  taint  the  original 
transaction,  the  difficulty  of  proving  that  the  holder  has 
knowledge  of  the  same,  and  the  usual  rapidity  of  transfer 
of  such  instruments,  for  the  purpose  of  realizing  something 
out  of  the  transaction,  would  seem  to  justify  the  shifting 
of  the  burden  of  proof,  and  the  requirement  that  the  holder 
should  show  affirmatively  that   he   is  a   bona  fide  holder. ^ 

478;  EUicott  v.  Martin,  6  Md.  509;  Knight  v.  Pugh,  4  Watts  &  S.  445; 
Sloan  V.  Union  Banking  Co.,  67  Pa.  St.  479;  Matliews«.  Poythress,  4  Ga. 
287;  Mills  v.  Barber,  1  M.  &  W.  425;  Low  v.  Chifney,  1  Bing.  N,  C.  267; 
Smith  V.  Braine,  16  Q.  B.  244;  Cook  v.  Helms,  5  Wis.  107;  Greeuaus  v. 
Wheeler,  6  Tex.  515;  Holemau  v.  Hobson,  8  Humph.  127;  Davis  v.  Bart- 
lett,  12  Ohio  St.  537.  See  contra,  Mayor  of  Wetumpka  v.  Wetumpka 
Wharf  Co.,  63  Ala.  611. 

1  Bissell  V.  Morgan,  11  Cush.  198. 

2  Smith  V.  Sac  County,  11  Wall.  139;  Commissioners  v.  Clark,  94  U. 
S.  285;  Collins  v.  Gilbert,  94  U.  S.  761 ;  Perrin  v.  Noyes,  39  Me.  384;  Cut- 
tle V.  Cleaves,  70  Me.  256;  Kellogg  v.  Curtis,  69  Me.  212;  Roberts  v.  Lane, 
64  Me.  108;  Fitch  v.  Jones,  32  Eug.  L.  &  Eq.  134;  Smith  v.  Braine,  3  Eug. 
L.  &  Eq.  380;  s.  c.  16.  Q.  B.  244;Conley  v.  Winsor,  41  Mich.  253;  Sperry 
V.  SpaukUng,  45  Cal.  544;  Redington  u.  Wood,  45  Cal.  406;  Devlin  t\ 
Clark,  31  Mo.  22;  Horton  v.  Bayne,  52  Mo.  531;  Johnson  v.  McMurry,  72 
Mo.  282;  Fuller  i?.  -Hutchins,  10  Cal.  526;  McCliutock  v.  Cummins,  2  Mc- 
Lean, 98;  Vathir  v.  Zaue,  6  Gratt.  246;  Hutchison  v.  Bogg,  28  Pa.  St. 
294;  Sloan  v.  Union  Banking  Co.,  67  Pa.  St.  470;  Sistermans  v.  Field,  9 
Gray,  331;  Thompson  v.  Armstrong,  7  Ala.  256;  Ross  v.  Drinkard,  35  .Ala. 
434;  Kelly  v.  Ford,  4  Iowa,  140;  Harbison  v.  Bank  of  Indiana,  28  lud. 

525 


§    303  THE    RIGHTS    OF    I50XA    FIDE    HOLDERS.        [CH.   XIV. 

But  in  order  that  the  proof  of  fraud  may  shift  the  burden 
of  proof,  it  must  be  a  fraud  committed  upon  the  maker; 
fraud  against  the  payee  or  indorsee  is  insufficient. ^ 

The  burden  of  proof  is  also  shifted  to  the  holder,  when  it 
is  shown  that  the  instrument  has  been  stolen  or  lost.'^  But 
the  holder,  in  the  case  of  fraud  or  illegality  being  proven, 
establishes  his ^^remajTacee  case  again,  by  showing  that  he 
paid  full  value  for  it  and  took  it  in  the  ordinary  course  of 
business,  and  before  maturity.  He  is  not  required  to  prove 
that  he  took  the  paper  without  notice  of  the  fraud  or  ille- 
gality. The  burden  of  proving  notice  is  thrown  upon  the 
defendant.  Although  there  are  decisions  to  the  contrary,^ 
the  weight  of  authority  supports  the  doctrine  here  laid 
down.* 


133;  Merchants'  &  Planter's  Nat.  Bank  v.  Trustees,  62  Ga.  271;  Duerson 
V.  Alsop,  27  Gratt.  249;  Boyd  v.  Mclvor,  11  Ala.  822;  Perkins  v.  Prout,  47 
N.  H.  387;  Woodhull  v.  Holmes,  10  Johns.  231;  McKesson  u.  Stanberry, 
3  Ohio  St.  156;  Hall  v.  Featherstone,  3  Hurl.  &  N.  284;  Bailey  v.  Bidwell, 
13  M.&W.  73;  National  Bank  t-.  Kirby,  108  Mass.  497;  Emerson  v.  Burns, 
114  Mass.  348;  Naples  v.  Brown,  48  Pa.  St.  458. 

1  Kinney  v.  Kruse,  28   Wis.  183.     See  Atlas  Bank  v.  Doyle,  9  R.  I.  76. 

2  Union  Nat.  Bank  v.  Barber,  56  Iowa,  559;  Worcester  Co.  Bank  t). 
Dorchester  Bank,  10  Cush.  488;  Mathews  v.  Poythress,  4  Ga.  287;  Mer- 
chants' &  P.  Nat.  Bank  v.  Trustees,  62  Ga.  271. 

3  Tilden  v.  Barnard,  43  Mich.  376,  Marston,  J. 

*  Davis  V.  Bartlett,  12  Ohio  St.  541,  Sutliff,  C.  J.,  saying:  "The  case 
of  Monroe  17.  Cooper,  5  Pick.  412,  is  also  relied  upon  by  the  defendants  in 
this  case  as  an  authority.  That  was  an  action  by  the  indorsee  upon  a 
negotiable  note  against  the  members  of  a  partnership  company,  by  whom 
the  note  purported  to  be  made.  Two  of  the  three  partners  appeared, 
and  pleaded  the  general  issue,  and,  on  the  trial,  offered  to  prove  that  the 
note  was  made  by  the  other  partner,  who  had  made  default  in  the  case, 
for  his  own  benefit,  and  not  for  the  benclit  or  on  account  of  the  com- 
pany or  with  the  knowledge  of  the  other  partners;  but  as  the  defendants 
did  not  offer  to  prove,  also,  that  the  note  was  due  when  indorsed  to  the 
plaintiff,  or  that  he  had  knowledge  of  the  facts,  the  judge,  on  the  trial  of 
the  case,  was  of  the  opinion  that  the  facts  so  proposed  to  be  proved  did 
not  amount  to  a  defense,  and  excluded  the  proof.  The  Supreme  Court, 
in  revising  this  opinion,  by  Wilde,  J.,  held  that  the  defendants  had  the 
right  to  prove,  if  they  could,  that  fraud  was  practiced  in  the  inception  of 
526 


CH.  XIV.]       THE    RIGHTS    OF   BONA    FIDE    HOLDERS.  §    304 

§  804 .  The  rights  aud  powers  of  pledgees .  —  It  has  been 
already  fully  explained,  when  pledgees  are  held  to  be  bona 
Jide  holders  of  commercial  paper. ^  Suffice  it  to  say  here 
that  they  are  generally  held  to  be  bona  fide  holders  for 
value,  whether  the  paper  is  pledged  for  an  antecedent  or 
contemporaneous  indebtedness. 

So  far  as  subsequent  purchasers  for  value  and  without 
notice  are  concerned,  the  rights  aud  powers  of  pledgees  do 
not  differ  from  the  rights  and  powers  of  any  other  bona 
fide  holder.  The  transfer  by  the  pledgee  will  give  a  good 
title  to  the  bona  fide  purchaser.  But  between  the  original 
parties,  and  as  to  subsequent  indorsees  and  transferees 
having  notice,  the  rights  and  powers  of  the  pledgee  differ 
very  essentially  from  those  of  the  ordinary  indorsee. 

The  pledge  being  made  for  the  purpose  of  securing  the 
payment  of  a  debt,  the  pledgee  takes  the   paper  somewhat 

the  note,  or  that  it  was  fraudentty  put  iu-  circulation.  And  the  judge 
adds :  *  This  fact  being  established  will  throw  upon  the  plaintiff  the 
burden  of  proof  to  show  that  he  came  by  the  possession  of  the  note  fairly 
and  without  any  knowledge  of  the  fraud.'  There  can  be  no  doubt  that 
the  judgment  of  the  Supreme  Court,  in  this  case  also,  was  strictly  correct ; 
and  if  by  the  burden  of  proof  to  show  possession  of  the  note  fairly  and 
without  knowledge  of  the  fraud,  he  only  meant  that  upon  the  defendants 
proving  the  note  to  have  been  fraudulently  executed  and  put  in  circulation, 
that  it  was  incumbent  upon  the  plaintiff  to  prove  that  he  received  the 
negotiable  paper  before  due  in  the  usual  course  of  trade,  upon  a  valuable 
consideration,  the  remark  of  Judge  Wilde  is  strictly  correct,  and  conso- 
nant with  the  authorities  to  which  he  refers ;  but  if  his  remark  is  to  be 
understood  as  intimating  that  the  rule  in  such  a  case  imposes  any  fur- 
ther burden  upon  the  plaintiff  than  to  prove  he  purchased  and  received 
the  transfer  of  the  negotiable  paper  before  due,  in  the  usual  course  of 
trade,  bona  fide,  and  upon  a  valuable  consideration,  it  is  not  only  not 
sustained  by,  but  is  opposed  to,  the  authorities  to  which  he  refers." 
See  also,  to  the  same  effect,  Kellogg  v.  Curtis,  69  Me.  214;  Harbison  v. 
Bank,  72  Ind.  133;  Battles  v.  Landenstager,  84  Pa.  St.  446;  Tod  v.  Wick, 
36  Ohio  St.  390;  Johnson  v.  McMurry,  72  Mo.  282.  In  Wortendyke  v. 
Meehan,  9  Neb.  229,  where  holder  paid  value,  it  was  held  that  he  could 
not  recover,  since  he  did  not  deny  having  knowledge  of  the  illegalty. 
1  See  ante,  §§  166-168. 

527 


§    304  THE    RIGHTS    OF    BONA    FIDE    HOLDERS.        [CH.  XIV. 

in  the  character  of  a  trustee.  He  is  entitled  only  to  that 
part  of  the  face  value  of  the  collateral  security,  which  may 
be  necessary  to  satisfy  his  own  claim.  Although  in  some 
of  the  States  it  is  held  that  he  can  only  recover  of  the 
parties  to  the  security  the  amount  of  his  own  claim,  leaving 
the  balance  to  be  collected  by  the  pledgor,^  the  better 
opinion  is  that  he  can  recover  the  whole  of  the  face  value, 
and  hold  the  balance  as  trustee  for  the  pledgor.'^  But  the 
pledgee  is  a  bona  fide  holder  only  in  respect  to  the  amount 
of  his  claim  against  the  pledgor ;  and  if  there  be  a  good 
defense  to  an  action  on  the  collateral  by  the  pledgor,  the 
recovery  of  the  pledgee  will  be  limited  to  the  amount  of  his 
claim. ^  For  the  same  reasons  an  accommodation  indorser 
or  maker  is  liable  to  an  immediate  pledgee  only  to  the 
amount  of  his  claim  against  the  pledgor,* 

In  the  collection  and  maintenance  of  actions  on  the 
pledge,  the  pledgee  is  charged  with  the  exercise  of  ordinary 
diligence  in  saving  and  protecting  the  rights  of  the  pledgor. 
And  should  he,  by  his  negligence  or  by  the  negligence  of 
his   agents,  fail  to  make  the  proper  presentment  for  pay- 

Steerc  r.  Benson,  2   Bradw.  560;  McCrnm  v.  Corby,  11   Kan.    4G4; 
G.  S    Kan.,  ch.  lU,  §  14. 

2  Bank  of  Charleston  v.  Chambers,  11  Rich.  657;  Tarbell  v.  Sturte- 
vant,  26  Vt  513;  Union  Nat.  Bank  v.  Roberts,  45  Wis.  373. 

3  Stoddard  v.  Kimball,  6  Cush.  469;  Curtis  t?.  Mohr,  18  Wis.  645;  Ex- 
change Bank  v.  Butuer,  60  Ga.  654;  Grant  v.  Kidwell,  30  Mo.  455;  Will- 
iams V.  Smith,  2  Hill,  301;  White  v.  Springfleld  Bank,  3  Sandf.  222;  N. 
Y.  M.  I.  W.  V.  Smith,  4  Duer,  362;  Youngs  v.  Lee,  12  N.  Y.  551 ;  Allaire  v. 
Ilartshome,  21  N.  J.  L.  665;  Duncan  et  a1.  ■;;.  Gibert,  30  N.  J.  L.  527; 
Chicopce  Bank  v.  Chapin,  8  Met.  40;  Fisher  v.  Fisher,  98  Mass.  303; 
Kingsland  v.  Tryor,  33  Ohio  St.  19;  First  Nat,  Bank  v.  Fowler,  36  Ohio 
St.  524;  First  Nat.  Bank  i7.  Werst,  52  Iowa,  684;  Vallette  v.  Mason,  1 
Smith  (Ind.),  89. 

*  Fisher  v.  Fisher,  98  Mass.  303;  Atlas  Bank  v,  Doyle,  9  R.  I.  76; 
Gordon  v.  Boppe,  55  N.  Y.  6(;5;  Piatt  v.  Beebe,  57  N.  Y.  339;  Buchanan  v. 
International  Bank,  78  111.  500;  Duncan  etal.  v.  Gilbert,  30  N.  J.  L.  527; 
Maitland  t>.  Citizens' Nat,  Bank,  40  Md.  510;  Mechanics',  etc.,  Bank  v. 
Caruett,  27  La.  Ann.  177. 
528 


CH.  XIV,]       TUE    EIGHTS    OF    BONA    FIDE    HOLDERS.  §    304 

ment,  or  to  give  notice  of  dishonor  to  prior  indorsers,  he 
is  liable  to  the  pledgor  for  all  damage  he  might  suffer  in 
consequence  of  his,  the  pledgee's,  delinquencies  of  that 
nature.^  But  mere  delay  in  bringing  suit  on  the  collateral 
security  is  no  negligence. ^  On  the  contrary,  the  pledgee  is 
not  obliged  to  sue  at  all*  on  the  collateral  security.  He 
may  instead  bring  his  action  against  his  own  debtor,  with- 
out first  proceeding  against  the  parties  to  the  collaterals. 

Although  it  has  been  held  that  the  pledgee  has  the  right 
to  sell  all  sorts  of  stocks  and  annuities ;  ^  railroad,  municipal 
and  other  coupon  bonds,*  the  general  rule  is  that  the 
pledgee  can  not  sell  commercial  paper  for  the  satisfaction 
of  the  debt,  particularly  bills  of  exchange  and  promissory 
notes. ^  But  even  where  the  debt  matures  before  the  col- 
lateral, the  pledgee  is  held  not  to  have  the  power  to  sell  the 

1  Russell  V.  Hester,  10  Ala.  535;  Peacock  v.  Purcell,  14  C.  B.  (^n.  s.) 
728;  Pickens  v.  Yarborough,  26  Ala.  417;  Powell  v.  Henry,  27  Ala.  612; 
Jennison  v.  Parker,  7  Mich.  355;  Colquitt  ■;;.  Stultz,  65  Ga,  305;  Roberts 
V.  Thompson,  14  Ohio  St.  1;  Betterton  v.  Roope,  3  B.  J.  Lea,  216;  Bonta 
V.  Curry,  3  Bush,  678;  Slevin  v.  Morrow,  4  Ind.  425;  Wakeman  v.  Gowcly, 
10  Bosw.  208.  But  the  instructions  of  the  pledgor,  and  the  agreement  of 
the  parties,  may  vary  very  materially  the  duties  of  the  pledgee  in  this 
regard.     Lee  v.  Baldwin,  10  Ga.  SOS. 

2  Marscliuetze  v.  "Wright,  50  Wis.  175;  Cherry  v.  Miller,  7  B.  J.  Lea, 
305. 

3  Tucker  v.  Wilson,  1  P.  Wms.  261;  s.  c.  1  Bro.  P.  C.  494;  Lockwood 
V.  Ewer,  2  Atk.  303.  In  New  York  it  is  held  that  there  must  be  a  demand 
for  the  payment  of  the  debt,  before  there  can  be  a  sale  of  stock.  Wilson 
V.  Little,  2  N.  Y.  443. 

^  Brown  v.  Ward,  3  Duer  660;  Morris  Canal  v.  Lewis,  1  Beas.  322; 
Alexanderia,  etc..  Railroad  v.  Burke,  22  Gratt.  254;  Jerome  v.  Carter,  94 
U.  S.  734.  But  see  contra,  as  to  railroad  bonds,  Joliet  Iron  Co.  v. 
Scioto  Brick  Co.,  82  111.  548;  and,  as  to  municipal  orders,  Whittaker  v. 
Charleston  Gas  Co.,  16  W.  Va.  717. 

*  Wheeler  v.  Newbould,  16  N.  Y.  392,  Brown,  J.,  saying:  "  A  creditor 
holding  such  property  in  trust  for  the  use  of  his  debtor  and  offering  it 
for  sale  in  satisfaction  of  his  debt  can  hardly  fail  to  sacrifice  it."  Berg 
V.  Foster,  —  Pa.  St.  —  (1884).  It  is  held  that  he  may  sell  the  collateral 
security  after  maturity.   Potter  ■;;.  Thompson,  10  R.  I. 

34  529 


§    305  THE    RIGHTS    OF    BONA    FIDE    HOLDERS.        [CH.  XIV. 

collateral.^  It  may  be  said  that  a  court  of  equity  may  au- 
thorize the  sale  of  the  collateral,  where  the  other  remedies 
of  the  pledgee  are  inadequate,  as  where  the  pledgor  resided 
in  another  State,  and  had  no  other  property  within  the 
jurisdiction  of  the  pledgee's  courts.^ 

§  305.  Bona  fide  holder  of  commercial  paper  secured 
by  mortgage. — Notwithstanding  the  contradiction  of  the 
authorities  in  respect  to  the  legal  character  of  a  mortgage  of 
real  estate,  it  is  universally  conceded  that  the  assignment  of 
the  debt  will  carry  to  the  assignee  the  beneficial  interest 
under  the  mortiraffe.  Althousrh  it  is  still  held  in  those 
States,  which  have  to  a  greater  or  less  degree  discarded  the 
common-law  theory,  that  an  effectual  legal  assignment  of 
the  mortgage  requires  a  deed  proved  and  acknowledged  like 
all  other  deeds  of  conveyance,  it  is  there  held  that,  the  debt 
being  the  principal  thing  and  the  mortgage  only  a  security 
or  lien,  an  assignment  of  the  debt  will  operate  as  an  equit- 
able assignment  of  the  mortgage,  binding  upon  all  persons 
having  notice,  and  giving  to  the  assignee  the  power  in 
equity  to  exercise  all  the  rights  of  the  mortgagee.^     But  as 

1  Brown  v.  Ward,  3  Duer,  GGO.  But  see,  contra,  Richards  v.  Davis,  7 
Am.  Law  Reg.  483. 

2  Donohue  v.  Gamble,  38  Cal.  354;  Whittaker  v.  Charleston  Gas  Co., 
16  W.  Va.  716;  Wheeler  v.  Newbould,  16  N.  Y.392;  Nelson  v.  Wellington, 
5  Bosw.  178;  Brookman  v.  Metcalf,  5  Bosw.  429. 

3  Wolcott  V.  Winchester,  15  Gray,  461 ;  Vose  v.  Handy,  2  Greenl.  322-, 
Southerin  v.  Mendum,  5  N.  H.  420;  Northy  v.  Northy,  45  N.  H.  140; 
Blake  v.  Williams,  36  N.  H.  39;  Langdon  v.  Keith,  9  Vt.  290;  Keyes  v. 
Wood,  21  Vt.  331;  Lawrence  v.  Knap,  1  Root,  248;  Dudleys.  Caldwell, 
19  Conn.  218;  Neilson  v.  Blight,  1  Johns.  Cas.  205;  Evertson  v.  Booth, 
19  Johns.  491;  Parmelee  v.  Daun,  23  Barb.  461;  Kortright  v.  Cady,  21 
N.  Y.  261;  Wilson  v.  Troup,  2  Cow.  242;  Craft  v.  Webster,  4  Rawle,  242; 
Dauley  v.  Hays,  17  Serg.  &  R.  400;  Partridge  v.  Partridge,  38  Fa.  St.  78; 
Hyman  y.  Devereus,  63  N.  C.  624;  MuUer  u.  Wadlington,  6  S.  C.  242; 
Wright  V.  Eaves,  10  Rich.  Eq.  585;  Scott  v.  Turner,  15  La.  Ann.  346; 
Wilson  V.  Heyward,  2  Fla.  27;  s.  c.  6  Fla.  191;  Emanuel  v.  Hunt,  2  Ala. 
190;  Graham  v.   Newman,  21   Ala.  497;  Dick  v.  Mawry,  17  Miss.  448; 

530 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §     305 

a  o-eneral  proposition,  such  an  assignee  acquires  no  legal 
interest,  and  can  therefore  exercise  none  of  the  rights  of  a 
legal  owner,  such  as  the  maintenance  of  an  action  of  eject- 
ment or  a  writ  of  entry. ^  A.nd  where  the  mortgage  is 
given  to  secure  two  or  more  debts,  the  assignment  of  one 
of  them  will  operate  as  an  assignment  of  a  -pro  tanto  share 
in  the  mortgage,  unless  it  is  the  expressed  intention  of  the 
parties  that  the  entire  mortgage  security  should  be  retained 
for  the  benefit  of  the  remaining  debts.^  This  is  always  the 
case,  in  the  absence  of  an  express  contract,  where  the  debts 
secured  by.  the  same    mortgage  fall  due  at  the  same  time. 

Holmes  v..  McGinty,  44  Miss.  94;  Martin  v.  Reynolds,  6  Mich.  70;  Ladue 
V.  R.  R.  Co.,  13  Mich.  39G;  U.  S.  Banli  v.  Covert,  13  Ohio,  240;  Paine  v. 
French,  4  Ohio,  318;  Miles  v.  Gray,  4  B.  Moa.  417;  Burdett  v.  Clay,  8  B. 
Mon.  287;  Lucas  v.  Harris,  20  111.  165;  Mapps  v.  Sharpe,  32  111.  105;  La- 
berge  v.  Chauvin,  2  Mo.  179;  Andersons.  Baumgartner,  27  Mo.  80;  Pot- 
ter v.  Stevens,  40  Mo.  229;  Burton  v.  Baxter,  7  Blackf.  297;  French  v. 
Turner,  15  Ind.  59;  Crow  v.  Vance,  4  Iowa,  434;  Bank  of  Indiana  v. 
Anderson,  14  Iowa,  544;  Fisher  u.  Otis,  3  Chandl.  83;  Anderson  v.  Hart, 
17  Wis.  297;  Ord  v.  McKee,  5  Cal.  575;  "Willis  v.  Farley,  24  Cal.  497; 
Kutz  V.  Sponable,  6  Kan.  395. 

1  Cottrell  V.  Adams,  2  Biss.  351;  Young  v.  Miller,  6  Gray,  152;  Dwinel 
V.  Perley,  32  Me.  197;  Edgerton  u.  Young,  43  111.  464;  Graham  t?.  New- 
man, 21  Ala.  497;  Partridge  v.  Partridge,  38  Pa.  St.  78;  Warden  v. 
Adams,  15  Mass.  232.  In  the  code  States,  however,  where  all  actions 
are  brought  in  the  name  of  the  party  beneficially  interested,  the  equit- 
able assignee  may  enforce  the  mortgage  in  his  own  name,  in  any  sort  of 
remedy.  Gower  v.  Howe,  20  Ind.  306;  Langston  v.  Love,  11  Iowa,  580; 
Rankin  v.  Major,  9  Iowa,  297;  Clearwater  u.  Rose,  1  Blackf.  138;  Paine 
V.  French,  4  Ohio,  320;  Garland  v.  Richeson,  4  Rand.  266;  Kurtz  v. 
Sponable,  6  Kan.  395.  And  in  those  States  where  the  legal  title  of  the 
mortgage  does  not  pass  with  the  assignment  of  the  debt,  equity  may 
compel  the  holder  of  the  legal  title  to  transfer  it  to  the  assignee  of  the 
debt,  or  to  maintain  the  suits  necessary  for  the  protection  of  the 
assignee.  Wolcott  v.  Winchester,  15  Gray,  461 ;  Crane  v.  March,  4  Pick. 
131;  Mount  v.  Suydara,  4  Sandf.  Ch.  399;  Lyon's  App.,  61  Pa.  St.  15; 
Baker  v.  Terrell,  8  Minn.  195;  Morris  v.  Bacon,  123  Mass.  58;  Strong  t?. 
Jackson,  123  Mass.  60;  Burhans  v.  Hutcheson,  — Kan.  —  (1881.) 

2  Donley  v.  Hays,  17  Serg  &  R.  400;  Belding  v.  Manly,  21  Vt.  550; 
Miller  v.  Rutland,  etc.,  R.  R.  Co.,  40  Vt.  39;  Keyes  v.  Woods,  21  Vt.  331; 
Cooper  V.  Ulman,  Walk.  (Mich.)  251;  Wardens.  Adams,  15   Mass. 233. 

531 


§   305        THK  uiGiiTS  or  bona  riui-:  holders,      [ch.  xiv. 

But  where  they  fall  due  at  different  periods,  in  very  many 
of  the  States  one  has  priority  over  the  other  in  the  order  in 
which  they  fall  due.  The  effect  is  the  same  as  if  there  had 
been  successive  and  independent  mortgages,  one  for  each 
debt.^  It  has  also  been  held,  but  likewise  denied,  that  the 
mortgage  debts  in  the  hands  of  assignees  will  have  priority 
in  the  orcierof  their  assignment.'^ 

If  the  instrument  of  indebtedness,  which  is  secured  by 
the  mortgage,  is  non-negotiable,  such  as  a  bond,  the  as- 
signee will  take  both  it  and  the  mortgage  subject  to  all  the 
defenses  which  might  be  set  up  against  the  jnortgagee.^ 
But,  in  some  of  the  States,  if  the  instrument  of  indebted- 

'  Stanley  v.  Beatty,  4  Ind.  134;  Hough  v.  Osborne,  7  Ind.  140;  McVay 
V.  Bloodgood,  9  Port.  547;  U.  S.  Bank  v.  Covert,  13  Ohio,  240;  Wood  v. 
T:ask,  7  Wis.  5GG;  Preston  v.  Hodges,  50  111.  5G;  Funk  v.  McReynoIds, 
33  111.  497;  Mitchell  v.  Laden,  36  Mo.  532;  Thompson  w.  Field,  38  Mo. 
325;  Langster  v.  Love,  11  Iowa,  580;  Reeder  v.  Carey,  13  Iowa,  274; 
Isett  u.  Lucas,  17  Iowa,  506;  G.  Wathmays  u.  Ragland,  1  Rand.  406; 
Wilson  V.  Hayward,  6  Fla.  171 ;  Hunt-y.  Styles,  10  N.  H.  466 ;  Larrabee  v. 
Lambert,  32  Me.  97.  Contm,  Darby  v.  Hays,  17  Serg.  &  R.  400;  Hender- 
son V.  Herrod,  10  Smed.  &  M.  631;  English  v.  Carney,  25  Mich.  178; 
Grattan  v.  Wiggins,  23  Cal.  30.  But  it  is  always  competent  for  the 
parties  to  control  the  priority  of  the  debts  secured  oy  the  same  mort- 
gage, and  may  altogether  exclude  one  or  more  from  the  enjoyment  of  the 
security.  Bryant  v.  Damon,  6  Gray,  164;  Langdon  v.  Keith,  9  Vt.  299; 
Mechanics  Bank  v.  Bank  of  Niagara,  9  Wend.  410;  Eastman  v.  Foster,  8 
Met.  19;  Stevenson  v.  Black,  1  N.J.  Eq.  338;  Wright  v.  Packer,  2  Aik. 
212;  Colhim  V.  Erwin,  4  Ala.  452;  Walker  v.  Dement,  42  111.  272;  Bank 
of  England  v.  Tarlctou,  23  Miss.  178;  Cooper  u.  Ulman,  Walk.  (Mich.) 
251;  Grattan  v.  Wiggins,  23  Cal.  30. 

2  Eastman  v.  Foster,  8  Met.  19 ;  Noyes  v.  White,  9  Minn.  640.  Contra 
Page  V.  Pierce,,26  N,  H.  317;  Stevenson  v.  Black,  1  N.  J.Eq.  338;  Betz 
V.  Heebner,  1  Pcnn.  280;  Henderson  v.  Herrod,  18  Miss.  631. 

3  Trustees  Union  College  v.  Wheeler,  61  N.  Y.  88;  Ingraham  v.  Dis- 
borough,  47  N.  Y.  421;  Davis  v.  Betchstein,  69  N.  Y.  440  (25  Am.  Rep. 
218);  Pendleton  u.  Fay,  2  Paige  Ch.  202;  Ellis  v.  Messervie,  11  Paige 
Ch.  467;  s.  c.  2  Deuio,  640;  Mott  v.  Clark,  9  Pa.  St.  399;  Twichell  v. 
McMurtrie,  77  Pa.  St.  383;  Losey  v.  Sampson,  10  N.  J.  Eq.  247;  Mus- 
grove  V.  Kennell,  23  N.  J.  Eq.  75;  Reeves  v.  Scully,  Walk.  (Mich.)  248; 
Nicholls  V.  Lee,  10  Mich.  626;  Croft  v.  Bunster,  9  Wis.  503;  Goulding  v. 
Bunster,  9  Wis.  503;  Hortsman  v.  Gerker,  49  Pa.  St.  282. 

532 


CH.  XIV.]       THE    RIGHTS    OF    BONA    FIDE    HOLDERS.  §    305 

ness  be  a  negotiable  note,  the  mortgage  being  treated  as 
incident  to  the  debt,  receives  from  the  note  its  negotiable 
character,  and  passes  to  the  assignee  free  from  the  equities 
existing  between  the  mortgagee  and  the  mortgagor,  unless 
by  express  terms  the  mortgage  is  assigned  subject  to  the 
equities,  or  the  assignee  has  notice  of  them.  To  be  free 
from  the  equities,  the  assignment  must  be  made  before  the 
debt  falls  due.^  This  rule,  however,  is  not  uniformly 
followed.  In  a  number  of  States,  the  negotiable  character 
of  the  note  is  held  not  to  be  imparted  to  the  mortgage,  which 
secures  its  payment.  And,  although,  so  far  as  the  per- 
sonal liability  of  the  mortgager  on  the  note  is  concerned, 
the  assignee  takes  it  free  from  the  equities,  the  mortgage 
in  his  hands  is  subject  to  them.^  But  the  assignee  takes 
the  mortgage  subject  to  all  prior  liens  and  mortgages  which 
have  been  duly  recorded,  and  of   which,  consequently,  he 


1  Carpenter  v,  Longan,  16  Wall.  271;  Kennicott  v.  Supervisors,  10 
Wall.  452;  Sprague  v.  Graham,  29  Me.  160;  Pierce  v.  Faunce,47  Me.  507; 
Gould  V.  Marsh,  1  Hun,  566;  Jackson  v.  Blodgett,  5  Cow.  203;  Green  v. 
Hart,  1  Johns.  580 ;  Taylor  v.  Page,  6  Allen,  86 ;  Young  v.  Miller,  6  Gray, 
152;  Breen  v.  Seward,  11  Gray,  118;  Button  v.  Ives,  2  Mich.  515; 
Bloomer  v.  Henderson,  B  Mich.  395;  Cornell  v.  Hichens,  11  Wis.  353; 
Webb  V.  Hazelton,  4  Neb.  308  (19  Am.  Rep.  G38);  Burkhaus  i\  Hutche- 
son,  25  Kan.  631;  Savryer  v.  Prickett,  19  Wall.  166;  Kelley  v.  Whitney, 
45  Wis.  110;  Murray  v.  Jones,  50  Ga.  109;  Martineau  v.  McCollura,  4 
Chand.  153;  Kelmer  v.  Krolick,  36  Mich.  373;  Judge  v.  Vogel,  38  Mich. 
568;  Cicotte  v.  Gaznier,  2  Mich.  381;  Duncan  v.  Louisville,  13  Bush,  385- 
Preston  v.  Morris,  42  Iowa,  549;  Farmers'  Nat.  Bank  v.  Fletcher,  44 
Iowa,  256;  Updegraft  v.  Edwards,  45  Iowa,  515;  Clasey  u,  Sigg,  51 
Iowa,  373.  This  same  rule  has  been  applied  to  deeds  of  trust,  given  to 
secure  the  payment  of  a  negotiable  note.  New  Orleans,  etc.,  v.  Mont- 
gomery, 95  U.  S.  16;  Potts  V.  Blackwell,  4  Jones  (N.  CO  Eq.  58. 

2  Olds  V.  Cummings,  31  111.  18S;  Sumner  i;.  Waugh,  56  111.  531;  White 
V.  Sutherland,  64  111.  181;  Bailey  v.  Smith,  14  Ohio  St.  396;  Bouligny  v. 
Fortier^  17  La.  Ann.  121;  Johnson  v.  Carpenter,  7  Minn.  176;  Walker  v. 
Dement,  42  111.  278;  Petillon  v.  Noble,  73  111.  507;  Bryant  v.  Vis,  83  111. 
14;  Melendy  v.  Keen,  89  111.  395;  U,  S.  Mortgage  Co.  v.  Gross,  93  111. 
483  C.  D.  &  V.  R.  R.  Co.  v.  Loeweuthal,  93  111.  451;  Morris  v.  White,  28 
La.  855;  Johnson  v.  Vlckers,  31  La.  Ann.  943. 

533 


§    305  THE    KIQIITS    OF    BONA    FIDH    HilLDEIIS.        [CII.   XIV. 

has  constructive  notice.^  And  it  needs  only  to  l)e  added, 
that  in  order  that  the  assignee  may  chum  to  take  the  mort- 
gage free  from  equities,  he  must  be  in  every  respect  the 
bona  fide  holder  of  the  note.^ 

1  Linville  w.  Savage,  58   Mo.  248;  Lo^an  v.  Smith,  62  Mo.  4or);  Simo 
V.  Ilaramoutl,  33  Iowa,  3G8;  Englisb  v.  Wafles,  13  Iowa,  57. 

*  Cruin  V.  Corby,  11  Kau.  4G4;  Dobbins  v.  Parker,  46  Iowa,  358; 
Strong  V.  Jaclsson,  123  Mass.  60;  Browulee  v.  Arnold,  60  Mo.  79.  But 
in  Crosby  v.  Roiib,  16  Wis.  625,  where  a  note  and  mortgage  were  at- 
tached by  the  mortgagee  to  his  negotiable  bond,  in  which  it  was  statt'd 
that  the  note  and  mortgage  were  transferred  as  security  for  the  bond, 
and  that  they  should  be  transferable  with  the  bond,  and  not  otherwise, 
it  was  held  that  this  was  a  sufficient  indorsement  witliiu  the  law  mer- 
chant to  pass  the  legal  title  to  the  note,  and  to  make  the  obligee  the 
bona  fide  holder  of  the  same.  Paine,  J.,  said:  "  The  intent  to  pass  the 
title  and  make  the  note  transferable  by  delivery  afterwards  as  a  note 
payable  to  order  and  duly  indorsed  by  the  payee,  is  beyond  question. 
And  this  contract,  like  all  others,  must  ttike  effect,  according  to  the  in- 
tent of  the  parties,  if  it  is  sufficient  in  law  to  express  that  intent.  And 
the  fact  that  the  parties  contracted  for  an  absolute  liability  by  the  vendor 
evidenced  by  a  distinct  negotiable  instrument  on  the  back  of  the  one 
transferred,  cannot,  upon  any  rational  principle,  be  held  to  distingui!?li 
the  case,  so  far  as  the  mere  question  of  a  transfer  is  concerned,  from  a 
case  where  they  contract  for  no  liability  or  for  the  conditional  liability 
of  a  guarantor.  I  conclude,  then,  that  if  the  bond  had  been  written  on 
the  back  of  the  note,  it  would  have  been  fully  sufficient  to  pass  the  legai 
title  within  the  law  merchant.  See  also  Bang  v.  Flint,  26  Wis.  646. 
534 


CHAPTER  XV, 

PRESENTMENT  FOR  PAYMENT. 

Skction  310.  The  necessity  for  presentment  —  Effect  on  accrument  of 
interest. 

311.  By  whom  presentment  must  be  made. 

312.  When  possession  evidence  of  holder's  right  to  present  for 

payment. 

313.  To  whom  presentment  should  be  made. 

314.  The  place  of  presentment. 

315.  The  time  of  presentment— Days  of  grace. 

316.  Computation  of  time  —  Effect  of  legal  holidays. 

317.  At  what  hour  of  the  day  presentment  should  be  made. 

318.  Mode  of  presentment. 

§  310.  The  necessity  for  presentment — Effect  on 
accrument  of  interest.  —  It  is  necessary  to  make  pre- 
sentment for  payment  at  maturity  of  commercial  paper, 
in  order  to  preserve  the  right  of  action  against  all 
parties  secondarily  liable  on  the  paper.  Such  parties 
guarantee  payment  provided  .the  presentment  is  made 
when  the  paper  falls  due.  For  this  reason,  the  drawer 
of  a  bill  of  exchange  cannot  be  sued  unless  the  bill 
has  been  presented  to  the  drawee  or  acceptor  for  accept- 
ance and  payment.^  So,  also,  will  the  indorsersof  any  com- 
mercial paper,  which  is  negotiable,  be  discharged  from 
liability  to  the  holder,  if  the  paper  has  not  been  presented 
to  the  maker  or  acceptor  for  payment.^     Even  where  the 

1  Munroe  v.  Easton,  2  Johns.  Cas.  75;  Burritt  v.  Tidmarsh,  5  Bradw. 
341;  Treadway  v.  Nicks,  3  McCord,  195;  Dayton  v.  Trull,  23  Wend.  345, 
The  bolder  will  not  only  lose  his  remedy  against  the  drawer  on  the  bill 
itself,  but  likewise  on  the  original  consideration.  Adams  v.  Darby,  28 
Mo.  162. 

2  Magruder  v.  Union  Bank,  3  Pet.  87;  Cayuga  Co.  Bank  v.  Warden,  1 

535 


§    310  PRESBNTMEXT    FOR    TAYMEXT.  [cil.  XV. 

bill  or  note  has  been  indorsed  after  maturity,  there  must 
be  a  demand  for  payment,  before  the  indorser  can  be  held 
liable.^  Whether  oae  who  indorses  a  note  or  bill  before 
delivery  for  the  purpose  of  lending  his  credit  to  the  paper, 
will  be  discharged  by  a  failure  to  make  a  presentment  for 
acceptance,  will  depend  upon  the  view  taken  of  the  charac- 
ter of  such  an  indorsement  in  the  State  in  which  this  ques- 
tion arises. 2  If  the  party  indorsing  before  delivery  is  held 
to  be  a  first  or  second  indorser,  he  is  discharged  if  present- 
ment for  payment  is  not  duly  made  at  maturity.^  But 
where  he  is  held  to  bo  an  original  joint  maker,  or  surety, 
or  guarantor,  he  is  held  not  to  be  entitled  to  demand  of 
payment  and  notice.^     Guarantors,  and  sureties  in  general,. 


N.  Y.  413;  Budclell  v.  Walker,  7  Ark.  457;  Winston  v.  Richardson,  27 
Ark.  347;  Van  Wickle  u.  Dowuiug,  19  La.  Ann.  83;  Union  Ins.  Co.  e. 
Rodd,  26  La.  Ann.  715;  Otto  v.  Beldeu.  28  La.  Ann.  302;  Duncan  v.  Mc- 
Cullough,  4  Serg.  &  R.  480;  Brandt  v.  Nuckle,  28  Md.  436,  Bank  of  Alex- 
andria V.  Young,  2  Cranch  C.  C.  52. 

1  Berry  v.  Robinson,  9  Johns.  121;  Swartz  v.  Redfield,  13  Kan.  550; 
Shelby  V.  Judd,  24  Kan.  161;  Branch  Bank  v.  Gaffney,  9  Ala.  153; 
Dwight  V.  Emerson,  2  N.  H.  159;  Stockman  v.  Riley,  2  McCord,  398; 
McKinney  v.  Crawford,  8  Serg.  &  R.  351;  Patterson  v.  Todd,  18  Pa.  St. 
42G ;  Dixon  v.  Clayville,  44  Md.  573 ;  Graul  v.  Strutzel,  53  Iowa,  712 ; 
Bemis  v.  McKenzie,  13  Fla.  553;  Strong  v.  Duke,  5  Alb.  L.  J.  250;  Becbc 
V.  Brooks,  12  Cal.  308;  McCall  v.  Witkouski,  16  La.  Ann.  179.  But  no 
fm'ther  demand  is  necessai*y,  if  the  paper  is  indorsed  after  maturity  with 
protest  attached.  Williams  v.  Mathews,  3  Cow.  252;  St.  John  v.  Rob- 
erts, 31  N.  Y.  441.  Demand  is  also  necessary,  where  one  transfers  a  note 
by  delivery  after  maturity.     Hunt  y.  Wadleigh,  26  Me.  271. 

2  For  a  full  di-scussion  of  the  character  of  such  an  indorsement,  and 
the  effect  of  the  different  views  entertained  on  the  subject  see  ante,  §§ 
270-272. 

3  Hooks  V.  Anderson,  58  Ala.  238;  Kamm  v.  Holland,  2  Oreg.  59;  Hall 
V.  Newcorab,  7  Hill,  416;  Taylor  v.  McCuuc,  11  Pa.  St.  400;  Field  v.  N. 
O.  Newspaper  Co.,  21  La.  Ann.  24;  Riggs  o.  Waldo,  2  Cal.  485;  Pierce  v. 
Kennedy,  5  Cal.  138;  Jones  a.  Goodwin,  3!)  Cal.  493;  Cloustou  o.  Bar- 
bieie,  4  Sneed,  S.'JG;  Bronson  v.  Alexander,  48  Ind.  244;  Cook  r.  Googins, 
126  Mas.s.  41u;  Puh.  Stats.  Mass.  (1882),  ch.  77,  §  15. 

*  Massey  v.  Turner^  2  Houst.  79;  Manufacturer's  Bank  v.   Follett,  11 
11.  I.   92;  Cromwell    v.  Hewitt,   40N.  Y.  491;  Kiliiau  y.  Ashley,  24  Ark 
53(3 


CH.  XV.]  PRESENTMENT    FOR    PAYMENT.  §    310 

are  not  discharged  for  failure  of  the  holder  to  make  pre- 
sentment for  payment.  Their  liability  is  an  absolute  and 
unconditional  guaranty.^ 

It  is  never  necessary  to  make  presentment  for  payment 
at  maturity,  in  order  to  hold  liable  the  maker  of  a  note,  or 
the  acceptor  of  a  bill.^  The  only  exception  to  the  rule 
seems  to  be  that  there  can  be  no  action  against  the  acceptor, 
where  the  bill  is  payable  at  or  after  sight,  until  demand  has 
been  made.^  Although  it  has  been  claimed  by  some  of  the 
authorities,  that  if  a  bill  or  note  is  payable  "  on  demand," 
or  "on  demand  after"  a  stated  time,  the  acceptor  or  maker 
cannot  be  held  liable  on  the  paper  until  demand  has  been 


oil;  Clark  v.  Merriam,  25  Conn.  576;  Peckhara  v.  Gilmau,  7  Minn.  446; 
McGee  v.  Connor,  1  Utah,  92;  Weston  Bklg.  Ass.  v.  Wolff,  45  Mo.  104; 
Richards  v.  Warring,  1  Keyes,  576.  But  it  has  been  held  that  in  such  a 
case,  he  may  defend  by  showing  tliat  he  has  suffered  damage  in  fact  on 
account  of  the  failure  of  tlie  holder  to  present  for  payment  at  maturity. 
Camp  V.  Simmons,  62  Ga.  73;  Sibley  v.  Van  Horn,  13  Iowa,  209;  Picket 
V.  Hawes,  14  Iowa,  460;  Rodabaugh  v.  Pitkin,  46  Iowa,  544.  In  Nevada 
he  is  entitled,  as  a  guarantor,  to  reasonable  notice  of  demand  and  dis- 
honor.   Van  Doren  v.  Tjader,  1  Nev.  380. 

1  Cooper  V.  Page,  25  Me,  73;  Baker  v.  Kelley,  41  Miss.  697;  Walton  v. 
Mascall,  13  M.  &  W.  452:  s.  c.  2  D.  &  L.  420;  Clay  v.  Edgerton,  19  Ohio 
St.  549;  Warrington  v.  Furbor,  8  East,  245;  Holbrow  v.  Wilkins,  1  B.  & 
C.  10;  Williams  v.  Granger,  4  Day,  .444;  Breed  v.  Hillhousc,  7  Conn.  523; 
Allen  V.  Rightmere,  20  Johns.  365;  Wincheli  u.  Daty,  15  Hun,  1;  Tatum 
V.  Bonner,  27  Miss.  760;  Bond  v.  Storrs,  13  Conn.  412;  Benton  v.  Gib- 
son, 1  Hill  (S.  C),  56.  But  it  has  been  held  that  the  guarantor  :s  dis- 
charged, if  he  can  show  damage  by  reason  of  the  failure  lo  nresent  for 
payment.     Weller  v.  Hawes,  19  Iowa,  443. 

-  Rhodes  v.  Gent,  5  B.  &  Aid.  244;  Jackson  v.  Packer,  13  Conn.  342; 
Ai-mstrong  v.  Caldwell,  2  111.  546;  Yeaton  u.  Berney,  62  111.  61;  State 
Bank  v.  Fox,  3  Blatchf.  431;  Merchants',  etc.j  Bank  «,  Evans,  9  W.  V- 
373;  Amd.  Code,  W.  Va.  (1884),  ch.  9,  §  1;  Wolcott  v.  VanSautvoord,  i . 
Johns.  248;  Blair  u.  Bank  of  Tennessee,  11  Humph.  83;  Wegci'sloffe  o. 
Keene,  1  Stra.  222;  Rice  v.  Hogan,  8  Dana,  134. 

»  Dixon  V.  Muttall,  1  C.  M.  &  R,  307;  s.  c.  6  C.  &  P,  320.  Tlie 
acceptor  supra  protest  can  require  the  note  to  be  first  presented  to  the 
drawee.  Hoare  v.  Cazenove,  16  East,  39i ;  Schofield  ».  Taylor,  3  Wend. 
488. 

537 


§    310  PKESENTMEXT    FOH   PAYMENT.  [CH.  XV, 

made;*  the  better  opinion  is  that,  siuce  the  acceptor 
or  maker  can  at  any  time  extinguish  his  liability  by  pay- 
ment, his  liability  does  not  depend  upon  any  formal  de- 
mand being  made  upon  him.  The  suit  itself  is  a  sufficient 
demand/^  It  is  not  even  necessary,  as  against  the  maker 
or  acceptor,  to  make  a  formal  presentment,  where  the  place 
of  payment  is  specified  in  the  instrument.^ 

J  Wallace  v.  McConnell,  13  Pet.  136,  Thompson,  J.,  saying:  •*  Wbere 
the  promise  is  to  pay  on  demand  at  a  particular  place,  there  is  no  cause 
of  action  until  the  demand  is  made,  and  the  maker  of  the  note  cannot 
discharge  himself  by  an  offer  of  payment,  the  note  not  being  due  until 
demanded."  See  to  the  same  effect,  Armistead  v.  Armistcad,  10  Leigh, 
521;  Sanderson  v.  Bowes,  14  East,  500;  Caldwell  v.  Cassidy,  8  Cow.  271 
(overruled  by  Hastum  v.  Bishop,  3  Wend.  1) . 

2  Jackson  v.  Packer,  13  Conn.  342;  Hill  v.  Henry,  17  Ohio,  1;  Rum- 
ball  V.  Ball,  10  Mod.  38;  McKinney  v.  Whipple,  61  Me.  98;  Gammon  v. 
Everett,  25  Me.  66;  Norton  v.  EUam,  2  M.  &  W.  461;  Middleton  v.  Bos- 
ton Locomotive  Works,  26  Pa.  St.  257;  New  Hope  D.  B.  v.  Perry,  11  HI. 
467;  Cook  V.  Martin,  5  Smed.  &  M.  379;  Woodward  v.  Drennan,  3  Brev. 
189;  Collins  V.  Trotter,  81  Mo.  275;  McFarland  v.  Cutter,  1  Mont.  383; 
Ziel  V.  Dukes,  12  Cal.  479;  Bell  v.  Salkett,  33  Cal.  407.  It  is  also  not 
necessary,  where  the  note  is  payable  a  certain  time  "after  demand." 
ChilKcothe  Branch  Bank  v.  Fox,  3  Blatchf .  431 ;  Dodd  v.  Gill,  3  F.  &  F. 
261;  GillsontJ.  Hill,  4  Gray,  316;  Lynch  v.  Goldsmith,  64  Ga.  42.  But 
see  Chase  v.  Evoy,  49  Cal.  467. 

3  Bank  of  the  United  States  v.  Smith,  11  Wheat.  173;  Dawley  o. 
Wheeler,  72  Vt.  574 ;  Bank  of  Kentucky  v.  Hickey,  4  Litt.  225 ;  Foden  v. 
Sharp,  4  Johns.  183;  Wolcott  v.  Van  Sanivoord,  17  Johns.  248;  Green 
u.  Goings,  7  Barb.  652;  Picquet  u.  Curtis,  1  Sumn.  478;  Blair  u.  Bank 
of  Tennessee,  11  Humph.  83;  Wallace  v.  McConnell,  13  Pet.  136;  Cox  v. 
National  Bank,  100  U.  S.  714;  Yeaton  u.  Berney,  62  HI.  61;  Schoharie 
Co.  Nat.  Bank  v.  Bevard,  51  Iowa,  258;  Ruggles  v.  Patten,  8  Mass.  480; 
Merchants'  Bank  v.  Evans,  9  W.  Va.  373;  Hilly.  Allen,  37  Ind.  541; 
McCullough  0.  Cook,  34  ind.  334;  Caldwell  v.  Cassidy,  8  Cow.  271; 
McNairy  u.  Bell,  1  Yerg.  502;  Montgomery  v.  Tutt,  11  Cal.  307;  Thiel  v. 
Conrad,  21  La.  Ann.  214  ;  Renshawv.  Richards,  30  La.  Ann.  398;  Howard 
U.Bowman,  17  Wis.  459;  Reeve  u.  Pack,  6  Mich.  240;  Hills  «.  Place,  48 
N.  Y.  520.  In  England,  it  has  oeen  held  that  where  the  place  of  pay- 
ment is  named,  the  maker  or  acceptor  is  not  bound,  unless  presentment 
has  been  made  at  the  place  of  payment.  Rowe  v.  Young,  2  Brod.  &  Bing. 
165;  s.  c.  Bligh,  391;  Emblem  v.  Dartnell,  12  M.  &  W.  830;  Gibb  v. 
Mather,  8  Bing.  214;  Sanderson  v.  Bowes,  14  East,  500.     But  the  place 

538 


CH.  XV.]  PRESENTMENT   FOR   PAYMENT.  §    olO 

But  as  a  general  rule,  it  is  necessary  to  make  presentment 
for  payment  at  the  specified  place  of  payment,  in  order  to 
hold  the  drawer  and  mdorsers  liable. ^  Where  the  place 
of  payment  is  specified,  and  the  maker  or  acceptor  can 
prove  himself  to  have  been  at  the  place,  on  the  day  of 
payment,  ready  to  pay  the  amount  due;  the  failure  of  the 
holder  to  present  for  payment  will  prevent  any  subsequent 
recovery  of  damages  and  costs. '^  It  must,  however,  not  be 
understood  that  the  maker  or  acceptor  is  relieved  from  the 
liability  on  the  paper,  if  the  paper  is  payable  at  a  particular 
bank,  and  the  money  which  is  deposited  at  that  ban"k  to 
meet  the  maturing  debt,  is  lost  by  the  insolvency  or  mis- 
appropriation of  the  bank,  because  the  holder  failed  to 
present  the  paper  for  payment  at  maturity.^ 


of  payment  must  be  named  in  the  body  of  the  instrument  to  have  that 
effect.  Sanderson  v.  Judge,  2  H.  Bl.  509.  An  act  of  parliament,  1  &  2 
Geo.  IV.,  has  provided  that  presentment  at  the  place  of  payment  is  not 
necessary  to  bind  the  acceptor  of  a  bill,  unless  the  provision  assumes 
the  form  of  a  qualified  acceptance,  to  pay  at  that  place  and  nowhere  else. 
As  to  qualified  acceptances,  see  ante,  §  227. 

1  Bank  of  the  United  States  w.  Smith,  11  Wheat.  171;  Cox  v.  National 
Bank,  100  U.  S.  712;  Shaw  v.  Reed,  12  Pick.  132;  Farner  v.  Williams,  37 
Barb.  9;  Watkins  v.  Crouch,  5  Leigh,  522;  Brown  v.  Hull,  23  Gratt.  27; 
Nichols  V.  Poole,  2  Jones  (N.  C.)  33;  Lawrence  v.  Dobyns,  30  Mo.  196. 

2  Bacon  y.  Dyer,  17  Me.  19;  Arraistead  y.  Armistead,  10  Leigh,  525; 
Watkins  v.  Cronen,  5  Leigh,  322;  Mulherrinv.  Hannum,  2  Yerg.  81 ;  Bank 
of  Charleston  v.  Zorn,  14  S.  C.  444;  Hills  v.  Place,  48  N.  Y.  520;  Lazier 
V.  Horar,  55  Iowa,  75. 

3  Ward  V.Smith,  7  Wall.  447;  Walton  v.  Henderson,  Smith  (N.  H.) 
168;  Williamsport  Gas  Co.  v.  Pinkerton,  95  Pa.  St.  62;  Carley  v.  Vance, 
17  Mass.  389;  Wood  v.  Mechanics',  etc.,  41  111.  267;  Haxton  v.  Bishop,  3 
Wend.  13;  Adams  v.  Hackensack,  etc.,  Co.,  1.'^  Vroom,  C38,  Depue,  J., 
saying:  "Unless  the  banker  has  been  made  the  agent  of  the  holder  by 
the  indorsement  of  the  paper  or  the  deposit  of  it.  for  collection,  any 
money  which  the  banker  receives  to  apply  in  payment  of  it  will  be  deemed 
to  have  been  taken  by  him  as  the  agent  of  the  payer.  *  *  *  The  only 
effect  of  the  payer  having  money  at  the  bank  where  the  paper  is  payable 
is  that  it  will  enable  him  to  plead  a  tender  in  exoneration  of  interest  and 
costs  of  suit,  provided  he  makes  his  tender  good  by  payment  of  the  prin- 

539 


§310  PRESENTMENT   FOR   PAYMENT.  [CH.  XV. 

In  respect  to  the  liability  for  accruing  interest,  the  dis- 
tinction is  made  between  tiiose  cases  in  which  interest  is  ex- 
pressly reserved  and  runs  from  the  date  of  the  instrument, 
and  those  cases  where  there  is  no  express  stipulation  for  in- 
terest, and  the  interest  only  accrues  from  maturity.  In 
the  former  cases,  no  failure  to  present  for  payment  will 
stop  the  accrument  of  interest,  and  nothing  but  a  tender  of 
payment  by  the  maker  or  acceptor  will  do  so.*  And  so, 
also,  where  there  is  no  reservation  of  interest,  and  no  de- 
mand made,  it  has  been  held  that  interest  will  run  from  ma- 
turity, if  the  instrument  is  payable  at  a  time  certain. ^  But 
if  the  paper  be  payable  on  demand,  and  there  is  no  interest 
reserved,  it  wiU  bear  interest  only  from  demand.  In  such 
cases,  the  interest  is  charged  as  damages  for  the  failure  to 

pay-' 

There  can  be  no  recovery  of  interest,  if  the  paper  is  pay- 
able at  a  specified  place,  and  the  holder  did  not  present  it 
thej-e  for  pa^Tiient.* 

cipal  into  court."    But  see  Bank  of  Charleston  v.  Zorn,  14  S.  C.  444; 
Lazier  v.  Horan^  55  Iowa,  75. 

1  Dent  V.  Duun,  3  Camp.  296;  Suffolk  Bank  v.  Worcester  Bank,  5  Pick. 
106;  •Laughlin.'jj.  Wrisjjht,  63  Cal.  113;  Tliielr.  Conrad,  21  La.  Arm.  214. 

?  Lowndes  v.  Collins,  17  Ves.  27;  Sweet  v.  Hooper,  62  Me.  54;  Jacobs 
V.  Adams,  1  Dall.  521 ;  Laing  v.  Stone,  2  Man.  &Ry.  561 ;  Joyner  v.  Tur- 
ner, 19  Ark.  690;  Lithgow  v.  Lyon,  1  Coop.  Ch.  22.  But  see  Bradford 
V.  Cooper,  1  La.  Ann.  325;  Bann  v.  Dalzell,  M.  &  M.  228;  s.  c.  3  C.  &  P. 
376. 

3  Barrough  v.  White,  4  B.  &  C.  327;  s.  c.  6  Dowl.  &  Ky.  379;  s.  c.  2  C. 
&  P.  8;  Parquhar  v.  Morris,  7  T.  R.  124;  Hard  v.  Palmer,  21  U.  C.  Q.  B. 
49;  Upton  v.  Lord  Fersers,  5  Ves.  801;  Nelson  v.  Cartmel,  6  Dana,  8; 
Breyfogle  v.  Beckley,  16  Serg.  &  R.  264;  Wallace  v.  Wallace,  8  Bradw. 
69;  Maxey  v.  Knight,  18  Ala.  300;  Hunter  v.  Wood,  54  Ala.  71;  Cannon 
V.  Beggs,  1  McCord,  370;  Dillon  v.  Dudley,  1  A.  K.  Marsh.  66;  Schmidt 
V.  Limehouse,  2  Bailey,  276;  Hunt  v.  Nevers,  15  Pick.  500;  Bartlett  z). 
Marshall,  2  Bibb.,  467;  Gore  v.  Buck,  1  Mon.  209.  But  see  Proctor  u. 
Whitcomb,  137  Mass.  30.0;  Edgmon  v.  Ashelby,  76  HI.  161;  Puilen  ^. 
Chase,  4  Ark.  210;  Walker  v.  Wills,  5  Ark.  106. 

^  Phillips  V.  Franklin,  Gow.  N.  P.  190;  Murray  v.  East  India  Co.,  5B. 
&  Aid.  204. 

540 


CH.  XV.]  PRESENTMENT    FOR    PAYMENT.  §    311 

In  a  few  of  the  States  the  law  merchant  has  been  modi- 
fied by  statute,  in  respect  to  the  necessity  of  presentment 
for  acceptance.  In  Illinois  and  North  Carolina  present- 
ment is  not  necessary  to  hold  the  indorser  of  a  note.^  In 
Minnesota,  the  indorser  will  be  liable  on  a  demand  note,  if 
presentment  is  made  within  sixty  days.^  In  Texas,  pre- 
sentment to  acceptor  or  maker  for  payment,  is  not  neces- 
sary to  hold  the  drawer  or  indorser,  if  suit  is  brought 
against  the  drawer  or  the  indorser  at  the  next  term  of  the 
court  after  the  maturity  of  the  paper. ^  In  Georgia,  pre- 
sentment for  payment  is  not  necessary  as  to  notes  held  by 
the  Central  Bank  of  Georgia,  this  privilege  being  given  to 
this  bank  by  its  charter,  and  the  law  merchant  applies  with- 
out change  to  all  other  commercial  paper.* 

§  311.  By  whom  presentment    must  be  made. — Any 

bona  fide  holder,  and  any  one  having  lawful  possession  for 
the  purpose  of  collection,  may  present  the  paper  for  pay- 
ment at  maturity,  and  receive  payment.  And  payment  to 
such  a  person  will  extinguish  the  liability  of  the  parties  to 
the  paper. ^  But  for  the  purpose  of  making  protest  for 
non-payment,  where  protest  is  necessary  to  preserve  the 
liability  of  parties  secondarily  liable  on  the  paper,  the 
presentment  for  payment  is  required  to  be  made  by  the 

1  Harding  v.  Dillery,  60  111.  528;  N.  C.  Code  (1883),  §  50. 

2  G.  S.  Minn.  (1878),  ch.  23,  §  12. 

3  E.  S.  Tex.  (1879),  arts. 264,  073.  See  Sydnor^.  Gascoigne,  11  Tex. 
449. 

*  Central  Bank  v.  Whitfield,  1  Ga.  593;  Merchants'  Bank  v.  Central 
Bank,  1  Ga.  418 ;  Lynch  v.  Goldsmith,  64  Ga.  42 ;  Williams  v.  Lewis,  69  Ga. 
825;  Beckwith  v.  Carleton,  14  Ga.  691;  Butler  v.  Marine  &  Fire  Ins.  Co., 
18  Ga.  517.  See  Hoadly  v.  Bliss,  9  Ga.  303.  And  the  law  merchant  also 
applies  to  foreign  bills,  although  in  the  hands  of  the  privileged  bank. 
Davies  v.  Byrne,  10  Ga.  329.  But  see  Beckwith  v.  Carleton,  supra,  as  to 
foreign  notes. 

5  Lefty  V.  Mills,  4  T.  R-.  170;  Bachelor  v.  Priest,  12  Pick.  399;  Sussex 
Bank  v.  Baldwin,  2  Harrison,  487 ;  Agnew  v.  Bank  of  Gettysburg,  2  Harr. 
&  G.  478. 

541 


§    311  PRESENTMENT    FOR    TAYMENT.  [CH.   XV. 

notary  public,  or  at  least  by  his  clerk  or  deputy.^  The 
presentment  need  not  be  made  by  the  indorsee,  or  other 
person  who  is  entitled  to  receive  payment.  It  may  be  made 
by  his  duly  authorized  agent,  and  his  authority  need  not  be 
in  writing,  although  possibly  the  maimer  or  acceptor  may 
require  a  written  authority,  or  an  indorsement  to  the  agent, 
before  being  compelled  to  make  payment. ^ 

If  the  holder  is  bankrupt,  and  his  estate  has  passed  into 
the  hands  of  an  assignee,  the  assignee  is  the  proper  party 
to  make  presentment.^  If  the  holder  be  dead,  when  the 
paper  falls  due,  his  personal  representatives  should  make 
presentment.*  And  if  no  personal  representatives  have  been 
appointed  when  the  paper  falls  due,  presentment  should  be 
made  within  a  reasonable  time  after  their  appointment.^ 
If  the  holder  be  a  woman,  and  she  should  marry  afterward, 
her  husband  would  be  the  proper  person  to  present  the 
paper  for  payment.  So,  likewise,  should  the  presentment 
be  made  by  the  surviving  partners  of  a  firm,  after  the  death 
of  one,  where  the  firm  was  the  payee  or  indorsee.^  If  the 
paper  is  in  the  possession  of  a  pledgee,  he  should  make  the 
presentment  for  payment ;  but  if  it  is  in  possession  of  the 
pledgor,  the  pledgor  should  present  it.^ 

1  See  post,  Chapter  on  Protest. 

2  Hartford  Bank  v.  Barry,  17  Mass.  94;  Freeman  v.  Boynton,  7  Mass. 
483;  Shed  v.  Brett,  1  Pick.  40;  Seaver  v.  Lincoln,  21  Pick.  267;  Hartford 
Bank  v.  Stedman,  2  Conn.  489;  Bank  of  Utica  v.  Smith,  18  Johns.  230; 
"Williams  v.  Matthews,  18  Cow.  252;  Sussex  Bank  v.  Baldwin,  2  Harr. 
487;  Coore  v.  Callaway,  1  Esp.  115;  Cole  v.  Jessup,  10  N.  Y.  9G;  Aguew 
V.  Bank  of  Gettysburg,  2  Harr.  &  G.  *78;  Baer  v.  Leypert,  12  Hun,  615; 
Smith  V.  Ralston,  Morris,  87. 

3  1  Parsons,  N.  &  B.  300;  1  Daniel's  Negot.  Inst.,  §  578;  Hill  r.Reed,  16 
Barb.  280. 

*  1- Parsons'  N.  &  B.  360;  Storys  Prom.  Notes,  §249;  1  Daniel's  Negot. 
Inst.  521. 

6  White  V.  Stoddard,  11  Gray,  528. 

^  1  Daniel's  Negot.  Inst.,  §  578;  Story  on  Bills,  §  3(i0;  Story  on  Prom. 
Notes,  §  250. 

'  Jennisonu.Parker,7  Mich.  355;  Cowpertliwaiteu.  Sheffield,  iSaudf. 447. 
542 


CH.  XV. 1  PRESENTMENT    FOR    PAYMENT.  §    312 

§  312.  When  possession  evidence  of  holder's  right  to 
present  for  payment.  —  If  the  paper  is  payable  to  bearer, 
or  has  been  indorsed  in  blank,  the  possession  is  held  to  be 
prima  facie  proof  of  the  right  of  the  holder  to  present  the 
paper  for  payment.^  But  if  the  paper  is  payable  to  order, 
and  is  unindorsed,  or  indorsed  to  order,  the  possession  is 
not  prima  facie  proof  of  ownership,  and  further  proof  is 
required  to  show  the  right  to  demand  payment. ^  Nor  is 
the  possession  by  one,  claiming  to  be  an  agent  of  the  in- 
dorsee or  payee,  prima  facie  proof  of  authority  to  demand 
payment  in  the  name  of  the  bona  fide  owner.  If  the  person 
so  representing  himself  be  in  fact  the  agent  of  the  holder  of 
the  paper,  payment  to  such  an  agent  would  be  lawful  and 
would  extinguish  the  liability  of  all  parties  to  the  paper. 
But  if  his  agency  should  prove  to  be  unauthorized,  the 
holder  and  lawful  owner  would  not  be  deprived  of  his  right 
to  demand  payment.^  But  if  the  holder  can  prove  an  as- 
signment by  extraneous  facts,  the  want  of  an  indorsement 
will  not  prevent  his  making  a  presentment  for  payment.* 

Whether  an  indorser  is  presumed  from  having  possession 
of  the  paper  to  have  the  right  to  demand  payment,  is  a 
matter  of  great  dispute.     Some  of  the  authorities  hold  that 

1  Bachellor  v.  Priest,  12  Pick.  399;  Cone  v.  Brown,  15  Rich.  262;  Jack- 
son V.  Love,  82  N.  C.  405;  Agnew  v.  Bank  of  Gettysburg,  2  Harr.  &  G. 
478. 

-  1  Daniel's  Negot.  Inst.,  §  574, 

°  Doubleday  v.  Kress,  50  N,  Y.  413,  Peckham,  J., saying:  "  Mere  pos- 
session of  tiie  note  by  the  assumed  agent,  Murray,  unindorsed,  Avithout 
any  other  sustaining  facts,  is  not  sufiicieut  to  authorize  payment  to  him." 
Hannon  v  Sullivan,  3  Mo.  App.  583;  Dodge  v.  National  Exchange  Bank, 
30  Ohio  St.  1;  Wardrop  v.  Dunlop,  1  Hun,  325;  Thompson  on  Bills,  245. 
Contra,  Jackson  v.  Love,  82  N.  C.  405. 

•*  Pease  v.  Warren,  25  Mich.  9,  Cooley,  J.,  saying:  "The  indorsement 
would  have  been  necessary  to  enable  him  (the  holder)  to  sue  at  law  on 
the  notes  in  his  own  name,  but  if  he  was  the  real  owner  he  was  entitled 
to  demand  and  receive  payment  whether  they  were  indorsed  or  not,  and 
final  assignment,  duly  acknowledged  and  recorded,  was  the  best  possible 
proof  of  ownership." 

543 


§    313  PRESENTMENT   FOR   PAYMENT.  [CH.  XV. 

he  is  presumed  to  have  the  right  to  present  for  payment,  if 
the  subsequent  indorsements  have  been  cancelled:^  while 
other  authorities  maintain  that  his  possession  is  presump- 
tive evidence  of  his  right  of  ownership,  whether  the  subse- 
quent indorsements  are  cancelled  or  uncancelled. ^ 

§  313.  To  whom  presentment  should  be  made. — As  a 

general  proposition,  it  is  clear  that  the  presentment  should 
be  made  to  the  acceptor  of  a  bill  or  the  maker  of  a  promis- 
sory note,  for  they  are  the  primary  debtors.  And  if  they 
can  be  found,  the  presentment  must  be  made  to  them  per- 
sonally. But  if  they  cannot  be  found  at  their  places  of 
business  or  at  their  residences,  or,  if  a  place  of  payment  is 
specified,  at  that  place,  on  the  day  that  the  paper  matures; 
demand  should  be  made  of  any  one,  who  had-  arrived  at 
years  of  discretion,  and  who  is  seen  by  the  holder  or  his 
agent  at  any  one  of  these  places.  Thus,  upon  failing  to 
find  the  acceptor  or  the  maker,  respectively,  demand  of 
payment  can  be  made  of  the  wife,  clerk  or  other  agent  who 
would  likely  be  trusted  with  transactions  of  the  sort.  The 
acceptor  and  the  maker  should  have  made  provision  for  the 
payment  of  their  obligations.^     It  was  even  held  sufficient 

1  Bank  of  Utica  v.  Smith,  18  Johus.  230;  Dollfus  v.  Frosch,  1  Denio, 
367;  Chautauqua  Co.  Bauk  v.  Davis,  21  Weud.  584;  Bowie  v.  Duvall,  1 
Gill  &  J.  175;  Briukley  v.  Goiug,  Breese,  288;  Kyle  v.  Thompson,  2  Scam. 
432. 

2  Dugan  V.  United  States,  3  Wheat.  172;  Picquet  v.  Curtis,  1  Sum. 
478;  Lonsdale  v.  Brown,  3  Wash.  C.  C.  404;  Norris  v.  Badger,  6  Cow. 
449;  Bank  of  Kansas  City  v.  Mills,  24  Kan.  610.  See  Bank  of  U.  S.  v. 
United  States,  2  How.  711;  Joues  v.  Fort,  9  B.  &  C.  764;  Batchellor  v. 
Priest,  12  Pick.  399;  Merz  v.  Kaiser,  20  La.  Ann.  377.  But  see  Welch  v. 
Lindo,  7  Cranch  S.  C.  159;  Thompson  v.  Flower,  13  Mart.  (La.)  301. 

3  Mathews  v.  Haydon,  2  Esp.  509;  Brown  v.  McDermott,  5  Esp.  2G5; 
Stewart  v.  Eden,  2  Caines,  12;  Sanford  v.  Norton,  17  Vt.  285;  Reynolds  v. 
Chettle,  2  Camp.  596;  Crenshaw  v.  McKiernan,  Minor,  295;  Nelson  v. 
Fotteral,  7  Leigh,  180;  Stainback  v.  Bank  of  Virginia,  11  Gratt.  260; 
Merchants'  Bank  v.  Spicer,  6  Wend.  443;  Draper  v.  demons,  4  Mo.  52; 
Phillips  u.  Poiudexter,  18  Ala.  579;  Bradley  v.  Northern  Bank,  60  Ala.  259; 

544 


CH.  XV.]  PRESENTMENT    FOR    PAYMENT.  §    313 

to  have  made  presentment  to  an  inmate  of  the  acceptor's 
house  who  informed  the  holder  of  the  acceptor's  removal, 
a  card  being  left  for  the  acceptor  informing  him  of  the 
maturity  of  the  bill.^  But  merely  stating  in  the  protest 
the  fact  of  presentment  "  at  the  office  of  the  maker," 
without  adding  to  whom,  is  insufficient,  unless  it  is  also 
stated  that  no  one  answered  the  call.  The  holder  is  not 
obliged  to  hunt  up  the  maker  or  acceptor  if  he  cannot  find 
him  or  any  representative  of  his,  at  his  residence  or  place 
of  business. 2  If  the  acceptor  or  maker  be  dead,  demand 
of  payment  should  be  made  of  his  personal  representative, 
if  his  residence  or  place  of  business  can  be  ascertained  with 
reasonable  diligence.^  But  if  there  be  no  personal  repre- 
sentative, it  is  sufficient  for  the  presentment  to  have  been 
made  at  the  residence  of  the  deceased  obligor,  to  any  per- 
son of  years  of  discretion,  who  could  be   seen,  unless  the 


Branch  Bank  v.  Hodges,  17  Ala.  42;  Bank  of  England  v.  Newman,  12 
Mod.  241;  s.  c.  1  Ld.  Raym.  442;  Hunt  v.  Maybee,  7  N.  Y.  266;  Crom- 
well V.  Hynsou,  2  Camp.  496;  Whaley  v.  Houston,  12  La.  Anu.  585; 
Moodie  v.  Morrall,  1  Const.  R.  367 ;  Hawkey  v.  Berwick,  1  Younge  &  J.  376 ; 
4  Bing.  135;  Phillips  v.  Astberg,  2  Taunt.  206.  In  presenting  to  a  cor- 
poration for  payment,  care  must  be  taken  that  the  presentment  is  made 
to  the  officer  or  agent,  who  is  authorized  to  pay  the  liabilities  of  the 
corporation.  Casco  Bank  v.  Mussey,  19  Me.  20;  Spaun  v.  Baltzell,  1 
Fla.  301;  McKee  v.  Boswell,  33  Mo.  567;  Newark  India  Rubber  Co.  v. 
Bishop,  3  E.  D,  Smith,  48;  Crenshaw  v.  McKiernan,  Minor,  295. 

1  Buxton  V.  Jones,  1  Man.  &  G.  83;  s.  c.  1  Scott  N.  R.  19.  But  this 
cannot  be  considered  a  reliable  ruling.     See  post  §  314. 

2  Stivers  v.  Prentice,  3  B.  Mon.  461 ;  Nave  v.  Richardson,  36  Mo.  130. 

3  Magweder  v.  Union  Bank,  3  Pet.  87;  Gower  v.  Moore,  25  Me.  16; 
Juniata  Bank  v.  Hale,  16  Serg.  &  R.  167;  Groth  v.  Gyger,  31  Pa.  St.  271; 
Price  V.  Young,  1  Nott  &  McC.  438.  If  a  representative  has  in  fact 
been  appointed,  paper  must  be  jsresented  at  his  place  of  business  or  res- 
idence, although  he  may  be  temporarily  absent  from  the  State.  Pre- 
sentment at  the  maker's  place  of  business  is  not  sufficient  under  such 
circumstances.  Frayzer  v.  Damerou,  6  Mo.  App.  153.  The  maker's 
death  and  the  appointment  of  a  personal  representative  will  not  be  pre- 
sumed against  an  indorser,  even  though  it  is  so  stated  in  the  protest. 
These  facts  must  be  proven.     Weems  v.  Farmers'  Bank,  15  Md.  231. 

35  545 


§    313  PRESENTMENT    FOR    PAYMENT.  [CH.  XV. 

instrument  was  payable  at  a  particular  i)lace,  when  it  will 
be  sufficient  to  make  presentment  at  that  place. ^ 

If  there  are  two  or  more  obligors  to  the  instrument,  who 
sign  as  partners,  presentment  need  only  be  made  to  one  of 
the  partners.  It  is  not  necessary  to  make  presentment  to  all,^ 
even  though  the  partnership  is  already  dissolved.  The 
partner's  authority  to  bind  the  firm  by  his  acts  continues 
after  the  dissolution  in  respect  to  all  antecedent  transac- 
tions until  they  are  closed.^  If  the  partnership  had  been 
dissolved  by  the  death  of  one  of  the  partners,  demand 
should  be  made  of  the  survivor,  and  not  of  the  personal 
representative  of  the  deceased  partner.* 

As  a  general  proposition,  it  is  conceded  that,  where  there 
are  two  or  more  obligors,  who  are  not  partners,  demand 
should  be  made  of  all  the  obligors.^     It  has,  however,  been 


1  Philpot  V.  Bryant,  1  Moore  &  P.  754;  Simmon  v.  Reynaud,  10  L;;. 
Ann.  50G;  Bank  of  Washington  v.  Reynolds,  2  Cranch  C.  C.  289;  3  C.  .t. 
P.  244;  4  Bing.  717;  Holtz  v.  Boppe,  37  N.  Y.  634;  Hale  v.  Burr,  12  Mas!<. 
8<3;  Boyd's  Adrar.  v.  City  Savings  Bank,  15  Gratt.  501;  Davis  v.  Fran- 
cisco, 11  Mo.  572;  Price  v.  Young,  1  Nott  &  McC.  438.  If  the  maker  or 
acceptor  dies  on  or  near  the  day  of  maturity,  rnd  no  representative  hr.s 
been  appointed,  the  fact  that  the  burial  has  not  occurred  will  not  be  a 
sufficient  excuse  for  leaving  without  making  a  demand  for  payment,  and 
the  demand  must  be  made  of  some  heir  or  representative  of  the  deceased. 
A  domestic  servant  is  not  a  capable  representative,  even  under  these 
exceptional  circumstances.  Toby  v.  Maurian,  7  La.  493;  Huff  v.  Ash- 
craft,  1  Disney,  277. 

2  Shed  V.  Brett,  1  Pick.  401;  Hunter  v.  Hempstead,  1  Mo.  61;  Branch 
of  State  Bank  v,  McLeran,  26  Iowa,  306;  Greatlake  v.  Brown,  2  Cranch 
C.  C.  541 ;  Thompson  on  Bills,  281. 

3  Hubbard  v.  Mattliews,  54  N.  Y.  50;  Crowley  v.  Barry,  4  Gill,  194; 
Brown  v.  Turner,  15  Ala.  632;  Coster  v.  Thomason,  19  Ala.  717;  Fourth 
Nat.  Bank  v.  Henschen,  52  Mo.  207.  It  will  be  sufficient  under  such  cir- 
cumstances to  makejdemand  of  the  agent  of  one  of  the  partners.  Brown 
V.  Turner,  supra. 

*  Kayuga  Co.  Bank  v.  Hunt,  2  Hill,  035;  1  Parsons' N.  &  B.  362; 
Story  on  Bills,  §§  346-362. 

*  Union  Bank  v.  Willis,  8  Mete.  504;  Willis  v.  Green,  5  Mete.  232; 
Arnold  v.  Dresser,  8  Allen,  435;  Taylor  v.  Davidson,  2  Cranch  C.  C.  434; 

546 


CH.  XV.]  PRESENTMENT    FOR    PAYMENT.  §    313 

held  that,  where  the  joint  obligors  are  living  in  different 
places,  so  far  apart  that  presentment  cannot  be  made  to 
all  on  the  same  day,  it  will  be  sufficient  to  make  present- 
ment to  the  one  who  was  the  most  accessible.^  But  the 
better  opinion  is,  that  if  the  joint  obligors  live  so  far 
apart,  that  demand  cannot  be  made  of  all  of  them  on  the 
same  day,  the  presentment  may  be  made,  Avithin  a  reasonable 
time  afterward,  to  those  who  are  inaccessible  on  the  day 
of  maturity.^  But  if  the  paper  is  payable  in  a  given  place, 
it  will  not  be  necessary  to  make  presentment  to  any  but 
the  resident  makers.' 

If  one  of  two  or  more  joint  obligors  dies,  presentment 
should  be  made  to  the  survivor ;  but  if  it  be  a  joint  and  sev- 
eral obligation,  it  is  probably  necessary  to  make  presentment 
also  to  the  personal  representative  of  the  deceased  obligor.* 

If  a  bill  has  been  accepted  supra  protest^  presentment 
should  be  made  to  both  the  drawee  and  the  acceptor  supra 
protest^  and  both  presentments  should  be  averred  in  the 
protest,  and  in  the  declaration  of  an  action  on  the  bill.^ 

Britt  V.  Lawson,  22  N.  Y.  S.  C.  (15  Hun)  123;  Nave  v.  Richardson,  36 
Mo.  130;  Gates  v.  Beecker,  60  N.  Y.  523;  Bank  of  Red  Oak  ».  Orvis,  40 
Iowa,  332;  Blake  v.  McMillan,  22  Iowa,  258;  s.  c.  33  Iowa,  150.  But  if 
they  have  signed  in  the  usual  manner  of  partners,  they  will  be  presumed 
to  be  partners,  and  demand  need  be  made  only  of  one  of  them.  Erwin 
V.  Downs,  15  N.  Y.  375. 

1  Harris^i;.  Clark,  10  Ohio,  5,  Hitchcock,  J.,  saying:  "  Now,  suppose 
the  makers  resided  in  different  States,  or  in  different  and  distant  parts 
of  the  same  State,  how  could  demand  be  made  of  all  in  order  to  charge 
an  indorser?  It  must  be  made  on  the  day  the  note  falls  due,  or,  where 
days  of  grace  or  allowed,  on  the  last  day  of  grace.  Will  it  be  said  that 
the  demand  can  be  made  at  different  and  distant  places  on  the  same  day 
through  the  agency  of  letters  of  attorney?  I  believe  such  a  practice  has 
not  been  heard  of,  at  least  we  have  found  nothing  like  it  in  the  books." 

2  1  Daniel's  Negot.  Inst.,  §  595;  1  Parsons'  N.  &  B.  3G3,  note  lo;  Story 
on  Notes,  §§  239,  255,  note  2. 

»  Smith  V.  Little,  10  N.  H.  526. 

*  Story  on  Notes,  §  256;  1  Daniel's  Negot.  Inst.,  §  596. 

«  Mitchell  V.  Baring,  10  B.  &  C.  4;  Williams  v.  Germaine,  7  B.  &  C. 

547 


§    314  PRESENTMENT    FOR    PAYMENT.  [CII.  XV. 

§  314.  The  place  of  presentment.  —  If  there  is  nothing 
in  the  paper,  from  which  the  phice  of  presentment  may  be 
inferred,  it  will  be  presumed  to  be  the  maker  or  acceptor's 
domicile,  or  the  place  where  he  carries  on  business.^  But 
the  place  of  the  date  ia  prima  facie  the  place  of  payment, 
for  one  is  supposed  to  execute  his  commercial  obligations 
at  his  domicile  or  place  of  business.  And  if  it  hajjpens 
that  the  place  of  the  date  is  not  the  domicile  or  place  of 
business  of  the  maker  or  acceptor,  the  holder  is  not 
required  to  make  inquiries  after  the  maker's  or  acceptor's 
domicile  or  place  of  business.  As  long  as  he  does  not 
know  where  the  maker  resides,  he  satislies  the  law,  if 
he  holds  the  paper  in  readiness  to  receive  payment  in 
the  place  of  the  date.^  But  in  order  to  free  himself  from 
the  charge  of  negligence  in  searching  after  the  maker, 
where  his  residence  or  place  of  business  is  proved  to  have 
been  elsewhere,  the  holder  is  not  obliged  to  show  that  he 
made  inquiries  after  the  maker's  domicile.^ 

468;  Hoare  v.  Cazenove,  16  East,  391.  In  California,  Dakota  and  Utah, 
this  double  presentment  is  required  by  statute.  Utah  P.  L.  (1882),  61, 
§  82;  1  Hittell's  Codes  and  Stats.  (Cal.,  1880),  §  8180;  Dakota  Rev. 
Code  (1877),  §  1893. 

1  Cox  V.  National  Bank,  100  U.  S.  713;  Mitcliellu.  Baring,  10  B.  &  C.  11. 

2  Meyer  v.  Hibscher,  47  N.  Y.  270,  Folger  J.,  saying:  "  In  such  case 
(the  note  being  dated  at  a  place,  and  payable  generally),  tlie  note  must 
be  presented  and  payment  asked  for  at  the  place  of  business  therein  of 
the  maker,  if  lie  has  one;  and  if  he  has  no  place  of  business,  then  at  his 
place  of  residence.  And  if  he  have  neither  place  of  business  nor  resi- 
dence, then,  if  the  holder  of  the  note  is  at  the  place  where  it  is  in  gen- 
eral made  payable,  on  the  day  of  payment,  with  the  note,  ready  to 
receive  payment,  it  is  sufficient  to  constitute  a  presentment  and  demand." 
See  to  same  effect  Brittou  v.  Nichols,  104  U.  S.  757;  Root  v.  Franklin,  3 
Johns.  207;  Mason  v.  Franklin,  2  Johns.  202;  Stewart  v.  Eden,  2  Caines, 
121;  Staylor  v.  Williams,  24  Md.  199;  Cox  v.  National  Bank,  100  U.  S. 
704;  Moodie  v.  Morrall,  3  Const.  R.  3G7;  Apperson  v.  Bynum,  5  Cold. 
348.  But  see  Apperson  v.  Pritchard,  9  lleisk.  793.  But  see  contra,  1 
Parsons'  N.  &  B.  458;  Mason  v.  Pritchard,  9  Heisk.  797. 

3  Smith  V.  Philbrick,  10  Gray,  252,  Merrick,  J,:  "This  is  an  action 
brought  by  indorsers  against  a  prior  judorser  to  recover  the  contents  of 

548 


CH.  XV.]  PRESENTMENT    FOR    PAYMENT.  §    314 

But  the  place  of  payment  may  be  agreed  upon  and 
proved  by  parol  evidence,  where  there  is  no  express  desig- 
nation of  a  place  of  payment  in  the  body  of  the  instrument ; 
and  the  presumption  that  the  place  of  the  date  is  the  place 
of  payment,  being  an  inference  outside  of  the  instrument 
itself,  must  give  way  to  the  express  agreement  of  the  par- 
ties to  the  contrary,  although  there  is  no  written  evidence 
of  the  agreement.  The  parol  evidence  is  held  in  such  cases 
not  to  vary  or  control  a  written  instrument.^     But  when  a 

a  promissory  note.  At  its  maturity,  the  holder  placed  it  in  the  hands  of 
a  notary  public,  who,  by  his  direction,  went  with  it  to  the  place  of  busi- 
ness which  the  maimer  formerly  occupied  in  the  city  of  Boston,  and  there 
made  inquiry  for  him,  in  order,  if  he  were  found,  to  present  it  to  him  for 
payment.  He  was  not  found,  and  no  demand  of  payment  was  made. 
The  defendant  insists  that  he  is  not  liable  as  indorser,  and  that  this  ac- 
tion cannot  be  maintained.  The  note  is  dated  and  was  made  at  Boston, 
where  the  maimer  then  was  on  a  visit  for  a  temporary  purpose  only.  He 
then,  and  has  ever  since,  resided  at  Port  Lavacca,  in  the  State  of  Texas, 
where  he  has  his  only  place  of  business.  At  the  trial  no  evidence  was 
produced  to  show  whether  the  plaintiff,  or  any  of  the  subsequent  holders 
of  the  note,  knew  that  the  maker's  residence  and  place  of  business  were 
in  Boston,  or  elsewhere ;  there  was  no  evidence  whatever  upon  that 
question.  *  *  *  -pj^g  defendant  insists  that  the  plaintiffs  ought  to 
have  been  required,  if  they  would  avail  themselves  of  that  rule,  to  show 
affirmatively  that  both  they  and  all  the  subsequent  holders  of  the 
note  were  ignorant  of  the  fact  that  the  maker  of  the  note  had  no  resi- 
dence or  place  of  business  in  the  city  of  Boston.  This  is  not  so.  The 
presumption  is,  as  has  been  before  stated,  in  the  absence  of  all  other 
evidence  upon  the  subject,  that  the  residence  of  the  promisor  is  at  the 
place  where  the  paper  to  which  he  subscribes  his  name  is  dated.  Either 
party  may  controvert  this  presumption,  and  overcome  it  by  proofs  intro- 
duced. But  no  evidence  to  the  contrary  having  been  laid  before  the 
court,  this  presumption  is  to  stand." 

1  Cox  V.  National  Bank,  100  U.  S.  713;  State  Bank  v.  Hurd,  12  Mass. 
171;  Thompson  v.  Ketchum,  4  Johns.  285;  Meyer  v.  Hibscher,  47  N.  Y. 
265;  Brett's  Exrs.  v.  Bank  of  the  Metropolis,  1  Pet.  92,  Marshall,  C.  J., 
saying:  "  The  plaintiffs  in  error  contend  that  the  testimony  ought  not 
to  have  been  admitted,  because  it  was  an  attempt  by  parol  proof  to  vai'y 
a  written  instrument.  But  this  is  not  an  attempt  to  vary  a  written  in- 
strument. The  place  of  demand  is  not  expressed  on  the  face  of  the 
note,  and  a  necessity  of  a  demand  on  the  person,  when   the  parties  are 

549 


5    314  PRESENTMENT   FOR    PAYMKNT.  [CH.  XV. 

place  of  payment  has  been  agreed  upon,  presentment  should 
be  made  at  that  place;  and  such  i)resentmcnt  is  sufficient, 
although  the  maker  or  acceptor  cannot  be  found  at  that 
place. ^ 

Where  the  paper  is  made  payable  at  either  of  two  or 
more  })laces,  presentment  may  be  made  at  either  })lace,  and 
one  such  presentment  is  sufficient  to  bind  the  drawer  and 
indorsers.^  The  same  conclusion  is  reached,  where  the 
paper    is  "  payable  at  any  bank"  in  a  certain  place. ^     So, 

silent,  is  an  inference  of  law,  which  is  drawn  only  when  they  are  silent. 
A  parol  agreement  puts  an  end  to  tliis  inference,  and  dispenses  with  a 
personal  demand.  The  parties  consent  to  a  demand  at  a  stipulated  place, 
instead  of  a  demand  on  tlie  person  of  the  maker,  and  this  does  not  alter 
the  instrument  so  far  as  it  goes,  but  supplies  extrinsic  circumstances 
which  the  parties  are  at  liberty  to  supply.  No  demand  is  necessary  to 
sustain  a  suit  against  the  maker.  His  undertaking  is  unconditional; 
but  the  indorser  undertakes  conditionally  to  pay,  if  the  maker  does  not, 
and  this  imposes  on  the  holder  the  necessity  of  taking  proper  steps  to 
obtain  payment  from  the  maker.  This  contract  is  not  written,  but  is 
implied.  It  is,  that  due  diligence  to  obtain  payment  from  the  maker 
shall  be  used.  When  the  parties  agree  what  this  due  diligence  shall  be, 
they  do  not  alter  the  written  contract,  but  agree  upon  extrinsic  circum- 
stance, and  substitute  that  agreement  for  an  act  which  the  law  prescribes 
only  when  they  are  silent." 

1  Sussex  Bank  u.  Baldwin,  2  How,  487;  Brent's  Exrs.  v.  Bank  of 
Metropolis,  1  Pet.  92;  Eason  w.  Isbell,  47  Ala.  456;  Cox  v.  National  Bank, 
100  U.  S.  71G;  Hawkey  v.  Borwick,  4  Biug.  (13  Eug.  C.  L.)  13G;  Ruotw. 
Franklin,  3  Johns.  207;  Buxton  v.  Jones,  1  M.  &  G.  83;  DeBergarsche  v. 
Pillin,  3  Bing.  47G;  Troy  City  Bank  v.  Lauman,  19  N.  Y.  477.  The  death 
of  the  acceptor  or  maker  before  maturity  does  not  affect  the  right  of  the 
holder  to  make  presentment  at  the  designated  place.  Philpot  v.  Bry- 
ant, 3  C.  &  P.  246;  s.  c.  4  Bing.  717. 

2  Beeching  v.  Gower,  1  Holt,  313;  Story  on  Notes  §  231;  Story  on 
Bills,  §  354;  DauiePs  Negot.  Inst.,  §  648. 

3  Page  V.  Webster,  15  Me.  249;  Langley  v.  Palmer,  30  Me.  467;  Mai- 
den Bank  v.  Baldwin,  13  Gray,  154;  Brickett  v.  Spalding,  33  Vt.  109; 
Freeman's  Bank  v.  Ruckman,  16  Gratt.  126;  Boit  v.  Corr,  54  Ala.  113; 
Jackson  v.  Packer,  13  Conn.  342.  Although  it  was  once  held  to  be  the 
duty  of  the  holder  to  give  notice  to  the  maker  or  acceptor,  at  which 
bank  the  paper  was  placed  (North  Bank  u.  Abbott,  13  Pick.  465),  it  is 
now  definitely  determined  to  be  tlie  duty  of  the  maker  or  acceptor  to 
tender  payment  at  all  of  the  banks,  in    order  to  find  the  paper.     Page  v. 

550 


CH.  XV.]  PRESENTMENT    FOR    PAYMENT.  §    314 

also,  where  the  drawee  or  acceptor  resides  in  one  place, 
and  the  bill  is  payable  in  another  place,  as  long  as  the 
drawee  has  not  accepted  it,  it  may  be  presented  at  either 
place. 1  And  if  the  bill  has  been  accepted  supra  protest, 
demand  should  be  made  of  the  drawee  at  the  place  where 
he  resides. 2 

After  determining  in  what  city,  town  or  village  the 
presentment  should  be  made,  it  becomes  necessary  to  as- 
certain whether  the  presentment  should  be  made  at 
the  residence  or  place  of  business  of  the  maker  or  ac- 
ceptor. If  the  presentment  is  made  to  the  maker  or  ac- 
ceptor in  person,  and  he  refuses  payment  without  any  ob- 
jection as  to  the  place  of  presentment,  it  does  not  matter 
where  the   presentment  is  made.^     But  in  order  that  the 

Webster,  15  Me.  24;  Jackson  u.  Packer,  13  Conn.  342;  Maiden  t).  Bald- 
win, 13  Gray,  154.  Bnt  the  offlceof  a  private  banker  does  not  come  within 
the  terms  of  an  instrnment  "  payable  at  any  bank."  Way  v.  Butter- 
worth,  108  Mass.  509. 

1  Thus  where  a  bill  drawn  in  Liverpool  and  payable  in  London,  was 
protested  for  both  non-acceptance  and  non-payment  in  Liverpool,  where 
the  drawee  resided,  Kent,  C.  J.,  said;  "A  general  refusal  to  pay  was 
a  refusal  to  pay  according  to  the  face  of  the  bill.  It  was  equivalent  to 
a  refusal  to  pay' in  London.  We  do  not  mean  to  say  that  the  demand 
for  payment  at  Liverpool  was  indispensable.  The  bill  being  payal)le  at 
London,  it  would  have  been  sufficient  for  the  holder  to  have  been  there 
when  the  bill  fell  due,  ready  to  receive  payment.  In  the  present  case, 
a  protest  at  London  or  a  demandand  protest  at  Liverpool,  were  sufficient 
and  thejiolder  might  take  either  course."  Mason  v.  Franklin,  3  Johns. 
202. 

2  Mitchell  V.  Barney,  10  B.  &  C.  6,  7. 

3  King  V.  Crowell,  61  Me.  244;  Baldwin  w.  Farnsworth,  1  Fairf.  414;  1 
Parsons'  N.  &B.  421;  King  v.  Holmes,  11  Pa.  St.  456,  Rogers,  J.,  saying: 
"  The  court  correctly  instructed  the  jury  that  a  demand  in  the  street  of 
an  acceptor  of  a  bill  of  exchange  is  not  a  sufficient  demand ;  that  when 
a  bill  is  payable  genei-ally,  an'd  not  at  a  particular  place,  the  demand 
must  be  at  the  place  of  business  of  the  acceptor.  But  if  the  notary,  on 
his  way  to  the  place  of  business  of  the  acceptor,  meets  him  on  the  street, 
and  informs  him  of  his  business  and  where  he  is  going,  and  the  acceptor 
offers,  if  he  will  go  to  his  place  of  business,  to  give  him  only  a  check  ou 
a  broker,  it  is  not  necessaiy  for  the  notary  to  proceed  further.     The  de- 

551 


§    ;514  rKESKNTMENT    VOU    FAYMKNT,  [CH.  XV. 

prcsentmeiit  for  paj'iuent  may  be  sufficient,  without  being 
made  to  the  maker  or  acceptor  in  person,  it  must  be  at  the 
usual  place  of  business,  or  residence,  where  one  has  a 
permanent,  or  usual  place  of  business,  even  though  it  be 
only  desk-room  in  another's  office:  it  is  certainly  sufficient 
to  bind  indorsers  and  the  drawer,  if  presentment  is  made 
there,  even  though  the  maker  or  acceptor  is  absent.^  And 
it  is  doubtful  whether  under  such  circumstances  a  pre- 
sentment at  the  residence  during  business  hours  would  be 
sufficient,  since  a  man  of  business  is  not  expected  to  be 
found  at  home  during  those  hours. ^  But  it  must  be  a 
permanent  place  of  business,  and  one  where  he  is  accus- 
tomed to  receive  presentments  for  payment. "^ 

If  the  maker  or  acceptor  has  two  places  of  business,  and 

maud  at  the  place  of  business  is  -waived  by  the  payor  or  acceptor.  It  is, 
iu  effect,  a  refusal  to  pay,  for  an  offer  to  pay  by  a  check  on  a  broker,  in 
legal  contemplation,  is  nothing.  It  is  not  such  a  tender  as  the  notary 
would  be  justified  iu  accepting.  In  this  case,  tlie  acceptor  had  no  cause 
of  complaint,  for  the  notary  offered  to  receive  a  check  on  one  of  the 
banks  in  payment  of  the  bill."  Gates  v.  Beccher,  60  N.  Y.  522,  Folger, 
J. :  "Demand  of  payment,  at  the  usual  place  of  biisiuess,  of  the  maker, 
though  he  be  absent,  is  sufficient;  or  at  his  residence;  or  to  him  in  per- 
son." 

^  Lanussa  v.  Massicot,  3  Mart.  (La.)  361;  Susses  Bank  v.  BaldAvin,  2 
Harr.  487;  West  v.  Brow,  6  Ohio  St.  542;  Bank  of  Commonwealth  v. 
Mudgett,  44  N.  Y.  514;  Williams  v.  Hoogewerff,  25  Md.  128. 

2  1  Parsons'  N.  &  B.  423;  Lanussa  r.  Massicot,  3  Mart.  (La.)  361. 

3  "  I  have  no  doubt  where  a  person  has  an  office,  or  known  and  settled 
place  of  business  for  the  transaction  of  his  moneyed  concerns,  whether 
he  be  a  banker,  broker,  merchant,  manufacturer,  mechanic,  or  dealer  iu 
any  other  way,  a  presentment  and  demand  at  that  place,  as  well  as  a  pre- 
sentment and  demand  at  his  residence,  is  sufficient.  It  must  not,  how- 
ever, be  a  place  selected  and  used  temporarily  for  the  transaction  of 
some  particular  business,  as  settling  up  some  old  books  or  accounts 
merely,  but  his  regular  and  known  place  of  business  for  the  transaction 
of  his  moneyed  concerns.  The  counting-room  of  a  banker  or  merchant 
may  be  a  proper  place  for  a  demand,  though  the  manufactory  or  work- 
shop would  not.  Yet  if  the  manufacturer  or  mechanic  have  an  office  or 
known  place  of  business  for  the  purpose  aforesaid,  a  good  demand  may 
be  made  there."     Sussex  r.  Baldwin,  2  llarr.  487. 

552 


CH.  XV.]  niESENTMENT    FOR    PAYMENT.  §    314 

neither  one  is  specified  as  the  place  of  payment,  present- 
ment must  be  made  at  both  places,  if  the  maker  or  acceptor 
is  not  found  in  the  first  presentment. ^ 

But  if  the  place  of  business  cannot  be  found,  or  the  maker 
or  acceptor  has  no  place  of  business  for  the  transaction  of 
financial  matters,  demand  must  be  made  at  the  residence.^ 
And  where  the  place  of  business  has  been  abandoned,  it  will 
not  be  enough  to  make  presentment  at  the  old  place  of 
business.^  But  if  it  is  not  abandoned,  it  is  the  duty  of  the 
proprietor  to  keep  it  open  on  business  days  during  the 
hours  of  business,  and  if  he  does  not,  the  holder  of  a  bill  or 
note  against  him  need  not  hunt  for  him  elsewhere.  At 
least  this  is  the  ruling  of  some  of  the  cases,  and  may  be 
taken  as  supported  by  the  weight  of  authority.^  And 
this  is  also  the  rule,  where  a  place  of  payment  is  specially 
designated  in  the  instrument;  for  example,  where  it  is  made 

1  Brooks  V.  Higby,  18  N.  Y.  S.  C.  (11  Hun)  236,  Smith,  J.,  sayiug: 
"  As  it  appeared  tliat  tlie  acceptor  liad  two  places  of  business  in  St.  Louis, 
the  certificate  f  urnislied  no  evidence  whatever  that  the  presentment  and 
demand  were  made  at  the  place  where  the  draft  was  payable.  The  proof 
was  fatally  defective." 

2  Jarvis  v.  Garnett,  39  Mo.  271;  Packard  v.  Lyon,  5  Duer,  82;  Sander- 
son V.  Judge,  2  H  Bl.  509;  Stevers  u.  Prentice,  3  B.  Men.  561;  Sham- 
burgh  V.  Comagere,  10  Mart.  (La.)  18;  M'Gruder  v.  Bank  of  Washington, 
9  Wheat.  198. 

3  Granite  Bank  v.  Ayers,  16  Pick.  392;  Talbot  v.  Nat.  Bank,  129  Mass. 
67. 

*  Wiseman  v.  Chiapella,  23  How.  368 ;  Baumgardncr  v.  Reeves.  35  Pa. 
St.  250;  Shed  v.  Brett,  1  Pick.  4:13;  Watson  v.  Templeton,  11  La.  Ann. 
137;  Berge  v.  Abbott,  83  Pa.  St.  159;  Bynum  v.  Apperson,  9  Heisk.  625; 
John  V.  City  Nat.  Bank,  62  Ala.  529.  But  see  contra  Ellis  v.  Commer- 
cial Bank,  7  How.  (Miss.)  294;  Otto  v.  Bclden,  28  La.  305.  In  Wiseman 
V.  Chiapella,  supra,  Wayne,  J.,  said:  "Cases  can  be  found,  and  many  of 
them,  in  which  further  inquiries  than  a  call  at  the  place  of  business  of  a 
merchant  acceptor  have  been  deemed  proper,  and  in  which  such  inquiries, 
not  having  been  made,  have  been  declared  to  be  a  want  of  due  diligence 
in  making  a  demand  for  payment;  but  the  rulings  in  such  cases  will  be 
found  to  have  been  made  on  account  of  peculiar  facts  in  them  which  do 
not  exist  in  this  case." 

553 


§    315  PRESENTMENT    lOU    PAYMENT.  [CII.  XV. 

payable  at  a  bank.  If  the  bank  or  other  i)lac'e  of  payment 
is  closed  on  the  day  that  the  paper  falls  due,  the  holder  i* 
not  bound  to  hunt  up  the  maker  or  acceptor,  at  his  place 
of  business  or  at  his  residence,  for  the  purpose  of  making 
presentment. 1  But  if  the  business  of  the  bank  or  })anker 
has  been  transferred  to  a  successor,  doing  business  at  the 
same  place,  it  is  necessary  to  present  for  payment  to  the 
succeeding  bank  or  banker.^ 

If  the  holder  does  not  know  where  to  find  the  maker  or 
acceptor,  he  must  make  the  most  diligent  inquiry,  before 
dishonoring  the  paper  by  protest  for  non-payment ;  and  he 
must  pursue  the  inquiry,  as  long  as  he  does  not  obtain 
some  definite  information  as  to  the  whereabouts  of  the 
maker  or  acceptor.^  But  if,  after  every  reasonable  dili- 
gence has  been  used  to  ascertain  the  domicile  of  the  maker 
or  acceptor,  it  is  impossible  to  find  him,  presentment  will 
be  excused,  and  the  indorsers  and  drawer  may  then  be  re- 
quired to  pay.* 

§  315.   The  time  of  presentment  —  Days  of  grace.  —  In 

order  to  hold   the  drawer  and  indorsers,  it   is  necessary  to 

^  Central  Bauk  v.  Allen,  16  Me.  41;  Appersou  v.  Bynum,  5  Cold.  349; 
Hine  V.  Allely,  4  B.  &  Ad.  624;  Sauds  v.  Clarke,  19  L.  J.  C.  P.  84;  Rogers 
V.  Langford,  1  C.  &  M.  637.  See  Howe  r.  Bowes,  16  East,  112;  5  Taunt. 
30;  Erwin  v.  Adams,  2  La.  318;  Lane  v.  Bank  of  W.  Tenn.,  9  Ileisk.  419. 

2  Central  Bank  v.  Allen,  16  Me.  41 ;  Berg  v.  Abbott,  83  Pa.  St.  158;  De- 
Wolf  V.  Murray,  2  Sand.  160;  Bynum  v.  Apperson,  9  Heisk.  637;  Sander- 
son V.  Oakey,  14  La.  373;  Roberts  v.  Mason,  1  Ala.  373. 

3  Grafton  Bauk  v.  Cox,  13  Gray,  505;  Porter  u.  Judson,  1  Gray,  175; 
Wheeler  v.  Field,  6  Met.  200;  Hill  v.  Varuell,  2  Greenl.  233;  Gilchrist  v. 
Donnell,  53  Mo.  591.  In  Grafton  Bank  t'.  Cox,  snpra,  Merrick,  J.,  said: 
"If  the  maker  had  at  the  maturity  of  the  note  resided  in  Boston,  or  in 
the  State,  or  at  any  place  to  which  the  holder  would  have  been  bound  to 
resort  to  demand  payment  of  him,  and  there  was  reason  to  suppose  that 
the  indorser  had  knowledge  of  such  residence,  the  omission  to  Inquire  of 
him  concerning  it  would  have  been  a  failure  to  use  diligence,  and  would 
have  had  the  effect  to  discliarge  the  indorsee  from  his  liability." 

i  Moore  v.  Coffield,  1  Dev.  247;  Taylor  v.  Snyder,  2  Dt-n.  145. 
554 


CH.  XV. 1  PRESKXTMENT    FOR    PAYMENT.  §    315 

present  the  paper  for  payment  on  the  day  of  maturity. 
And  presentment  before  or  after  the  day  of  maturity  will 
not  be  sufficient,  unless  the  holder  has  some  valid  excuse 
for  not  making  the  presentment  on  the  exact  day  of 
maturity.^  If  the  paper  is  payable  in  InstaHraents,  thea 
presentment  must  be  made  when  each  installment  falls  due; 
unless  it  is  ao-reed  in  the  instrument  that  if  one  installment 
is  not  paid,  the  whole  debt  becomes  due,  when  the  one 
presentment  suffices.^ 

Commercial  paper  is  usually  made  payable  on  a  certain 
day,  a  certain  time  after  date  or  after  sight,  at  sight,  or  on 
demand.  And  where  no  time  of  payment  is  stated  in  the 
paper,  it  is  payable  on  demand.^ 

But  these  statements  must  betaken  with  the  qualification 
rendered  necessary  by  the  allowance  of  days  of  grace.  In- 
stead of  being  payable  on  the  day  named  in  the  paper,  or 
at  the  time  computed  from  the  date  given  in  the  paper,  it 
is  really  payable  three  days  after  such  time.  This  rule 
grew  out  of  an  old  mercantile  custom,  of  allowing  drawees 
three  days  in  wh^'ch  to  make  arrangement  for  the  payment 
of  foreign  bills,  particularly  where  the  drawee  had  been 
taken  somewhat  by  surprise.  This  indulgence  was,  how- 
ever, at  first  a  matter  of  grace,  and  could  not  be  demanded 
by  the  obligor  as  a  matter  of  common  right.*  But  the 
custom  was  so  universally  observed  and  practiced,  that  the 
allowance  of  three  days  has  become  in  the  course  of  time  a 
jt 

^  Robinson  V.  Blen,  20  Me.  109;  Mechanics'  Bank  v.  Merchants'  Bank, 
6  Met.  13;  Windham  Bank  v.  Norton,  22  Conn.  213;  Griffin  v.  Goff,  12 
Johns,  423;  Farmers'  Bank  v.  Duvall,  7  GDI  &  J.  78;  Pendleton  v. 
Knickerbocker  Life  Ins.  Co.,  7  Fed.  Rep.  170. 

2  Oridge  v.  Sherborne,  11  M.  &  W.  374:   1  Parsons'  N.  &  B.  374. 

3  Whitlock  V.  Underwood,  2  B.  &  C.  157;  Michigan  Ins.  Co.  v.  Leaven- 
worth, 30  Vt.  11;  Thompson  tJ.  Ketcham,  8  Johns.  189;  Cornells.  Moul- 
ton,  3  Denio,  12;  Bowman  v.  McChesuey,  22  Gratt.  609;  Piuer  u.  Claiy, 
17  B.  Mon.  663. 

*  Chitty    on  Bills  (13  Am.  ed.)  [*374]  422;  1  Daniel's  Negot.  Inst., 

555 


§    315  PRESENTMENT    FOR    TAYMENT.  [CII.   XV. 

fixed  and  common  right  of  the  drawee.^  It  was  doubtful  at 
one  time  whether  days  of  grace  were  allowed  on  inland  bills 
and  promissory  notes. ^  But  it  is  now  definitely  settled  that 
no  such  distinction  is  made,  and  that  days  of  grace  are 
generally  allowed  to  all  classes  of  bills  of  exchange  and  to 
promissory  notes. ^  Wherever  grace  is  allowed,  demand 
must  be  made  on  the  last  day  of  grace,  and  presentment  on 
any  other  day  will,  as  a  rule,  not  suffice.*  While  days  of 
grace  are  very  generally  allowed  to  commercial  paper,  bills 
and  notes,  pa3^able  on  demand,  are  not  entitled  to  them. '^ 
Though  there  is  some  disposition  to  hold  that  paper  pay- 
able at  sight  was  not  entitled  to  grace,®  the  better  opinion 
is  that  such  paper  is  entitled  to  days  of  grace. ^ 

If  the  paper  is  payable  in  installments,  grace  will  be  al- 

1  Bank  of  Washington  v.  Triplett,  1  Pet.  25;  Ogden  v.  Saunders,  12 
Wheat.  213. 

2  Cramlington  v.  Evans,  2  Vent.  307;  Tasscll  v.  Lewis,  1  Ld.  Rayra. 
743;  May  v.  Cooper,  Fortescue,  376;  Dexlaux  v.  Hood,  Buller  N.  P.  274; 
Jones  V.  Fales,  4  Mass.  245;  Harrell  v.  Bixler,  Walli.  176;  Cools  v.  Gray, 
Hempstead  C.  C.  47. 

3  Brown  V.  Harraden,  4  T.  R.  148;  Leftly  v.  MUls,  4  T.  R.  170;  Ogden 
V.  Saunders,  12  Wlieat.  213;  Cook  v.  Darling,  2  R.  I.  385;  Beck  v. 
Thompson,  4  Harr.  &J.  531;  Norton  ».  Lewis,  2  Conn.  478;  Hudson  v. 
Matthews,  Morris  (Iowa),  94;  Green  v.  Raymond,  9  Neb.  299;  Crenshaw 
V.  M'Kieman,  Minor,  205. 

<  Bank  of  Washington  v.  Triplett,  1  Pet.  25;  Donegan  v.  Wood,  49 
Ala.  242.  Interest  is  also  computed  to  the  last  day  of  grace.  Bank  of 
Utica  V.  Wager,  2  Cow.  712;  Ogden  v.  Saunders   12  Wheat.  213. 

5  Oridge  v.  Sherborne,  11  M.  &.  W.  374;  Woodruff  v.  Merchants' 
Bank,  25  Wend.  673;  Barbour  v.  Bayen,  5  La.  Ann.  303;  First  Nat.  Bank 
V.  Price,  52  Iowa,  570;  Cammer  v.  Harrison,  2  McCord,  246. 

6  Dalton  City  Bank  v.  Haddock,  54  Ga.  584;  Janson  v.  Thomas,  3 
Dougl.  421;  Trask  v.  Martin,  1  E.  D.  Smith,  505.  In  Missouri  it  is  lield 
that  siglit  drafts  are  by  statute  deprived  of  grace.  Lucas  v.  Ladero,  28 
Mo.  342. 

^  Crenshaw  v-  M'Kieman,  Minor,  295;  Hart  v.  Smith,  15  Ala.  807; 
Cribbs  v.  Adams,  13  Gray,  597;  Tliornburgh  v.  Emmons,  23  W.  Va. 
325;  Knott  v.  Venable.  42  Ala.  180;  Craig  v.  Price,  23  Ark.  634;  Walsh 
V.  Dart.  12  Wis.  635;  Webb  v.  Fairmauer,  3  M.  &  W.  473;  Dixon  w. 
Nuttall,  1  Cromp.  M.  &  R.  307;   Coleman  v.  Saver,  1  Barn.  303. 

556 


CH.  XV.]  PRESENTMENT    FOR   PAYMENT.  §    315 

lowed  in  the  payment  of  ouch  install ment.^  The  law  mer- 
chant generally  limits  the  allowance  of  grace  to  three  clays, 
of  which  the  courts  will  take  judicial  notice.''  But  it  is  a 
matter  of  local  custom,  and  a  different  number  of  days  may 
be  determined  upon  ;  as,  for  example,  four  days  of  grace 
were  formerly  allowed  by  custom  in  the  District  of  Col- 
umbia, and  ten  days  in  Louisiana.^  As  soon  as  a  different 
customary  allowance  of  grace  is  recognized  by  decision,  it 
becomes  a  law,  and  there  is  no  need  of  special  proof  of  the 
varying  custom.*  But  before  receiving  such  judicial  sanc- 
tion, such  proof  is  necessary,  and  the  custom  should  be 
shown  as  prevailing  in  a  place,  rather  than  at  a  particular 
bank.^  It  is  not  necessary  in  such  a  case  to  show  that  the 
custom  was  known  to  the  person  transacting  banking  busi- 
ness at  that  place. ^ 

It  is  to  be  further  noticed,  that  days  of  grace  are  only  al- 
lowed, where  the  instruments  of  indebtedness  are  negotia- 

'  Bridge  v.  Sherborne,  11  M.  &  W.  374.  But  this  is  not  true  of  install- 
ments of  interest,  Macloou  v.  Smith,  49  "Wis.  200. 

2  Renner  v.  Bank  of  Columbia,  9  Wheat.  581 ;  Mills  v.  Bank  of  United 
States,  11  Wheat.  431;  Wood  v.  Corl,  4  Met.  203;  Jackson  v.  Henderson, 
3  Leigh,  197;  Bank  of  Columbia  v.  Magrader,  6  Har.  &  J.  172;  Lucas  v. 
Laders,  28  Mo.  242;  Reed  v.  Wilson,  41  N.  J.  L.  29;  Dollfus  v.  Frosch,  1 
Den.  367. 

3  Miller  v.  Bank  of  United  States,  11  Wheat.  431;  Dubreys  v.  Farmer, 
22  La.  Ann.  478;  Renner  v.  Bank  of  Columbia,  9  Wheat.  581;  Wood  v. 
Corl,  4  Met.  203;  City  Baukt?.  Cutter,  3  Pick.  414;  Kilgore  v.  Bulkley,  14 
Conn.  362;  Jackson  v.  Henderson,  3  Leigh,  197;  Adams  v.  Otterback,  15 
How. '539;  Bank  of  Columbia  v.  Magrader,  6  Har.  &  J.  172.  But  see 
Woodruff  V.  Merchants'  Bank,  25  Wend.  673;  6  Hill,  174;  Bowen  v.  New- 
ell, 4  Seld.  190. 

*  Cookendorfer  v.  Preston,  4  How.  317;  Edie  v.  East  India  Co.,  2  Burr. 
1221. 

fi  Renner  v.  Bank  of  Columbia,  9  Wheat.  587;  Mills  v.  Bank  U.  S.,  11 
Wheat.  431;  Adams  v.  Otterback,  15  How.  539;  Doi'chester,  etc..  Bank  v. 
Milton  Bank,  1  Cush.  177. 

«  Mills  V.  Bank  of  United  States,  11  Wheat.  431;  Fowler  v.  Brauily,  14 
Pet.  318;  Lime  Rock  Bank  v.  Hewett,  52  Me.  531. 

557 


§    31 «)  PRESENTMENT    FOU    PAYMENT.  [CH.   XV. 

ble.^  The  parties  may  at  any  time  stipulate  that  the  note 
or  bill  is  to  be  {)aid  without  an  allowance  of  days  of  grace, 
and  in  such  a  case,  the  paper  will  be  payable  without  grace.' 

§  316.  Computation  of  time  —  Effect  of  legal  holi- 
days. —  In  all  computation  of  the  time  of  payment  of  com- 
mercial paper,  the  day  of  date  is  excluded.  If  the  paper  is 
payable  in  one  or  more  years  from  date,  no  diflSculty  is 
ever  experienced  in  ascertaining  its  day  of  maturity.  The 
first  or  other  subsequent  anniversary  of  the  date  would  be 
the  day  of  maturity,  unless  days  of  grace  are  allowed,  when 
the  day  of  maturity  will  be  three  days  after  such  anniver- 
sary of  the  date. 

If  the  unit  of  time  employed  in  a  commercial  instru- 
ment be  a  month,  it  is  construed  to  be  a  calendar  month, 
and  not  a  lunar  month. ^  Some  peculiar  results  are  at- 
tained, arising  out  of  the  variable  duration  of  the  calendar 
month.  If  the  paper  is  dated  the  first  or  last  day  of  a 
month,  and  payable  in  a  given  number  of  months,  it  will  be 
payable  on  the  first  or  last  day  of  the  month  respectively. 
For  example,  a  note  made  February  first  and  payable  one 
month  from  date  will  (grace  included)  be  due  on  the  fourth 
of  March.  And  if  two  notes  be  dated  respectively  thirty-first 
of  January,  and  twenty-eighth  of  February,  each  payable 
one  month  after  date,  they  will  be  due,  respectively  (grace 
included),  on  the  third  of  March,  and  the  third  of  April. 
But  if  the  date  be  any  other  but  the  first  and  last  day  of  the 
month,  the  paper  will  fall   due  on  the  same  day,  days  of 

•  Backus  r.  Danforth,  10  Conn.  297;  Avery  v.  Stewart,  10  Conn.  69; 
Lamkinv.  Nye,  43  Miss.  241. 

2  Perkins  v.  Franklin  Bank,  21  Pick.  483;  Dumford  v,  Patterson,  7 
Mart.  (La.)  460.  But  the  intention  to  disallow  grace  must  be  clear. 
McDonald  v.  Lee,  12  La.  435;  Perkins  v.  Franklin  Bank,  supra. 

3  Lang  V.  Gale,  1  Maule  &  S.  Ill;  Matter  of  Swonford,  6  Maule  &  S. 
22G;  Thomas  v.  Shoemaker,  6  Watts  &  S.  179;  McMurchey  v.  Robinson, 
10  Ohio,  496. 

558 


CH.  XV.]  PRESENTMENT    FOR    PAYMENT.  §    316 

grace  not  included.  For  example,  a  note  dated  January 
16th,  payable  one  month  after  date,  will  fall  due  (grace  in- 
cluded) on  the  nineteenth  of  February.  And  where  there  is 
no  corresponding  day  in  the  month  in  which  the  paper  is  to 
fall  due,  the  nearest  day  will  be  the  day  of  maturity.  Thus, 
a  note  dated  twenty-ninth  or  thirtieth  of  January  and  pay- 
able one  month  after  date,  will  be  due  (grace excluded), 
twenty-eighth  of  February;  unless  it  be  a  leap  year,  when 
it  will  be  due  the  twenty-ninth  of  February.^ 

If  the  paper  is  payable  in  a  given  number  of  days  **  after 
date,"  "  after  sight"  or  "  after  demand,"  the  day  of  date, 
of  sight  or  of  demand,  is  excluded,  and  the  day  of  payment 
is  included.  For  example,  if  the  paper  is  payable  thirty 
days  after  date,  and  the  paper  was  dated  January  first,  it 
would  fall  due  (grace  included)  on  the  third  of  February; 
and  if  the  paper  was  dated  February  first,  it  would  be  due 
(grace  included),  on  the  sixth  of  March,  except  in  leap- 
year,  when  the  day  of  payment  would  be  the  fifth  of  March. ^ 

The  object  of  the  date  of  commercial  paper  is  principally 
to  fix  the  day  of  maturity,  and  the  day  of  maturity  will  be 
computed  from  the  given  date,  whether  the  paper  was  de- 
livered before  or  after  that  date.^  If  the  date  is  not  given 
in  the  paper,  or  is  an  impossible  one,  the  computation 
is  made  from  the  day  of  delivery  ;*  and  if  the  day  of  de- 

1  Wagner  v.  Kenner,  2  Rob.  (La.)  120 ;  Roehner  v.  Knickerbocker  Life 
Ins.  Cg.,  63  N.  Y.  163;  Hartford  Bank  v.  Barry,  17  Mass.  94:  Wood  v. 
MuUer,  3  Rob.  (La.)  299;  Ripley  v.  Greenleaf,  2  Vt.  129;  1  Daniel's  Ne- 
got.  Inst.  §§  624,  625;  Story  on  Notes,  §  213a;  Story  on  Bills,  §330. 

2  Henry  v.  Jones,  8  Mass.  453;  Ainraidown  v.  Woodman,  31  Me.  580; 
Coleman  v.  Sayer,  1  Barn.  303;  Sturdy  v.  Henderson,  4  B.  &  Aid.  592; 
Lester  v.  Garland,  15  Ves.  248;  Hill  v.  Norvell,  3  McLean,  883;  Loring  v. 
Hailing,  15  Jolms.  120;  Taylor  v.  Jacoby,  2  Pa.  St.  495;  Mitcliell  v.  De 
Grand,  1  Mason,  176;  Barlow  v.  Planters'  Bank,  9  How.  (Miss.)  129. 

3  Powell  V.  Waters,  8  Cow.  699;  Brewster  v.  McCardle,  8  Wend.  478. 
Parol  evidence  is  not  admissible  to  vary  tlie  date.  Huston  v.  Young,  33 
Me.  85. 

*  Mechanics'  Bank  v.  Scliiiyler,  7  Cow.  337. 

559 


§    316  PRESEXTMENT    FOR    PAYMENT.  [CH.  XV. 

livery  ciinnot  be  proved,  then  from  the  time  when  it  ap- 
pears tirst  to  have  been  in  existence.^ 

If  paper  falls  due  on  a  Sunday  or  other  legal  holiday, 
presentment  for  payment  cannot  be  made  on  that  day,  for 
by  the  law  all  banking  business  is  then  suspended.  If  the 
days  of  grace  are  not  allowed,  and  the  holiday  is  the  actual 
day  of  maturity  of  the  paper,  and  not  the  last  day  of  grace, 
since  the  maker  or  acceptor  cannot  be  compelled  to  pay 
sooner  than  he  had  promised  to  pay,  demand  would  have  to 
be  made  on  the  next  succeeding  business  day.^  But  if  the 
days  of  grace  are  allowed,  and  the  last  day  of  grace  is  a 
holiday,  the  demand  should  be  made  on  the  day  j^receding, 
the  second  day  of  grace ;  and  if  the  two  holidays  come 
together,  taking  up  the  second  and  third  days  of  grace, 
demand  should  still  be  made  on  the  day  preceding,  viz.,  on 
the  first  day  of  grace.  This  rule  is  the  survival  of  the  origi- 
nal character  of  the  allowance  of  days  of  grace,  when  they 
were  indeed  days  of  grace,  not  to  be  demanded  as  a  matter 
of  right,  but  to  be  received  as  a  matter  of  grace.  Being  an 
act  of  indulgence,  the  maker  or  acceptor  could  not  require 
the  holder   to  increase  or  extend  it.^ 

If  the  holiday  does  not  fall  on  the  last  day,  it  is  counted 
in  the  computation  of  time,  as  if  it  had  been  a  business  day. 

1  Mahier  v.  LeBlauc,  12  La.  Ann.  207. 

2  Avery  v.  Stewart,  2  Conn.  69 ;  Colms.  v.  Bank,  4  Baxt.  422;  Salter  v. 
Burt,  20  Wend.  205;  Sands  v.  Lyon,  18  Conn.  18;  Barrett  ».  Allen,  10 
Ohio,  426;  Staples  v.  Franklin  Bank,  1  Met.  43;  Kuntz  v.  Tompel,  48  Mo. 
75. 

3  Bussard  v.  Levering,  6  Wheat.  192 ;  Shepard  v.  Hall,  1  Conn.  329 ; 
Kilgore  v.  Bulkley,  14  Conn.  302;  Reed  v.  Wilson,  41  N.  J.  L.  29;  Shep- 
pard  V.  Spates,  4  Md.  400;  Barrett  v.  Allen,  10  Ohio,  426;  Tassell  i:. 
Lewis,  1  Ld.  Rayin.  743;  WooIIey  u.  Clements,  11  Ala.  220;  Morris  ??. 
Ricliards,  45  L.  T.  R.  (x.  s.)  210;  Lewis  v.  Burr,  2  Caines,  195;  Barlow 
V.  Gregory,  31  Conn.  201;  Kuntz  v.  Tempel,  48  Mo.  75;  Story  on  Bills,  § 
338;  Sheldon  v.  Benhara,  4  Hill,  129;  Adams  v.  Otterback,  15  How.  539; 
Farnum  v.  Fowle,  12  Mass.  89;  Mechanics',  etc.,  Bank  v.  Gibson,  7 
Wend.  400. 

560 


CH.  XV.]  PRESENTMENT    FOR    PAYMENT.  §    317 

This  is  also  true,  where  the  holiday  is  the  first  or  second 
day  of  grace. ^  The  courts  will  take  judicial  knowledge  of 
the  dates  on  which  the  holidays  fall.^ 

What  are  legal  holidays  are  regulated  by  statute  in  the 
different  States.  Generally,  they  include  Sundays,  Christ- 
mas day,  Fourth  day  of  July,  Thanksgiving  Day  ;  and  some- 
times the  twenty-second  of  February,  New  Year's  day  and 
Good  Friday,  are  included.  Laws,  which  declare  the  sus- 
pension of  business  on  legal  holidays,  have  been  questioned 
as  being  an  unconstitutional  impairment  of  the  obligation 
of  the  contract,  where  payment  is  postponed  to  the  next 
day.^  But  the  contrary  has  been  generally  maintained.* 
Where  the  observance  of  a  holiday  is  a  local  custom,  not 
sanctioned  by  law,  the  demand  on  a  preceding  day  would 
not  bind  the  indorser,  unless  the  custom  was  known  to  him 
and  the  other  parties  to  the  instrument.^ 

§  317.  At  what  hour  of  the  day  pi'esentment  should  be 
made.  —  If  the  paper  is  payable  generally,  demand  of  pay- 
ment must  be  made  at  the  place  of  business  or  residence  of 
the  maker  or  acceptor.  If  it  is  made  at  the  place  of  business 
it  must  be  made  during  the  ordinary  business  hours.^  But 
if  there  is  some  one  present  at  the  place  of  business,  when 
the  demand  is  made,  who  was  authorized  to  make  payment, 

1  Woolley  V.  Clements,  11  Ala.  229. 

2  Rtfed  V.  Wilson,  41  N.  J.  L.  29. 

8  Duerson's  Admr.  u.  Alsop,  27  Gratt.  238. 
*  Barlow  t7.  Gregory,  31  Conn.  261. 

5  City  Bank  v.  Cutter,  3  Pick.  414;  Dabney  v.  Campbell,  9  Humph. 
680;' Mills  V.  Bank  of  United  States,  11  Wheat.  430. 

6  Lunt  V.  Adams,  17  Me.  230;  Dana  v.  Sawyer,  22  Me.  244;  Morgan  v. 
Davison,  1  Stark.  114;  MacFarland  v.  Pico,  8  Cal.  626;  Tuggs  v.  Neuan- 
hahn,  1  C.  &  P.  631;  Wallace  v.  Crilleo,  46  Wis.  577.  But  in  order  to 
determine  what  are  the  ordinary  hours  of  business  in  the  place  of 
payment,  reference  is  to  be  made  to  the  general  hours  of  business  of  that 
place,  and  not  to  the  hours  of  business  of  a  particular  calling  or  trade. 
Thompson  on  Bills,  302;  1  Daniel's  Negotiable  Inst.,  §  601. 

36  561 


§    317  PRESENTMENT    FOR   PAYMENT.  [CH.  XV. 

antl  who  refuses  to  pay,  it  would  be  a  good  presentment, 
although  made  after  business  hours. ^ 

Where  the  demand  may  be  made  at  the  dwelling  of  the 
maker  or  acceptor,  it  must  be  made  at  some  reasonable 
hour,  when  one  is  not  accustomed  to  retire  to  bed,  and  when 
one  may  be  expected  to  receive  a  visitor. ^  But  a  demand 
at  any  time  of  the  day  will  be  good,  if  made  upon  the 
maker  or  acceptor  personally,  even  though  he  gets  up  out 
of  the  bed  to  answer  the  call.^ 

If  the  paper  is  payable  at  a  particular  bank,  then  pre- 
sentment must  be  made  during:  banking  hours.*  But  if 
made  after  banking  hours  to  the  officers  of  the  bank,  who 
are  authorized  to  make  payment,  it  will  be  sufficient.® 
The  maker  or  acceptor  has  the  whole  day  in  which  to  make 
payment ;  but  ordinarily  he  cannot  compel  the  holder  to 
make  a  second  demand  on  him,  if  a  demand  had  been  al- 
ready made  earlier  in  the  day.  In  such  a  case  the  maker 
must  go  and  tender  payment.^     But  some-times,  by  local 

1  Henry  v.  Lee,  2  Chitty's  Rep.  125;  Garnett  v.  "Woodcock,  1  Stark. 
475 ;  1  Parsons,  420. 

2  Stivers  v.  Prentice,  3  B.  Mou.  461;  Nelson  v.  Fotterall,  7  Leigh, 
179;  Skelton  r.Dusteu,  92  111.  49;  Barclay  v.  Bailey,  2  Campb.  527;  Dana 
V.  Sawyer,  22  Me.  244. 

3  Faruswortji  v.  Allen,  4  Gray,  453;  1  Parsons,  417. 

<  Elford  u.  Teed,  1  Maule  &  S.  28;  Parker  v.  Gordon,  7  East,  385; 
Eeed  u.  Wilson,  12  Vroom,  29;  Staples  w.  Franklin  Bank,  1  Met.  43; 
Thorpe  v.  Pecks,  28  Vt.  127. 

s  Bank  of  Utica  v.  Smith,  18  Johns.  230;  Bank  of  Syracuse  v.  HoUister, 
17N.  Y.  46;  Salt  Springs  Nat.  Banks.  Burton,  58  N.  Y.  432;  Flint  v. 
Rogers,  15  Me.  57;  Reed  v.  Wilson,  41  N.  J.  L.  29;  Cohen  v.  Hunt,  2 
Sraed.  &M.  227;  Goodloe  ?;.  Godley,  13  Smed.  &  M.  227;  First.  Nat. 
Bank  v.  Owen,  23  Iowa,  185;  Commercial  Bank  v.  Hamer,  7  How.  (Miss.) 
448;  Barbarous  v.  Waters,  3  Met.  (Ky.)  304;  Newark  Rubber  Co.  v. 
Bishop,  3  E.  D.  Smith,  48;  Thomas  v.  Marsh,  2  La.  Ann.  353;  Shepherd 
V.  Chamberlain,  8  Gray,  225;  Crook  v.  Jadis,  6  C.  &  P.  191.  But  if  made 
to  an  unauthorized  agent,  or  to  an  authorized  agent  on  the  street,  the 
presentment  is  insufficient.  Newark  Rubber  Co.  v.  Bishop,  supra;  Swan 
%\  Hodges,  3  Head,  251. 

<5  1  Parsons,  374. 

562 


CF:.  XV.]  PRESENTMENT    FOR   PAYMENT.  §    318 

usage,  it  is  required  that  a  bill  or  note,  payable  in  a  bank, 
shall  be  kept  there  all  day,  so  that  the  maker  or  acceptor 
may  pay  it  at  any  hour  of  the  day.  Where  such  is  the  cus- 
tom, there  has  not  been  sufficient  presentment,  if  the  paper 
has  been  taken  away  before  the  close  of  banking  hours. ^ 
If  a  paper  is  payable  "  at  bank  "  and  not  at  a  particular 
bank  —  the  general  banking  hours,  observed  at  the  place 
of  payment,  and  not  the  hours  of  a  particular  bank,  will  be 
considered  in  determining  the  hour  when  presentment 
should  be  made.^  The  courts  will  take  judicial  notice  of 
the  banking  hours  of  any  large  city  lying  within  the  juris- 
diction of  the  court,  in  which  the  action  has  been  brought. 
In  all  other  cases,  it  is  likely  that  proof  would  be  required.^ 

§  318.  Mode  of  presentment.  — When  the  presentment 
is  made,  the  paper  should  itself  be  exhibited,  in  order  that 
the  promisor  may  inspect  it,  if  he  desires,  and  obtain 
possession  of  it,  as  soon  as  he  pays  it.  And  while  an 
actual  exhibition  of  the  paper  may  perhaps  not  be  required, 
the  demand  must  be  accompanied  by  some  statement  or 
ind-ication  that  the  paper  is  in  the  actual  possession  of  the 
person  who  is  making  the  presentment.*  But  if  the  maker 
or  acceptor  states  his  inability  to  pay,  and  does  not  demand 
the  exhibition  of  the  paper,  a  more  formal  presentment 
will  be  considered  as  having  been  waived.^     If  the  paper 

1  Planters'  Bank  v.  Markham,  5  How.  (Miss.)  397;  Harrison  v. 
Crowcler,  6  Smed.  &  M.  iCA. 

2  United  States  Bank  v.  Carneal,  2  Pet.  543;  Church  v.  Clark,  21  Pick. 
310. 

s  Morse  on  Banking,  371. 

4  Musson  V.  Lake,  4  How.  262;  Freeman  v.  Boynton,  7  Mass.  483; 
Shaw  u.  Reed,  12  Pick.  132;  Arnold  v.  Dresser,  8  Allen,  435;  Posey  v. 
Decatur  Bank,  12  Ala.  802;  Draper  «.  Clemens,  7  Mo.  52;  Smith  v.  Gibbs, 
2  Sined.  &  M.  479;  Nailor  v.  Bowie,  3  Md.  251;  Etheridge  v.  Ladd,  44 
Barb.  69;  Crandall  v.  Schroeppel,  1  Hun,  557. 

5  King  V.  Crowell,  61  Me.  244;  Lockwood  v.  Crawford,  18  Conn.  361; 
Gilbeit  V.  Dennis,  3  Mete.  495;  Fall  River  Union  Bank  v.  Willard,  5  Mete. 
216. 

563 


§    318  PRESENTMENT    I'OK    PAYMENT.  [Cll.  XV. 

is  payable  at  a  bunk,  it  will  bo  sufficient  that  the  paper  is  at 
the  bauk  in  the  possession  of  one  who  is  entitled  to  receive 
payment.  An  exhibition  of  the  paper  to  the  promisor 
will  not  be  required,  unless  he  demands  it.^  And  where 
the  paper  is  the  property  of  the  bank,  at  which  it  is  pay- 
able, it  is  presumed  that  the  bank  has  possession  of  it, 
until  the  contrary  is  proved.-* 

It  has  also  become  an  established  usage  in  some  States, 
for  the  bank  which  holds  the  paper  to  give  notice  to  the 
promisor  a  few  days  before  maturity,  that  his  paper  is  at 
the  bank  and  will  be  due  on  a  certain  day.  This  notice  is 
by  usage  made  to  answer  the  more  formal  presentment  on 
the  day  of  maturity.  Where  the  paper  is  payable  at  the 
bank,  since  no  formal  presentment  is  required,  there  can 
be  no  objection  to  this  preliminary  notice.^  But  it  has 
been  held  that  this  preliminary  notice  will  take  the  place 

1  Fullerton  v.  Bauk  of  United  States,  1  Pet.  (i04;  Bank  of  United  States 
■0.  Carneal,  2  Pet.  543;  Cliicopee  Bank».  Philadelphia  Bank,  8  Wall.  641; 
HufEaker  v.  National  Bank,  13  Bush,  649;  Graham  v.  Sangstou,  1  Md. 
68;  People's  Bank  v.  Brooks,  31  Md.  7;  Folger  v.  Chase,  18  Pick.  63; 
Berkshire  Bank  v.  Jones,  6  Mass.  524;  Woodiu  v.  Foster,  16  Barb.  146; 
Nichols  V.  Goldsmith,  7  Wend.  160;  Ward  v.  Northern  Bauk,  14  B.  Men. 
351;  Appcrson  v.  Union  Bank,  4  Cold.  445;  Goodloe  v.  Godley,  13  Smed. 
&  M.  233;  State  Bauk  v.  Napier,  6  Humph.  270;  Allen  v.  Miles,  4  Harr. 
234;  Saundcrson  v.  Judge,  2  H.  Bl.  509;  Reynolds  v.  Chettle,  2  Camp. 
596;  Merchants'  Bank  v.  Elderkin,  25  N.  Y.  178;  Gillett  v.  Averill,5  Den. 
85.  But  it  is  necessaiy  that  some  one  at  the  bank  is  aware  of  the 
presence  of  the  paper  in  the  bank.  It  -will  not  be  sufficient,  if  the  paper 
has  been  mailed  by  the  holder  to  the  cashier,  and  the  envelope  contain- 
ing the  paper  has  slipped  through  a  crack  in  the  cashier's  desk,  before 
he  has  become  aware  of  its  contents.  Chicopee  Bauk  v.  Philadelphia 
Bank,  supra. 

2  Fullerton  v.  Bank  United  States,  1  Pet.  604;  Bank  of  United  States 
V.  Carneal,  2  Pet.  543;  Chicopee  Bank  v.  Philadelphia  Bank,  8  Wall.  641; 
Berkshire  Bank  r.  Jones,  6  Mass.  324;  Folger  v.  Chase,  18  Pick.  63; 
Seneca  Co.  Bauk  v.  Neass,  5  Den.  329;  State  Bauk  v.  Napier,  6  Humph. 
270. 

3  Camden  v.  Doremus,  3  How.  515;  Lincoln  &  Kennebec  Bauk  v. 
Page,  9  Mass.  155;  Lincoln  &  Kennebec  Bank  v.  Hemraatt,  9  Mass.  159. 

564 


CH.  XV.]  PRESENTMENT    FOR   PAYMENT.  §    318 

of  the  formal  presentment  on  the  day  of  maturity,  even 
where  the  paper  is  payable  generally,  instead  of  at  a  par- 
ticular bank.i  It  has  been  held  that  the  drawer  and  in- 
dorsers  must  know  of  the  usage,  in  order  that  they  wiU  be 
bound  by  this  method  of  preliminary  notice  and  demand. 2 
But  where  the  paper  is  payable  at  a  particular  bank,  the 
parties  to  it  must  be  presumed  to  have  intended  "  to  be 
governed  by  the  usage  of  the  bank  at  which  they  have 
chosen  to  make  the  security  itself  negotiable."  ^  But  this 
preliminary  notice  must  be  a  prevalent  custom  of  the  place, 
and  not  a  usage  of  that  particular  bank,  in  order  that  it 
may  bind  parties  ignorant  of  its  existence.* 

The  demand  should  not  vary  from  the  tenor  of  the  paper. 
If  it  is  payable  generally,  it  will  not  be  a  good  presentment 
if  gold  be  demanded,* 

1  Jones  V.  Tales,  4  Mass.  245;  Widgery  v,  Munroe,  6  Mass,  449;  Weld 
V.  Gorham,  10  Mass.  366;  Whitewell  v.  Johnson,  17  Mass.  449;  Me- 
chanics' Bank  v.  Merchants'  Bank,  6  Mete.  24;  Grand  Bank  v.  Blanchard, 
23  Pick.  505;  Marine  Bank  v.  Smith,  18  Me.  99;  Gallagher  v.  Eoberts,  11 
Me.  489.  But  see  contra  Moore  v.  Waitt,  13  N.  H.  415;  Barnes  v. 
Vaughau,  6  R.  I.  259;  Pearson  v.  Bank  of  Metropolis,  1  Pet.  89;  Farmers' 
Bank  v.  Duvall,  7  Gill  &  J.  78.  This  has  been  very  properly  character- 
ized as  a  provisional  custom.     2  Ames  on  B.  &  N.  682. 

2  Leavitt  v.  Times,  3  N.  H.  14. 

3  Mills  V.  Bank  of  United  States,  11  Wheat.  431. 

*  Dorchester,  etc.,  Bank  v.  Milton,  1  Gush.  177;  Adams  v.  Otterback, 
15  How.  539. 

5  Langerberger  v.  Kroeger,  48  Cal.  147. 

565 


CHAPTER    XYI. 

PROTEST. 

Section  321.  The  object  and  necessity  of  protest. 

322.  By  whom  protest  should  be  made. 

323.  Where  protest  should  be  made. 

324.  By  whom  should  presentment  be  made  in  preparation  for 

protest. 

325.  Noting  the  dishonor  and  extending  the  protest. 

326.  The  contents  of  certificates  of  protest. 

327.  Protest,  evidence  of  what. 

§  321.  The  object  and  necessity  of  protest.  — The  pro- 
test is  intended  to  furnish  to  the  holder  legal  testimony  of 
the  fact  that  the  required  presentment  and  demand  of  pay- 
ment has  been  made,  and  notice  of  dishonor  given  to  be  used 
in  an  action  for  the  face  value  of  the  paper  against  the 
drawer  and  indorsers.^  The  protest  by  a  notary  does  away 
with  the  necessity  of  proving  these  various  required  acts  by 
witnesses  in  open  court.  "Where  all  the  witnesses  live  with- 
in the  jurisdiction  of  the  court,  as  is  the  usual  case  with 
inland  bills  of  exchange,  the  difficulty  of  proving  these 
facts  by  the  examination  of  witnesses  is  not  so  great,  al- 
though the  expense  of  this  method  of  proof  may  be  greater, 
particularly  where  the  witnesses  do  not  reside  in  the  same 
place,  although  within  the  jurisdiction  of  the  court.  But 
where  they  reside  beyond  the  State,  as  where  the  instru- 
ment is  a  foreign  bill  of  exchange,  they  cannot  be  com- 
pelled to  testify  ;  and  unless  there  was  some  other  method 
of  proving  these  necessary  facts,  the  holder  of  a  foreign  bill 
is  in  danger  of  failing  to  establish  his  claim  of  exoneration 

1  Swaync'y.  Turner.  17  Kan.  629;  "Walker  v.  Turner,  2  Gratt.  636. 

566 


I 


CH.  XVI.]  PROTEST.  §    321 

against  the  drawer  and  indorsers.  For  this  reason,  it  has 
been  a  universal  rule  of  the  law  merchant  in  England  and 
.  the  United  States,  that  in  order  that  th6  drawer  and  in- 
dorsers of  a  foreign  bill  of  exchange  maybe  held  liable,  the 
holder  must  protest  the  bill  for  non-payment.  But  in  the 
absence  of  statutes  to  the  contrary,  it  is  not  necessary  to 
protest  domestic  paper. ^  The  protest  is  so  indispensable 
to  a  foreign  bill  of  exchange,  in  case  of  non-payment,  that 
no  other  evidence  will  supply  the  place  of  it.  It  has  be- 
come an  organic  part  of  the  bill  itself.'' 

Aslongas  a  promissory  note  has  not  been  indorsed,  there 
is  no  need  of  proof  of  presentment  for  payment  and  notice 
of  dishonor,  and  consequently  no  need  of  protest.  But  as 
soon  as  a  foreign  note  has  been  indorsed,  and  presentment 
and  notice  of  dishonor  become  necessary,  in  order  to  hold 
the  indorser,  it  has  been  held  that  the  protest  of  foreign 
notes  will  also  be  required,  on  the  ground  that  the  indorse- 
ment of  a  note  is  essentially  a  bill  drawn  by  the  payee  on 
the  maker. ^ 

1  Orr  V.  Maglnnis,  7  East,  359;  Leftly  v.  Mills,  4  T.  R.  170;  Gale  v. 
Walsh,  5  T.  R.  239;  Borough  v.  Perkins,  1  Salk.  131;  Young  v.  Bryan,  6 
Wheat.  146;  Union  Bank  «.  Hyde,  G  Wheat.  372;  Burke  v.  McKay,  2  How. 
66 ;  Bailey  u.  Dozier,  6  How.  23;  Bank  of  United  States  v.  Leathers,  10  B. 
Mon.  64;  Phoenix  Bank  v.  Hussey,  12  Pick.  483;  Ocean  Nat.  Bank  v.  Will- 
iams, 102  Mass.  141;  Hubbard  v.  Troy,  2  Ired.  134;  Green  v.  Louthain,  49 
Ind.  139;  McMarchey  v.  Robinson,  10  Ohio  St.  496;  Smith  v.  Curlee,  102 
Mass.  141.  According  to  the  law  of  most  foreign  nations,  the  protest  Is 
necessary  in  tlie  event  of  the  dishonor  of  any  bill.  Thompson  on  Bills 
(Wils<)n's  ed.),  307. 

2  Union  Bankw.  Hyde,  6  Wheat.  572;  Borough  v.  Perkins,  1  Salk.  121; 
2  Ld.  Raym.  992 ;  Carter  v.  Union  Bank,  7  Humph.  548 ;  Chitty  on  Bills 
(13  Am.  ed.),  [*333]  373. 

3  Carter  v.  Burley,  9  N.  H.  558;  Smith  v.  Little,  10  N.  H.  826;  Ticonic 
Bank  v.  Stackpole,  41  Me.  302;  Piner  v.  Clary,  17  B.  Mon.  645;  Williams 
V.  Putnam,  14  N.  H.  540,  Parker,  C.  J.,  saying:  ''The  similarity  between 
the  indorsement  of  notes,  and  the  drawing  and  indorsement  of  bills  of 
exchange  is  so  great,  that  there  can  be  no  sound  reason  given  for  es- 
tablishing or  preserving  a  distinction  between  them,  and  requiring  a  dif- 
ferent character  of  evidence  to  prove  the  same  facts  with  regard  to  two 

5G7 


§    321  PROTEST.  [Cl£.   XVI. 

But  the  law  luerchant  does  not  require  protest  in  the  case 
of  dishonor  of  inland  or  domestic  bills  and  notes,  and  inde- 
j)endently  of  statute  the  protest  of  such  paper  means 
nothing  and  has  no  value  whatever.^  But  the  great  con- 
venience of  proving  the  fact  of  dishonor  by  a  notarial  pro- 
test has  brought  about  the  enactment  of  statutes  in  many,  if 
not  in  most  of  the  States,  whereby  a  notarial  protest  is 
allowed  in  the  case  of  inland  bills  and  notes  in  like  manner. 
In  some  of  the  States  it  is  made  an  absolute  requirement 
as  in  the  case  of  foreign  bills;  and,  perhaps  everywhere, 
the  protest  of  inland  bills  and  notes,  when  provided  for  by 
statute,  is  required  in  order  to  recover  the  damages  pro- 
vided for  under  the  statute.  But,  generally,  the  statutes 
are  permissive  only,  and  do  not  make  it  incumbent  upon 
the  holder  of  inland  bills  and  notes  to  protest,  in  order  to 
save  the  liability  of  drawer  and  indorsers.^ 

Although  a  bill,  payable  at  a  certain  time  after  date,  need 
not  be  presented  for  acceptance  until  maturity, ^  yet  if  it  be 
presented  for  acceptance  at  an  earlier  day,  and  acceptance 
be  refused,  the  bill  must  be  immediately  protested,  and 
notice  of  dishonor  given,  in  order  to  hold  indorsers 
and  drawer.^  Whenever  a  bill  has  been  presented  for 
acceptance  and  dishonored,  it  must  be  protested  for 
non-acceptance.^     But  if  there  has  been  a  protest  for  non- 

instruraents,  which,  though  different  in  some  respects  as  to  their  phrase- 
ology, are  so  essentially  similar  in  their  nature  and  operation."  But 
see  contra  Kirtland  v.  Wauzer,  2  Duer,  278. 

1  1  Daniel's  Negot.  Inst.,  §  927. 

2  Bailey  v.  Dozier,  6  How.  23;  Wauzer  v.  Tupper,  8  How.  234. 

8  As  to  the  requirraents  of  presentment  for  acceptance,  see  ante,  §  211. 

4  Bank  of  Washington  v.  Triplett,  1  Pet.  25;  O'lveefe  v.  Dunn,  6 
Taunt.  305;  s.  c.  5  Maule  &  S.  282;  United  States  v.  Barker,  4  Wash.  C. 
C.  464. 

^  Gale  V.  Wash,  T.  R.  239;  Watson  v.  Loring,  3  Mass.  557;  Winthrop 
V.  Pepoou,  1  Bay,  4(',8;  Sterry  v.  Robinson,  1  Day,  11;  Allen  v.  Mer- 
chants' Bank,  22  Wend.  215;  Mason  v.  Franklin,  3  Johns.  202;  Phillips 
u.  McCurdy,  1  Harr.  &  J.  189;  Thompson  t>.  Cumming,  2  Leigh,  321 ; 
5(58 


OH. 


XVI.]  PROTEST.  §    322 


acceptance,  it  is  not  necessary  to  present  for  payment  and 
protest  for  non-payment,  although  a  separate  protest  for 
non-payment  may  be  made  at  maturity  of  the  bill.^ 

If  the  holder  has  the  paper  protested  for  non-payment, 
when  the  law  merchant  does  not  even  allow  protest,  —  and  it 
is  likely  also,  when  it  does  not  require  protest,  —  the  notary 
public  cannot  recover  his  fees  of  the  parties  to  the  paper.^ 
It  may,  however,  be  a  legitimate  charge  against  the  parties, 
where  protest  is  permitted,  but  not  required,  as  in  the  case 
of  inland  bills,  and  the  collecting  bank  has  not  been  notified 
that  protest  was  not  desired.^ 

§  322.  By  whom  protest  should  be  made.  —  As  a  gen- 
eral rule  protest  should  be  made  by  a  notary  public,  and 
by  the  same  notary  who  presented  the  paper  for  payment 
or  acceptance,  and  noted  the  dishonor.*  But  if  there  be 
no  notary  in  the  place  of  payment,  then  the  protest  may 
be  made  out  by  a  reputable  citizen,  in  the  presence  of  two 
witnesses.  The  witnesses  do  not  seem  to  be  absolutely 
required,  except  in  England  as  to  inland  bills,  but  it  is 
customary  to  have  them.° 

story  on  Bills,  §  273.  But  it  has  been  held  by  the  Supreme  Court  of  the 
United  States  and  of  Pennsylvania,  that  protest  for  and  notice  of  non- 
acceptance  need  not  be  shown,  for  the  reason  that  they  were  not  required 
by  the  law  merchant  of  this  country.  •  Brown  v.  Barry,  3  Dallas,  365; 
Clark  V.  Russell,  3  Dallas,  295;  Read  v.  Adams,  6  Serg.  &  R.  358. 

1  De  la  Torre  v.  Barclay,  1  Stark.,  pt.  2,  7;  Campbell  v.  French,  6  T. 
K.  200;  «"hompson  on  Bills  (Wilson's  ed.),  308. 

-  1  Parsons'  N.  &  B.  646 ;  Johnson  v.  Bank  of  Fulton,  29  Ga.  260. 
This  is  pai'ticularly  true,  where  there  is  no  drawer  or  iudorser  to  be 
charged  by  the  notice  of  dishonor.  German  v.  Ritchie,  9  Kan.  110; 
Noyes  v.  White,  9  Kan.  640;  Cramer  v.  Eagle  Mfg.  Co.,  23  Kan.  400. 

3  Merritt  v.  Benton,  10  Wend.  117. 

*  Cribbs  v.  Adams,  13  Gray,  597;  Ocean  Nat.  Bank  f?.  Williams,  102 
Mass.  141;  Commercial  Bank  v.  Varnum,  49  N.  Y.  269;  Commercial 
Bank  v.  Barksdale,  36  Mo.  563;  Sacriber  v.  Brown,  3  McLean,  481. 

»  Burke  v.  McKay,  2  How.  66;  Read  v.  Bank  of  Kentucky,  IT.  B. 
Mon.  91;  Todd  v.  Neal's  Admr.,  49  Ala.  273. 


§     'S2-i:  PROTEST.  [CH.   XVI. 

In  making  the  protcijt,  the  notary  is  to  follow  the  instruc- 
tions of  the  holder  of  the  paper;  and  he  is  not  responsible, 
if  the  instructions  were  wrong,  and  his  following  them 
results  in  damage  to  the  holder.^ 

§  323.  Where  protest  should  be  made.  —  The  protest 
for  non-acceptance  may  be  made  at  the  domicile  of  the 
drawee  or  at  the  place  of  payment,  if  the  two  places  are 
different.  But  since  the  presentment  for  acceptance  must 
be  made  at  the  domicile,  it  is  better  to  protest  it  at  that 
place. 2  The  protest  for  non-payment  should  be  made 
always  at  the  place  of  payment,  although  it  has  been  held 
to  be  permissible  to  protest  for  non-payment  at  the  domi- 
cile of  the  drawee,  where  there  has  been  a  refusal  to  accept 
the  bill.3 

§  324.  By  whom  should  presentment  be  made  in 
preparation  for  protest.  —  While  any  holder  of  the  paper 
may  present  it  for  payment,  and  receive  payment ;  *  if  pay- 
ment or  acceptance  is  refused,  and  it  becomes  necessary  to 
protest  it  for  non-payment  or  non-acceptance,  the  notary 
public  who  is  to  make  the  protest  is  obliged  by  law  to 
make  a  second  demand,  so  that  he  can  of  his  own  personal 
knowledge  testify  to  the  fact  of  dishonor.  And  although 
it  is  more  or  less  customary  for  the  notary's  clerk  to  make 
the  presentment  and  demand  for  payment,  it  is  almost  uni- 
versally held  by  the  courts  to  be  insufficient  for  any  one  to 
make  the  presentment  but  the  notary  who  notes  the  dis- 
honor and    protests    for  non-payment.^     But,  of   course, 

1  Commercial  Bank  v.  Varuum,  14  N.  Y.  S.  C.  (7  Hun)  236;  s.  c.  49  N. 
Y.  2G9. 

2  Chitty  on  Bills  (13th  Am.  ed.),  [*334]  374;  Thompson  on  Bills,  308. 

3  Mitchell  V.  Baring,  4  C.  &  P.  35;  19  Eng.  C.  L.  2G1 ;  s.  c.  10  Barn.  & 
C.  4;  21  Eng.  Com.  Law,  12. 

■*  See  ante,  §  311. 

6  Leftly  V.  Mills,  4  T.  R.  170;  Ocean  Nat.  Bank  v.  Williams,  102  Mass. 

570 


CII.  XVI.]  PROTEST.  §    325 

proof  of  general  custom  would  be  admissible  to  show  that 
in  a  particular  place  the  practice  for  a  notary's  clerk  to 
make  the  demand  was  recognized.^  And  it  has  been  held 
to  be  admissible,  in  obedience  to  a  local  custom,  for  the  de- 
mand to  be  made  by  the  deputy  of  the  notary.^  But  the 
custom  must  be  proved,  affirmatively,  to  relate  to  foreign 
bills.  It  would  not  be  sufficient  to  prove  that  such  a  custom 
prevailed  as  to  the  protest  of  inland  bills  and  notes. ^ 

§  325.  Noting  the  dishonor  and  extending  protest.  — 

The  law  merchant  requires  that  the  essential  part  of  the 
protest  should  be  made  on  the  same  day  that  the  present- 
ment and  demand  was  made.  And,  ordinarily,  where  the 
notary  is  not  unduly  pressed  by  business,  he  would  make 
out  his  protest  on  that  day.  But,  for  the  convenience  of 
notaries,  whose  time  may  be  so  fully  occupied  that  it  may 

143;  Dougan  v.  Wood,  49  Ala.  242;  Commercial  Bank  v.  Varnum,  49  N. 
Y.  275;  Cribbs  v.  Adams,  13  Gray,  597;  Busch  v.  Hill,  24  Tex.  153;  Locke 
V.  Huling,  24  Tex.  311;  Bank  of  Kentucky  v.  Casey,  3  B.  Mon.  629;  Mc- 
Clane  v.  Fitch,  4  B.  Mon.  600;  Wittenberger  v.  Spalding,  33  Mo.  421; 
Commercial  Bank  v.  Barksdale,  36  Mo.  563;  Chenowitli  v.  Chamberlin,  6 
B.  Mon.  60;  Carter  v.  Brown,  6  Humph.  548;  Sacrider  v.  Brown,  3 
McLean,  481.  In  Commercial  Bank  v.  Barksdale,  Holmes;  J.,  said:  «'  It 
is  well  established  that  the  presentmeut  and  demand  must  be  made  by 
the  same  notary  who  protests  the  bill ;  it  cannot  be  done  by  the  clerk,  or 
by  any  other  person  as  his  agent,  though  he  be  also  a  notary.  The  pro- 
test is  to  be  evidence  of  the  facts  stated  in  it,  of  which  the  notary  is  sup- 
posed to  have  actual  knowledge,  and  credit  is  given  to  his  official 
statements  by  the  commercial  world  on  the  faith  of  his  public  or  official 
character.  The  notarial  protest  must  state  facts  known  to  the  person 
who  makes  it,  and  he  cannot  delegate  his  official  character  or  his  func- 
tions to  another."    But  see  Chitty  on  Bills  (13th  Am.  ed.),  355,  note  4. 

*  Commercial  Bank  v.  Varnum,  49  N.  Y.  275;  Commercial  Bank  v. 
Barksdale,  36  Mo.  568;  Wittenberger  ?7.  Spalding,  33  Mo.  421;  Nelson  v. 
Fotterall,  7  Leigh,  179;  Cribbs  v.  Adams,  13  Gray,  600. 

2  McClaue  v.  Fitch,  4  B.  Mon.  600;  Bank  of  Kentucky  v.  Gary,  6  B. 
Mon.  629;  Buckley  v.  Seymour,  30  La.  Ann.  1384;  Cribbs  v.  Adams,  13 
Gray,  600;  Carter  v.  Union  Bank,  7  Humph.  548. 

3  Ocean  Nat.  Bank  v.  Williams,  102  Mass.  143.  See  Stewart  v.  Allison, 
6  S.  &  R.  324. 

571 


§    325  PROTEST.  [CH.  XVI. 

be  impossible  for  them  to  make  out  the  protest  on  the  same 
day,  the  hiw  permits  this  part  of  the  work  to  be  postponed 
to  some  future  day,  if  he  makes  a  minute  on  the  back  of 
the  paper,  or  otherwise,  of  the  fact  of  presentment  and  dis- 
honor ;  giving  the  date,  the  facts  of  presentment,  demand 
and  refusal,  together  with  any  reasons  for  the  same,  if  any 
were  given,  and  the  charges  of  protest.  This  is  called 
noting  the  dishonor,  and  while  it  was  not  known  to  the 
early  law,  custom  has  made  it  an  equivalent  of  the  protest 
itself,  as  to  the  requirement  that  protest  should  be  made  on 
the  same  day.^ 

If  the  dishonor  is  not  noted,  or  protest  written  out,  on 
the  same  day,  the  drawer  and  indorsers  will  be  discharged; 
for  the  notary  is  not  allowed  to  trust  to  his  memory  for  the 
requisite  particulars. ^  If  the  dishonor  has  been  properly 
noted  on  the  day  of  presentment,  the  extension  or  comple- 
tion of  the  protest  may  be  made  at  any  time  before  trial. "^ 
This  is  the  general  rule,  and  although  it  has  been  contended 
that  the  extension  of  the  protest  should  be  completed  be- 
fore the  payment  in  the  case  of  acceptance  supra  protest, 
the  distinction  is  not  recognized  ;  and  in  this,  as  in  other 
cases,  the  extension  may  be  made  at  any  time  before  trial, 
provided  the  noting  of  dishonor  had  been  made  on  the  day 
of  dishonor.*  Where  a  bill  is  protested  both  for  non-ac- 
ceptance and  non-payment,  it  will  not  be  sufficient  to  note 

1  Chaters  v.  Bell,  4  Esp.48;  Geralopulo  v.  Wieler,  10  C.  B.  690;  3Eug. 
L.  &  Eq.  515;  Leftly  v.  Mills,  4  T.  R.  170. 

2  Dennistoun  v.  Stewart,  17  How.  GOG;  Butler  v.  Play,  1  Mod.  27; 
Thompson  on  Bills,  315;  Leftly  v.  Mills,  7  T.  R.  170;  Story  on  Bills,  §§ 
278,  283;  Chittyon  Bills,  377. 

3  Chaters  v.  Bell,  4  Esp.  48;  Robins  r.  Gibson,  1  Maule  &  S.  288;  Orr 
V.  Maginuis,  7  East,  358,  citing  Goostrey  v.  Head,  BuUer  N.  P.  271; 
Bailey  v.  Dozior,  G  How.  23;  Dennistoun  v.  Stewart,  17  How.  GOG; 
Cayuga  Co.  Bank  v.  Hunt,  2  Hill,  635;  Bank  of  Decatur  v.  Hodges,  9  Ala. 
631;  Commercial  Bank  v.  Barksdale,  3G  Mo.  503 

•*  Vaudenvall  v.  Tyrrell,  1  Mood.  &  Malk.  87;  Geralopulo  v.  Wider,  10 
C.  B.  690;  3  Eng.  L.  &  Eq.  515. 
572 


CH.   XVI.]  TKOTEST.  §    32l> 

it  for  Don-acceptanco,  ami  only  extend  the  protest  for  non- 
payment.    Both  protests  should  be  extended.^ 

§  326.  The  contents  of  certificate  of    protest.  — In  the 

first  place,  it  is  always  essential  to  state  the  date  of  the 
presentment ;  and  it  has  been  held  that  any  error  in  the  cer- 
tificate, which  makes  the  date  of  presentment  different  from 
the  day  of  maturity,  will  be  fatal  to  the  claim  of  the  holder 
against  the  drawer  and  indorsers,-'  unless  the  minutes  of 
dishonor  contain  a  correct  statement  of  the  date,  when  a 
new  and  correct  extension  of  the  protest  can  be  made. 

Although  it  is  not  necessary,  it  is  advisable  for  the  pro- 
test to  contain  a  statement  of  the  hour  when  presentment 
was  made. 

In  the  second  place,  if  the  paper  is  payable  at  a  particu- 
lar place,  it  is  required  that  the  notarial  certificate  should 
state  the  place  of  presentment.^ 

In  the  third  place,  there  should  be  distinct  and  separate 
statements  of  presentment  for  payment  and  demand  of 
payment.  Both  presentment  and  demand  must  be  alleged,* 
although  it  has  been  held  in  Louisiana,  that  it  is  sufficient 
to  state  that  payment  was  demanded,  and  not  necessary  to 
state  further  that  the  paper  was  presented  or  exhibited,  for 
that  fact  may  be  implied  from  the  allegation  of   demand.^ 

In  the  fourth  place,  it  must  be  stated  in  plain  language, 
that  payment  or  acceptance  had  been  refused.^ 

1  Orr  V.  Maginnis,  7  East,  359;  Roger  v.  Stephens,  2  T.  R.  713. 

2  Walmsley  v.  Acton,  U  Barb.  312. 

3  People's  Bank  v.  Brooke,  31  Md.  7. 

*  Musson  V.  Lake,  4  How.  262;  Bank  of  Vergennes  v.  Cameron,  7 
Barb.  143;  Farmers'  Bank  v.  Allen,  18  Md.  475;  Union  Banku.  Fowlkes, 
2  Sneed,  555;  Nave  v.  Richardson.  36  Mo.  130. 

i>  Nott  V.  Beard,  16  La.  308. 

*  Arnold  u.  Kinloch,  50  Barb.  44;  Youngs.  Bennett,  7  Bush,  477; 
Taylor  v.  Bank  of  Illinois,  7  T,  B.  Mon.  576 ;  Littledale  v.  Maberry,  43 
Me.  264. 

573 


§.  32<)  PROTEST.  [CII.   XVI. 

Ill  the  fiflh  place,  the  names  of  the  persons  by  whom  and 
to  whom  the  presentment  and  demand  had  been  made. 
And  if  when  the  bill  is  presented  it  is  impossible  to  find  any 
one  of  Avhom  demand  can  be  made,  the  statement  of  that 
fact  will  suffice.^ 

Sometimes  the  reason?  given  by  the  drawee,  acceptor  or 
maker  for  refusing  to  honor  the  paper,  are  stated  in  the 
certificate  of  protest.  But  this  is  not  necessary.^  But  it 
is  quite  important  and  usual,  although  perhaps  not  abso- 
lutely necessary,  to  prefix  to  the  certificate  a  copy  of  the 
bill  or  note,  with  all  the  indorsements  thereon,  so  that  the 
original,  on  which  the  protest  was  issued,  may  be  easily 
identified.^  The  notary  should  also  sign  the  protest.  But 
if  the  protest  be  indeed  his  own  act,  his  name  may  be  writ- 
ten by  a  clerk  or  printed,  it  being  only  required  that  the 
protest  be  issued  by  his  authority.* 

Finally,  the  general  law  merchant  requires  the  seal  of  the 
notary  to  be  attached  to  the  certificate,  in  order  that  the 
certificate  may  be  received  as  prima  facie  proof  of  its  con- 
tents.^ If  the  certificate  is  not  sealed,  it  does  not  prove 
itself,  and  it  must  be  shown  by  extfaneous  evidence  that 
the  certificate  was  duly  made  by  the  person  acting  as 
or  for  a  notary,  and  that  it  was  sufficient  without  a  seal, 

1  Hikleburn  v.  Turner,  6  How.  69;  Otsego  Co.  Bank  v.  "Warren,  18 
Barb.  290;  Nelson  v.  Fotterall,  7  Leigh,  179;  Stainback  w.  Bank  of  Va., 
11  Gratt.  260;  Duckert  v.  Van  Lilienthal,  11  Wis.  56. 

2  1  Daniel's  Negot.  Inst.,  §  957;  Chitty  on  Bills  [*458],  516,  517; 
Story  on  Bills,  §  276. 

3  Story  on  Bills,  §  276;  Chitty  on  Bills  [*458],  517. 
<  Fulton  V.  McCracken,  18  Md.  528. 

^  Nichols  V.  Webb,  8  Wheat.  326;  Townsley  v.  Sumrall,  2  Pet.  170; 
DicKensu.  Beal,  10  Pet.  582;  Carters.  Burley,  9  N.  H.  558;  Bryden  w. 
Taylor,  2  Har.  &  J.  399 ;  Mullen  v.  Morris,  2  Barr,  86 ;  Kirksey  v.  Bates, 
7  Port.  (Ala.)  529;  Donegan  v.  Wood,  49  Ala.  251 ;  Bradley  v.  Northern 
Bank,  60  Ala.  258;  Nelson  v.  Fotterall,  7  Leigh,  180.  But  see  contra 
Bank  of  Kentucky  v.  Pursley,  3  T.  B.  Mon.  240;  Huffuker  t?.  National 
Bank,  12  Bush,  293;  Lambeth  v.  Caldwell,  1  Rob.  (La.)  61. 
574 


CH.  XVI.]  PROTEST.  §    327 

according  to  the  law  of  the  phice  of  presentment.^  If  the 
law  of  the  place  of  presentment  requires  the  seal,  no  other 
mode  of  authentication  will  answer. ^  Any  sort  of  impres- 
sion on  the  paper  will  be  a  sufficient  seal,  according  to  the 
law  merchant,  except,  possibly,  a  mere  scroll.^ 

Sometimes,  the  certificate  of  protest  states  to  whom  no- 
tice of  dishonor  is  given,  but  the  effect  of  this  statement 
in  the  certificate  is  discussed  in  the  succeeding  section.* 

§  327.  Protest,  evidence  of  what.  —  The  notarial  cer- 
tificate is  evidence  of  the  facts  therein  stated,  only  so  far 
as  they  fall  within  the  duty  of  the  notary  in  making  the 
presentment  and  demand  for  payment.  If  he  goes  beyond 
this,  and  certifies  to  collateral  facts,  having  no  bearing 
upon  the  facts  of  presentment  and  demand,  it  is  not  lawful 
evidence  of  those  facts,  and  if  those  facts  are  to  be  proven, 
other  testimony  must  be  introduced.^ 

Although  it  is  quite  customary  for  the  notary  to  give  the 
notices  to  the  drawer  and  indorsers,  he  is  not  obliged 
to  do  so,  unless  he  is  requested,  or  unless  there  is  a  local 
custom,  which  makes  it  a  part  of  the  notary's  duty .^  Since 
it  is  not,  according  to  the  common-law  merchant,  a  part  of 
the  notary's  duty  to  give  the  notice ;  if  he  in  fact  gives  the 
notices,  and  certifies  in  the  protest  to  the  fact  that  notices 

1  Carter  v.  Burley,  9  N.  H.  558;  Chaaoine  v.  Fowler,  3  Wend.  173. 

2  Bauk  Si  Rochester  v.  Gray,  2  Hill,  227;  Ticknor  v.  Roberts,  11  La.  14. 

3  Bauk  of  Manchester  u.  Slason,  13  Vt.  334;  Carter  v.  Burley,  9  N.  H. 
558;  Bradley  v.  Northern  Bank,  60  Ala.  258;  Conolly  v.  Goodwin,  5  Cal. 
220.     See  Donegan  v.  Wood,  49  Ala.  251 

1  §  327. 

5  Townsley  v.  Sumrall,  2  Pet.  170;  Chase  v.  Taylor,  4  Har.  &  J.  54. 
For  example,  the  statement  that  the  drawee  had  no  effects  or  funds  of 
the  drawer.  Dakin  u.  Graves,  48  N  H.  45;  Dumout  v.  Pope,  7  Blackf. 
367;  1  Parsons' N.  &  B.  639.  See,  also,  Maccoun  v.  Atchafalaya  Bank, 
13  La.  342. 

6  Dickens  v.  Beal,  10  Pet.  582;  Morgan  tJ.  Van  Ingen,  2  Johns.  204; 
Miller  v.  Hackley,  5  Johns.  384 ;  Bank  of  Rochester  v.  Gray,  2  Hill,  231. 

575 


§    327  PROTEST.  [CH.   XVI. 

were  issued,  the  certificate  is  not  legal  evidence  of  that  fact, 
and  the  fact  must  be  established  by  other  evidence.^  But 
the  statutes  of  the  different  States  usually  provide  now,  that 
the  notarial  certificate  of  protest  will  be  taken  as  evidence 
of  any  facts  stated  therein  in  respect  to  notice.  The  pro- 
test is  also  evidence  only  of  the  facts  stated;  and  if  some 
material  fact  is  omitted,  it  will  not,  as  a  general  rule,  be 
supplied  by  inference  or  implication.  But  there  are  some 
cases,  in  which  material  facts  will  be  presumed  from  the 
facts  stated.  Thus,  it  has  been  hekP  and  likewise  denied^ 
that  if  a  certificate  states  that  notice  was  addressed  to  the 
drawer  or  indorser  at  a  particular  place,  without  stating 
that  the  place  is  his  post-office  or  residence,  the  law  will  pre- 
sume that  it  is.  But  it  may  be  added,  that  such  a  question 
can  only  arise  where  the  notice  is  sent  to  some  other  place 
than  where  the  bill  bears  date,  for  the  law  does  presume  the 
place  of  date  to  be  the  domicile  of  the  drawer.*  It  is  not 
sufficient  evidence  of  a  proper  demand  or  notice,  for  the 
certificate  to  state  that  demand  was  made  or  notice  left  at 
the  residence,  or  place  of  business  of  a  particular  person, 
unless  it  proceeds  to  state  to  whom  the  demand  or  notice 
was  addressed.  If  the  latter  statement  is  left  out,  the 
evidence  is  not  sufficient  to  prove  due  diligence  on  the  part 

1  Miller  v.  Hackley,  5  Johus.  384;  Bank  of  Vergennes,  7  Barb.  144; 
Walker  v.  Turner,  2  Gratt.  53G;  Dickens  v.  Beal,  10  Pet.  582;  Williams 
V.  Putnam,  14  N.  H.  540:  Couch  v.  Sherrill,  17  Kan.  624;  Swayze  v.  Brit- 
ten, 17  Kan.  625;  Lloyd  v.  McGair,  3  Barr.  482;  Rives  v.  Parmley,  18 
Ala.  256.  But  sec  cojiim  2  Parsons' N.  &  B.  498;  Bank  of  Rochester  v. 
Gray,  2  Hill,  231. 

2  Bank  of  United  States  v.  Smith,  11  Wheat.  171 ;  Linkonsu.  Hale,  27 
Gratt.  668;  Walmsley  v.  Rivers,  34  Iowa,  466. 

3  Bradshawv.  Hedge,  10  Iowa,  402;  Turner  v.  Rogers,  8  Ind.  140; 
Stiles  V.  Inman,  55  Miss.  472;  Sullivan  v.  Deadmau,  19  Ark.  486;  Walker 
V.  Tunstall,  3  How.  (Miss.)  259;  Ellis  v.  Commercial  Bank,  7  How. 
(Miss.)  294;  Sprague  v.  Tyson,  44  Ala.  340. 

*  See  ante,  §  314. 

576 


cii.  xvr.]  PROTEST.  §   327 

of  the  notary  to  find  the  interested  parties.^  If  the  certifi- 
cate states  that  demand  was  made  on  the  acceptor's  book- 
keeper, clerk,  or  agent  at  the  acceptor's  place  of  business, 
it  will  be  taken  as  presumptive  evidence  of  the  person  be- 
ing the  acceptor's  or  drawee's  agent  or  clerk. ^  But  it  is 
different,  where  the  demand  was  not  made  at  the  drawee's 
place  of  business  or  residence.  In  such  a  case,  the  agency 
of  the  person,  on  whom  demand  was  made,  must  be  estab- 
lished by  other  evidence.^ 

It  has  been  held,*  and  likewise  denied^  that  it  will  be  suffi- 
cient if  the  certificate  statesthat  *'  due  notice  was  given,"  or 
that  the  party  "was  duly  notified."  The  objection  to 
such  a  statement  is  that  it  is  itself  an  allegation  of 
the  sufficiency  of  the  notice,  which  is  a  question  of  law 
to  be  determined  by  the  court  and  jury,  and  not  by  the 
notary.  For  the  same  reason,  it  has  been  held  insufficient 
for  the  certificate  of  protest  to  state  that  the  notary  '*  made 
diligent  search  and  inquiry"  for  the  maker  or  acceptor.^ 

But  if  the  protest  has  been  made  at  the  proper  time  and 

1  Rives  V.  Parmley,  18  Ala.  262;  Whaley  v.  Houston,  12  La.  Ann.  585; 
Nelson  u.Fotterall,  7  Leigh,  179;  Stainbackv.  Banls  of  Virginia,  11  Gratt. 
260;  Bank  of  Commonwealth  v.  Mudgett,  U  N.  Y.  514. 

2  Ehillips  u.  Poindexter,  18  Ala.  579;  Bradley  v.  Northern  Bank,  60 
Ala.  259;  Dickerson  v.  Turner,  12  Ind.  223.  And  it  would  be  presumed, 
if  not  stated,  that  the  drawee  or  acceptor  was  absent.  Gardner  v.  Bank 
of  Tennessee,  1  Swan,  420. 

3  Drullim  V.  Bradfute,  18  La.  Ann.  681;  Coleman  v.  Smith,  26  Pa.  St. 
255. 

*  Ticonic  Bank  v.  Stackpole,  41  Me.  321;  LewistownBank  v.  Leonard, 
43  Me  144;  Orono  Bank  v.  Wood,  49  Me.  26;  Pattee  v.  McCrillis,  53  Me. 
410;  Bushworthv.  Moore,  36  N.  H.  144;  Simpson  v.  White,  40  N.  H.540; 
Union  Bank  v.  Middlebrook,  33  Conn.  95;  Tate  v.  Sullivan,  30  Md.  464; 
Galladay  v.  Bank  of  Union,  2  Head,  57;  Kern  v.  Van  Phal,  7  Minn.  426; 
McFarland  v.  Pico,  8  Cal.  626. 

5  Ducket  w.  Van  Lilienthal,  11  Wis.  56;  Kimball  v.  Bowen,  2  Wis. 
224;  Smith  v.  Hill,  6  Wis.  154;  Couch  v.  Sherrill,  17  Kan.  622. 

6  Cockrill  V.  Loewensteiu,  9  Heisk.  206;  Bennett  v.  Young,  18  Pa.  St. 
261. 

37  577 


§    327  PROTEST.  [Cll.  XVI. 

place  and  in  the  proper  manner,  but  all  the  statements  nec- 
essary to  prove  demand  and  notice  do  not  appear  on  the 
face  of  the  notarial  certificate,  parol  evidence  is  admissible 
to  supply  the  deficiency.^ 

The  protest  is  evidence  of  the  facts  stated  therein,  only 
in  the  case  of  foreign  bills  and  notes,  unless  a  statute  has 
applied  the  rule  of  protest  to  inland  bills  and  notes. ^  Where 
a  State  statute  provides  for  the  protest  of  an  inland  bill,  it 
is  evidence  of  dishonor  only  in  the  State  in  which  the  bill 
was  executed.^  So,  also,  is  the  protest  of  a  foreign  bill 
no  evidence  of  dishonor  in  the  country  in  which  the  protest 
was  made.^ 

Finally,  the  protest  \s prima  facie  evidence  only,  and  the 
facts  stated  therein  may  be  disproved  by  any  competent 
testimony  to  the  contrary.^ 

^  Magoun  v.  Walker,  49  Me.  420;  Seneca  Co.  Bank  v.  Neass,  5  Denio, 
329;  Hunter  v.  VanBomhorst,  1  Md.  504;   Nailor  v.  Bowie,  3  Md.  252 
Graham  u.  Langster,  1  Md.  59;  Sasseer  v.  Fanners'  Bank,  4   Mo,  429 
Wetherall  ?;.  Claggett,  28  Md.   5G5;  Reynolds  v.  Appleman,  41  Md.  615 
Stainbacku.  Bank  of  Va.,  11  Gratt.  269. 

-  Young  V.  Bryan,  6  Wheat.  146;  Union  Bank  v.  Hyde,  6  Wheat.  572; 
Bond  V.  Bragg,  17  111.  69;  Sullivan  v.  Deadman,  19  Ark.  484;  Sumner  v. 
Bowen,  2  Wis.  524. 

3  Dutchess  Co.  Bank  v.  Ibbottson,  5  Dev.  110. 

<  Chessmer  v.  Noyes,  4  Camp.  129;  Nicholls  ».  Webb,  8  Wheat.  326. 
See  contra  Story  on  Bills,  §  277,  n.  2. 

^  Dickens  v.  Bcal,  10  Pet.  582;  Spencev.  Crockett,  5  Baxt.  576;  Rick- 
etts  V.  Pendleton,  14  Md.  330;  Howard  Bank  v.  Carson,  50  Md.  27;  Nel- 
son V.  Fotterall,  7  Leigh,  180;  Union  Bank  v.  Fowlkes,  2  Sneed,  555. 
578 


CHAPTEK   XYII. 


NOTICE  OF  DISHONOR. 

Section  331.  Nature  and  necessity  of  notice. 

335.  Wtio  may  give  ttie  notice. 

336.  To  wliom  notice  slioulcl  be  given. 

337.  Tlie  time  allowed  for  giving  notice. 

338.  Mode  of  giving  notice,  when  important. 

339.  Mode  of  giving  notice  when  parties  reside  in  same  place. 

340.  How  and  where  personal  notice  must  be  served. 

341.  Mode  of  serving  notice  when  parties  reside  in  different 

places. 

342.  To  what  post-office  notice  should  be  addressed. 

343.  What  is  meant  by  "  residing  at  same  place." 

344.  What  constitutes  notice  —  May  be  verbal  or  written. 

345.  A  sufficient  description  of  the  bill  or  note. 

346.  Statement  of  dishonor  and  protest. 

347.  Statement  that  holder  looks  for  payment  to  party  notified. 

348.  Allegation  and  proof  of  notice. 

§  334.  Nature  and  necessity  of  notice. —  Whenever  a 
commercial  instrument  is  dislionored  by  a  refusal  to  accept 
or  pay,  it  becomes  the  duty  of  the  holder  to  give  immedi- 
ate notice  to  all  parties  to  the  instrument,  secondarily  lia- 
ble, whom  he  wishes  to  hold  liable.  The  requirement  to 
give  notice  to  drawers  and  indorsers  is  considered  as  en- 
tering as  a  condition  into  the  contract  of  these  parties,  and 
their  .liability  is  made  to  depend  upon  the  performance  of 
the  condition.^  The  breach  of  the  condition,  ^.e.,  the  fail- 
ure to  give  notice  of  dishonor,  constitutes  so  complete  a 
discharge  of  the  liability  of  the  drawer  or  iudorser,  that 

1  Mussou  V.  Lake,  4  How.  262:  Rothschild  v.  Currie,  41   E.  C.  L.  R 
43. 

579 


§    335  NOTICE    OF    DISHONOR.  [CII.  XVII. 

they  cannot  be  held  liable  on  the  original  transaction  which 
constitutes  the  consideration  for  their  liability  on  the  com- 
mercial paper.  ^ 

Notice  is  not  required  to-  be  given  to  parties  primarily 
liable,  such  as  sureties  and  accommodation  makers. ^  Nor 
is   notice  required  where  the  i)aper  is  non-negotiable.'' 

§  335.  Who  may  give  the  notice.  —  It  is  well  settled  that 
a  total  stranger  to  the  paper  and  to  the  parties  to  the  paper, 
cannot  give  the  notice.*  The  notice  must  be  given  by 
some  party  to  the  paper,  or  by  his  duly  authorized  agent. 
And  where  the  notice  is  given  by  an  agent,  it  may  be 
given  in  the  name  either  of  the  agent  or  of  the  prin- 
cipal.^ In  his  capacity,  as  the  agent  of  the  holder,  the 
notary  may  give  the  notice;^  and  so,  also,   any  bank  or 

1  Bridges  v.  Berry,  3  Taunt.  130 ;  3  M.  &  S.  362 ;  Darrach  v.  Savage, 
1  Show.  155;  Rogers  v.  Stephens,  2  T.  R.  713;  Gale  v.  Walsh,  5  T.  R. 
239;  Peacock  v.  Purcell,  U  C.  B.  (x.  s.)  728;  Smith  v.  Miller,  43  N.  Y. 
171;  52  N.  Y.  546;  Betterton  v.  Roope,  3  Lea,  220;  Shipman  v.  Cook,  1 
Green  (N.  J.),  251;  Rucker  v.  Hiller,  16  East,  43;  3  Campb.  217;  Allan 
V.  Eldred,  50  "Wis  136.  And  this  is  true,  even  though  the  parties  to  the 
commercial  paper  expressly  agree  that  tlie  taking  of  the  paper  shall  ex- 
onerate the  parties  to  the  original  debt,  until  the  paper  has  been  paid. 
Their  liability  on  the  original  del^t  is  necessarily  conditional  upon  the 
saving  of  their  liability  as  parties  to  the  paper.  Reid  v.  Coats,  Bro.  P. 
C;  Chitty  on  Bills  [*434],  488. 

2  Hays  V.  N.  W.  Bank,  9  Gratt.  127. 

3  Pitman  v.  Breckenridge,  3  Gratt.  129. 

■*  Stanton  v.  Blossom,  14  Mass.  116;  Stewart  v.  Keunett,  2  Camp.  177; 
Chanoine  v.  Fowler,  3  "Wend.  173;  Juniata  Bank  v.  Hale,  16  Serg.  &  R. 
157;  Brailsford  v.  Williams,  15  Md.  150;  Story  on  Notes,  §  301;  Tliomp- 
6on  on  Bills,  355. 

5  Harrison  v.  Ruscoe,  15  M.  &  W.  231;  Woodthrop  v.  Lawes,  2  M.  & 
W.  109;  Logerson  v.  Hare,  1  Jur.  71. 

6  Shed  V.  Brett,  1  Pick.  401;  Bank  of  Utica  v.  Smith,  18  Jolins.  230; 
Smedes  v.  Utica  Bank,  20  Jolms.  372;  s.  c.  3  Cow.  662;  Safford  v. 
Wyckoff,  1  Hill,  11;  Cowperthwaite  v.  Sheffield,  1  Saudf.  416;  Fulton  v. 
McCracken,  18  Md.  528;  Crawford  v.  Branch  Bank,  7  Ala.  205;  Renick  v. 
Robbins,  28  Mo.  339;  Swayze  v.  Britton,  17  Kan.  629. 

580 


CH.  XVII.]  NOTICE    OF    DISHONOR.  §    335 

banker,  in  whose  hands   the  paper   is    placed    for  collec- 
tion.^ 

Of  course,  any  lawful  holder  of  the  paper,  whether  he 
holds  it  in  trust  for  another,  or  for  his  own  benefit,  may 
give  the  notice. ^  But  it  is  not  necessary  for  him  to  give 
it.  If  the  notice  is  given  to  a  prior  indorser,  by  one  whose 
liability  has  been  already  fixed,  it  will  enure  to  the  benefit 
of  the  holder.  For  example,  if  the  holder  or  his  agent, 
gives  notice  to  the  immediate  indorser  alone,  and  he  (the 
notified  indorser)  then  sends  notices  to  the  other  prior  in- 
dorsers,  these  prior  indorsers  will  not  only  be  bound  to  the 
indorsee,  who  gives  the  notice,  but  also  to  the  holder.^ 
But  in  order  that  an  indorser' s  notice  may  bind  another  in- 
dorser, the  liability  of  the  indorser,  giving  the  notice,  must 
be  fixed  by  having  himself  received  the  required  notice  of 
dishonor.  If  he  has  not  received  this  notice,  he  is  dis- 
charged from  liability,  and  may  properly  be  treated  as  a 
stranger  to  the  paper.*  But  it  is  not  necessary  for  the  inter- 
mediate indorser  to  know  when  he  sends  out  his  notices, 
that  a  notice  had  been  sent  to  him.  His  ignorance  of  his 
being  notified  will  not  invalidate  his  own  notices  to  prior 
indorsers.^ 


1  Freeman's  Bank  v.  Perkins,  7  Shep.  292;  Ogden  v.  Dobbin,  2  Hall, 
112;  Bank  of  State  of  Mo.  v.  Vauglian,  36  Mo,  90. 

2  Story  on  Bills,  §  303;  Cowperthwaite  v.  Sheffield,  1  Sandf.  416. 

3  Hilton  V.  Shepherd,  6  East,  U;  Chapman  v.  Keene,  3  Ad.  &  El.  193; 
4  Nev.  &'M..  607;  Jameson  v.  Swinton,  2  Camp.  373;  Lysaught  v.  Bryant, 
9  C.  B.  46;  s.  c.  2  Carr.  &  K.  1016 ;  Wilson  v.  Swabey,  1  Stark.  34 ;  Marr  v. 
Johnson,  9  Yerg.  1;  Swayze  v.  Brittou,  17  Kan.  627;  Triplett  v.  Hunt,  3 
Dana,  126 ;  Whitman  v.  Farmers'  Bank,  8  Port.  (Ala.)  258 ;  Stanton  v.  Blos- 
som, 14  Mass.  116;  Bachellorv.  Priest,  12  Pick.  406;  Stafford  u.  Yates, 
18  Johns.  327;  Bank  of  United  States  v.  Goddard,  5  Mason,  366;  Wilson 
V.  Mitchell,  4  How.  (Miss.)  272;  Abat  v.  Rion,  9  Mart.  (La.)  465;  Reu- 
shawti.  Triplett,  23  Mo.  213. 

■*  Turner  v.  Leach,  4  B.  &  Aid.  451 ;  Harrison i?.  Ruscoe,  15  L.  J.  Exch. 
110;  15  M.  &  W.  231;  Rowe  v.  Tipper,  13  C.  B.  249. 

5  Jennings  v.  Roberts,  24  L.  J.  Q.  B.  102;  Thompson  on  Bills,  358. 

581 


§    33(5  NOTICE    OF    DISHONOR.  [CH.   XVII 

On  the  other  haud,  if  the  holder  has  notitied  all  the  in- 
dorsers,  the  notices  will  enure  to  the  benefit  of  any  one  of 
the  indorsers,  who  is  compelled  to  pay  the  bill  or  note,  and 
he  may  hold  any  prior  indorser  lia})]e,  provided  the  notice, 
sent  to  him  by  the  holder,  actually  reaches  him.^  But  if 
this  notice  did  not  reach  the  first  or  other  intermediate  in- 
dorser, it  has  been  held,"  although  contrary  to  high  au- 
thority-,^ that  the  intermediate  indorser  must  have  sent 
out  a  notice  himself,  in  order  to  hold  the  prior  indorser 
liable. 

It  has  also  been  held  that  the  acceptor  of  a  bill  and  the 
maker  of  a  note  may  give  the  notice.*  But  this  has  been 
denied  to  be  a  sufficient  notice,  unless  the  holder  had  con- 
stituted the  acceptor  or  maker  his  agent  for  the  purpose  of 
giving  the  notice.^  One  who  holds  the  paper  as  collateral 
security  for  a  debt,  may  and  should  give  notice;^  and  so, 
also,  may  one  who  accepts  or  pays  supra  protest? 

If  the  holder  be  dead,  his  personal  representative  should 
give  the  notice,  if  there  be  one ;  if  no  representative  has  yet 
been  appointed,  the  notice  must  be  given  by  the  represent- 
ative within  a  reasonable  time  after  his  appointment.^ 

§  330.  To  whom  notice  should  he  given. — The  notice 
must  in  general  be  given  to  every  person  secondarily  liable, 

1  Stafford  t?.  Yates,  18  Johns.  327. 

2  Beale  v.  Parrish,  20  N.  Y.  407,  overruling  24  Barb.  243. 

3  1  Parsons'  N.  &  B.  G27;  Thompson  on  Bills,  327. 

*  Shaw  V.  Craft,  Chitty  on  Bills,  333;  Kosher  v.  Kiennan,  4  Camp.  87-, 
Glascow  V.  Pratte,  8  Mo.  33G;  First  Nat.  Bank  v.  Kyerson,  23  Iowa,  508; 
Brailsford  v.  Williams,  15  Md.  157;  Chapman  v.  Keene,  3  Ad.  &  El.  193 
(30  E.  C.  L.  R.  C9),  overruling  Tindall  v.  Brown,  1  T.  R.  167. 

5  1  Parsons'  N.  &B.o05;  Parke,  B.,  in  Harrison  v.  Ruscoe,  15  M.  &  W. 
531;  Ex  parte  Barclay,  7  Ves.  597;  Tindall  v.  Brown,  1  T.  R.  167;  Stewart 
i;.  Kennett,  2  Camp.  177. 

6  Peacock  v.  Parcell,  14  C.  B.  (x.  s.)  (108  E.  C.  L.  R.)  728. 

'  Konig  V.  Bayard,  1  Pet.  262;  Martin  v.  Ingersoll,  8  Pick.  1. 
8  White  V.  Stoddard,  11  Gray,  38;  1  Parsons'  N.  &  B.  444,  559 
582 


CH.  XVII.]  NOTICE   OF    DISHONOR.  §    336 

such  as  drawers  and  indorsers,^  whom  the  holder  wishes  to 
hold  liable.  And  where  he  has  not  notified  all  of  thera, 
those  who  are  notified  must  for  their  own  protection  give 
notice  to  the  other  prior  indorsers,^  Notice  must  be  given 
to  indorsers,  even  though  they  have  indorsed  simply  for 
the  purpose  of  collection  of  the  paper;  as,  for  example, 
where  the  holder  puts  his  commercial  paper  in  a  bank  for 
collection  at  a  distance,  and  the  bank  of  deposit  sends  the 
paper  to  its  banking  correspondent  at  the  place  of  residence 
of  the  acceptor  or  maker,  or  at  the  place  of  payment,  if  one 
be  specified.  Notice  must  be  sent  to  the  bank  of  deposit 
as  well  as  to  the  other  indorsers.^  It  is  even  necessary  to 
give  notice  of  dishonor  to  the  indorser  of  overdue  paper  ; 
for  although  the  indorsement  after  maturity  does  not  give 
the  indorser  the  rights  of  bona  fide  holders,  in  respect  to 
the  exclusion  of  equitable  defenses,  overdue  paper  is  still 
negotiable,  and  in  order  that  the  indorser  may  be  held 
liable,  there  must  be  a  demand  and  notice  of  dishonor.* 

1  See  post,  chap.  XVIII,  for  the  circumstances  under  which  notice  to 
special  iuclorsers  is  excused. 

2  Brown  v.  Ferguson,  4  Leigh,  37;  Cardwell  v.  Allen,  33  Gratt.  167; 
Stix  V.  Matthews,  63  Mo.  371 ;  see  ante,  §  335. 

3  Clode  V.  Bailey,  12  L.  J.  Exch.  17;  12  M.  &W.  51;  Scott  v.  Lifford,  9 
East,  347;  McNeal  u.Wyatt,  3  Humph.  125;  Butler  v.  Duval,  4  Yerg.265, 

4  See  ante,  §269;  Coltu.  Barnard,  12  Pick.  260;  Light  v.  Kingsbury, 
50  Mo.  331 ;  Hart  v.  Eastman,  7  Minn,  74;  Jones  v.  Middleton,  29  Iowa- 
188;  McEwer  v.  Kirtland,  33  Iowa,  348;  Blake  v.  McMillen,  33  Iowa 
150;  Pryor  v.  Bowman,  38  Iowa,  92 ;  Bank  of  Red  Oak  v.  Oasis,  40  Iowa. 
332;  Graul  v.   Strutzel,  53  Iowa,  712;  Bishop  v.  Dexter,  2  Conn.  419 
Lockwood  V.  Crawford,  18  Conn.  361 ;  Dwight  v.  Emerson,  2  N.  H.  159 
Leavitt  v.  Putnam,  3  Coms.   494 ;    Berry  v.   Robinson,  9   Johns.  121 
Greeley  v.  Hunt,   21  Me.  455 ;  McKinney  v.  Crawford,  8  Serg.  &  R.  351 
Sawyer  v.   Brownell,  13  R.  I.  141 ;  Atwood  v.  Hazelton,  3  Bailey,  457 
Course  v.  Shackleford,   2  Nott  &  McC.  283;  Fell  v.  Dial,  14  S.  C.  247 
Bemis  v.  McKenzie,  13  Ela.  557;  Branch  Bank  v.  McGafErey,  9  Ala.  153 
Adams  v.  Torbert,  6  Ala.  865;  Swartz  v.  Redfield,  13  Kan.  550;  Shelby  v. 
Judd,  24  Kan.  161;  Duffy  v.  O'Connor,  7  Baxt.  498;  Beebe  v  Brooks,  12 
Cal.   308;  Thompson  v.  Williams,  14  Cal.  162.     But  see  Gray  u.  Bell,  3 
Rich.  71. 

583 


§    o3()  XOTICR    OF    DISHONOR.  [CII.   XVII. 

But  if  there  luis  been  default  of  payment,  in  consequence  of 
which  one  of  the  indorsers  paid  and  took  up  the  paper,  and 
subsequently  negotiated  it,  the  purchaser  would  get  the 
transferring  indorsor's  claims  against  the  prior  indorsers 
and  the  drawer,  if  they  have  been  notified  of  the  dishonor, 
according  to  the  law  ;  and  the  parties,  including  the  trans- 
ferring indorser,  would  be  bound  to  this  purchaser  without 
any  other  demanjj^  or  notice.^ 

If  there  are  two  or  more  joint  indorsers,  notice  must  be 
sent  to  each  of  them,^  unless  they  are  partners,  when  notice 
to  one  will  be  sufficient  to  bind  the  others.^  But  if  one  of 
the  partners  lives  at  the  place  of  protest,  and  the  others  re- 
side elsewhere,  or  are  temporarily  absent,  the  notice  must 
be  given  to  the  resident  partner.*  And  if  one  of  the  part- 
ners dies  before  maturity  of  the  paper,  notice  should  be 
sent  to  the  survivor.^ 

Notice  may  also  be  given  to  the  agent  of  the  drawer  or 
indorser,  if  he  be  authorized  expressly  or  by  custom  of  busi- 

1  St.  John  V.  Roberts,  31  N.  Y.  441;  Scott  v.  First  Nat.  Bank,  71  Ind. 
467;  Libby  v.  Pierce,  47  N.  H.  314;  Montgomery  R.  R.  Co.  v.  Trebles,  44 
Ala.  258;  Williams.'!;.  Matthews,  3  Cow.  252. 

2  Union  Bank  v.  Willis,  8  Met.  512;  Sliepard  v.  Hawley,  1  Conn.  368; 
Hubbard  v .  Matthews,  54  N.  Y .  50 ;  Willis  v.  Green,  5  Hill,  232 ;  Bank  of 
Chenango  v.  Root,  4  Cow.  126;  Bealls  v.  Peck,  12  Barb.  245;  Bank  of 
United  States  v.  Beirne,  1  Gratt.  234;  People's  Bank  r.  Keech,  26  Md. 
521;  Dabney  v.  Stidger,  4  Smed.  &  M.  749;  Boyd  ^^  Orton,  16  Wis.  495; 
State  Bank  v.  Slaughter,  7  Blackf.  133;  Miser  v.  Trooinger,  7  Ohio  St. 
238;  Sayre  v.  Frick,  7  W.  &  S.  383;  Wood  v.  Wood,  1  Har.  429.  But  see 
Dodge  V.  Bank  of  Kentucky,  2  A.  K.  Marsh.  510;  Higgins  v.  Morrison, 
4  Dana,  100. 

3  Gowan  v.  Jackson,  20  Johns.  176;  People's  Bank  v.  Keech,  26  Md. 
521;  Rhett  v.  Pole,  2  How.  457.  This  is  true,  even  after  the  dissolution 
of  the  firm.  Hubbard  v.  Matthews,  54  N.  Y.  50;  Fourth  Nat.  Bank  v. 
Henschen,  52  Mo.  207;  Slocum  v.  Lizardi,  21  La.  Ann.  355;  Brown  w. 
Turner,  15  Ala.  (n.  s.)  832;  Coster  v.  Thoraason,  19  Ala.  (n.s.)  717. 

*  Hubbard  v.  Matthews,  54  N.  Y.  50;  Hume  v.  Watt,  5  Kan.  34. 
5  Hubbard?;.  Matthews,  54  N.  Y.  50;  Slocumb  v.  Lizardi,  21  La.  Ann. 
355. 

584 


€H.   XVir,]  NOTICE    OF    DISHONOR.  §    336 

ness  to  receive  such  notices.^  An  agent,  having  a  general 
authority  to  transact  business  in  the  name  of  his  principal, 
may  receive  notice  of  dishonor  for  him.^  An  attorney  at 
law  or  solicitor  cannot,  unless  expressly  authorized.^  And 
even  the  agent,  who  had  written  the  indorsement  for  the 
principal,  and  in  his  name,  may  not  be  authorized  to  re- 
ceive notice  of  dishonor.  In  any  such  case,  the  notice 
should  be  addressed  to  the  principal.*  But  if  an  agent 
draws  or  indorses  a  commercial  instrument  in  his  own 
name,  the  notice  should  at  all  events  be  sent  to  the  agent.® 

If  the  drawer  or  indorser  be  bankrupt,  notice  should  be 
given  to  the  assignee,  if  there  be  one,  particularly  if  the 
party  has  absconded  ;^  although  it  might  be  sufficient  to  give 
the  notice  to  the  party,  notwithstanding  the  appointment 
of  an  assignee.^  But  if  there  be  no  assignee,  notice  must 
be  given  to  the  party  himself,  or  in  his  absence  to  any  one 
representing  him  or  his  estate.^ 

If  the  party  be  dead,  and  the  holder  is  ignorant  of  his 
death,  a  notice  addressed  to  the  deceased  is  sufficient.^  But 
if  his  death  is  known  to  the  holder,  and  a  personal  repre- 
sentative has  been  appointed  or  has  qualified,  then  the 
notice  should  be  addressed  to  his  personal  representative  by 

• 

1  Louisiana  St.  Bank -y.  Ellery,  16  Mart.  (La.)  87;  Cross  v.  Smith,  1 
N.  &  Sel.  545. 

2  Wilkius  V.  Commercial  Bank,  6  How.  (Miss.)  217;  Cross  v.  Smith,  1 
M.  &  Sel.  545;  Fassin  v.  Hubbard,  55  N.  Y.  471. 

3  Louisiana  State  Bankw.  Ellery,  16  Mart.  (La.)  87;  Cross  v.  Smith,  1 
M.  &Sel*540. 

<  Clay  V.  Oakley,  17  Mart.  (La.)  137;  Valk  v.  Gaillard,  4  Strob.  99; 
New  York,  etc.,  Co.  v.  Selma  Sav.  Bank,  51  Ala.  305;  Wilcox  u.-Routh,  9 
Smed.  &  M.  476. 

5  Grosvenor  v.  Stone,  8  Pick.  79. 

6  Rhode  V.  Proctor,  4  B.  &  C.  517;  6  Dow.  &  R.  610. 
">  1  Parsons'  N.  &  B.  500. 

8  Es  parte  Moline,  19  Ves.  216;  Rhode  v.  Proctor,  4  B.  &  C.  517;  6 
Dow.  &  R.  610. 

'  Barnes  v.  Reynolds,  4  How.  (Miss.)  114;  Mespero  v.  Pedesclaux,  22 
La.  Ann.  •121. 

585 


§    337  NOTICE    OF    DISHONOR.  [CH.   XVII. 

name,  if  he  and  his  address  can  be  ascertained  by  reason- 
able inquiry.  No  other  notice  will  suffice.^  If  there  be 
no  personal  representative,  then  the  notice  may  be  sent  to 
the  family  residence  of  the  deceased,'' or  addressed  "  to  the 
legal  representative  "  of  the  decea.sed.^  A  notice,  left  at 
the  deceased's  residence  with  his  son-in-law,  has  been  held 
to  be  sufficient,  if  there  were  no  representative.*  But  a 
notice,  addressed  to  one,  who  was  expected  to  be  appointed 
administrator,  before  his  appointment,  would  be  insufficient ; 
since  before  his  appointment  he  was  under  no  obligation  to 
do  anything  for  the  protection  of  the  estate.^  If  a  notice 
has  been  sent  to  a  proper  person  before  the  appointment  of 
a  personal  representative,  it  will  not  be  necessary  to  send 
a  second  notice.®  But  if  there  has  been  any  defect  in  the 
previous  sending  of  the  notice,  its  actual  reception  by  the 
personal  representative  within  a  reasonable  time  will  cure 
such  defects.' 

§  337.  The  time  allowed  for  giving  notice. —  It  is  nec- 
essary that  the  notice   be  given  after  the  paper  has  been 

1  Goodnow  V.  Warren,  122  Mass.  79;  Oriental  Bank  v.  Blake,  22  Pick. 
200;  Cayuga  Co.  Bank  v.  Bennett,  5  Hill,  236;  Smalley  v.  Wright,  40  N. 
J.  471;  Barnes  v.  Reynold,  4  How.  (Miss.)  114;  1  Parsons'  N.  &  B.  501, 
502.  If  there  be  more  than  one  personal  representative,  notice  to  one 
will  be  sufficient.  Bealls  u.  Peck,  12  Barb.  245;  Carolina  Nat.  Bank  v. 
Wallace,  13  S.  C.  347;  Lewis  v.  Bakewell,  6  La.  Ann.  359. 

2  Stewart  v.  Eden,  2  Caines,  121;  Merchants'  Bank'u.  Birch,  17  Johns. 
25;  Goodnow  v.  Warren,  122  Mass.  82;  Linderman  v.  Guldin,  34  Pa.  St.  64. 

3  Boyd's  Admr.  v.  City  Sav.  Bank,  15  Gratt.  501;  Planters'  Bank  v. 
"White,  2  Humph.  112;  Pillow  v.  Hardeman,  3  Humph.  538.  B\it  it  would 
not  be  sufficient,  if  the  notice  were  addressed  to  "the  estate"  of  the 
deceased,  for  that  term  is  equally  applicable  to  the  heirs-at-law, 
Massachusetts  Bank  v.  Oliver,  10  Cush.  557;  Cayuga  Bank  v,  Bennett,  5 
Hill,  236. 

<  Weaver  v.  Penn,  27  La.  Ann.  129. 
«  Mathewson  v.  Strafford  Bank,  45  N.  H.  104. 
*  Merchants'  Bank  v.  Birch,  17  Johns.  25. 

'  Cayuga  Co.  Bank  v.  Bennett,  5  Hill,  236;  Maspero  v.  Pedesclaux,  22 
La.  Ann.  227;  1  Parsons' N.  &  B.  502. 
586 


CH.  XVII.]  NOTICE    OF    DISHONOR.  §    337 

dishonored.     Notice,  issued    in  anticipation  of    dishonor, 
is  insufficient.^ 

The  older  authorities  state  that  the  notice  must  be  given 
'*  within  a  reasonable  time  "after  the  dishonor. ^  But  the 
present  rule  of  the  law  merchant  is  that  the  holder  has  un- 
til the  expiration  of  the  next  day  after  dishonor,  in  which 
to  give  notice,  subject  to  certain  modifications,  necessary 
in  the  cases  where  the  notices  have  to  be  sent  away  from 
the  place  of  protest.  Where  the  party  entitled  to  notice  re- 
sides in  the  place  of  protest,  the  notice  may  be  sent  to  him 
at  his  residence  at  any  time  during  the  day  following  the 
dishonor  of  the  paper  before  the  hours  of  rest.  But  if  he 
is  to  leave  the  notice  at  the  party's  place  of  business,  it 
must  be  left  during:  business  hours. ^  Where  the  notice  is 
to  be  sent  to  one  resident  elsewhere,  the  holder  has  until 
the  last  mail  of  the  day  after  dishonor  is  made  up ;  pro- 
vided the  mail  on  that  day  does  not  leave  at  an  unreasonable 
hour.  If  it  leaves  at  an  unreasonable  hour,  the  holder  has 
until  the  next  mail  to  send  out  his  notices.* 

1  Jackson  v.  Richards,  2  Cairnes,  343;  Chitty   on  Bills,  [*482]  544. 

2  Story  on  Bills,  §  285;  Chitty  on  Bills,  366;  1   Parsons'  N.  &  B.  507. 
5  Allen  V.  Edmundson,  2  C.  &  K.  547;  Adams  v.  Wright,  14  Wis.  408 

Jameson  w,  Swinton,  2  Taunt.  224;  Crosse  v.  Smith,  1  Maule  &  S.  545 
Garnettw.  Woodcock,  6  Maule,  &  S.  44;  Parker  v.  Gordon,  7  East,  385 
Cayuga  Co.  Bank  v.  Hunt,  2  Hill,  635. 

*  Lenox  v.  Roberts,  2  Wheat.  373 ;  United  States  v.  Barker,  12  Wheat. 
559;  4  Wash.  4G5;  Fullerton  v.  Bank  of  U.  S.,  1  Pet.  605;  Bank  of  Alex- 
andria V.  Swan,  9  Pet.  33;  Haskell  v.  Boardman,  8  Allen,  40;  Haynes  v. 
Birks,  3  Bos.  &  P.  599;  Chick  v.  Pillsbury,  24  Me.  458;  Hartford  Bank  v. 
Stedman,  3  Conn.  489;  Mitchell  w.  Cross,  2  R.  I.  437;  Carter  v.  Burley, 
9N.  H.  558;  Farmers'  Bank  v.  Duvall,  7  Gill  &  J.  78;  Eagle  Bank  ». 
Chapiu,  3  Pick.  180;  Lawson  v.  Farmers'  Bank,  1  Ohio  St.  206;  Downs 
V.  Planters'  Bank,  I  Smed.  &  M.  261;  Wemple  v.  Dangerfield,  2  Smed.  & 
M.  445;  Burgess  v.  Vreeland,  4  N.  J.  71;  Sussex  Bank  v.  Baldwin,  2 
Har.  487;  Howard  ■!?.  Ivee,  1  Hill,  2G3;  Manchester  Bank  v.  Fellows,  8 
Fost.  302;  1  Parsons'  N.  &  B.  511;  Chitty  on  Bills,  [*486]  548;  Darbishire 
V.  Parker,  6  East,  3.  But  see  Story  on  Bills  (Bennett's  ed.),  §  290,  note 
1,  where  it  is  urged  that  the  holder  should  be  allowed  the  whole  of  the 
next  day  after  dishonor  in  which  to  give  his  notices. 

587 


§    387  NOTIQK    OF    DISHONOR.  [CH.   XVII. 

What  shall  be  considered  a  reasonable  hour  for  the  de- 
parture of  the  mail,  within  the  meaning  of  this  rule,  can- 
not be  stated  with  any  degree  of  accuracy ;  for  it  depends 
in  each  case  upon  the  habits  of  the  community  in  which 
the  protest  was  issued.  Any  hour  before  seven  a.  in.  would 
be  considered  unreasonable.^  Seven  a.  m.  is  doubtful,* 
while  all  other  hours  after  eight,  certainly  after  nine  a.  m., 
are  considered  reasonable;  and  if  there  be  no  later  mail, 
the  notice  should  be  sent  out  by  the  mail  leaving  at  such  an 
hour,  in  order  to  hold  drawer  and  indorsers.^  It  must  be 
remembered,  however,  if  there  is  more  than  one  mail  on 
the  day  after  dishonor,  the  last  mail  will  be  early  enough.* 
In  the  case  of  transmission  of  notices  over  the  seas,  the 
notice  must  be  sent  by  the  next  regular  mail  ship.^ 

Each  indorser  has  the  same  length  of  time  after  receiving 
notice  of  dishonor,  in  which  to  notify  the  parties  whom  he 
wants  to  hold  liable,  as  the  holder  of  the  paper  has  ;^  and  ex- 

1  Gaill  V.  Jeremy,  1  M.  &  M.  61;  Mitchell  v.  Cross,  2  R.  I.  437;  Wem- 
ple  V.  Dangerfield,  2Smed.  &  M.  445;  West  v.  Brown,  6  Ohio  St.  542; 
Davis  V.  Hanly,  7  Eng.  (Ark.)  645;  Commercial  Bank  v.  King,  3  Rob. 
(La.)  243;  Chick  v.  Pillsbury,  24  Me.  458;  Derainds  u.  liirkman,  1  Smed. 
&M.  644. 

2  Held  reasonable  in  Stephenson  V.  Dickson,  24  Pa.  St.  148;  unreason- 
able in  Chicks  v.  Pillsbury,  24  Me.  458. 

3  United  States  v.  Barker,  4  Wash.  C.  C.  464;  s.  c.  12  Wheat.  559; 
Haskell  v.  Boardman,  8  Alien,  38;  Lawsou  v.  Farmers'  Bank,  1  Ohio  St. 
206;  Dowues  t?.  Planters'  Bank,  1  Smed.  &  M.  261.  But  see  Burgess 
V.  Vreeland,  4  N.  J.  71 ;  Smith  v.  Paillorn,  22  Hun,  832;  Hawkes  v.  Salter, 
4Bing.  (13  E.  C.  L.  R.)  715,  in  -n-hich  nine  a.  m.,  and  half  past  nine  a. 
mc  were  considered  too  early. 

*  Martin  v.  Ingersoll,  8  Pick.  1 ;  Stephenson  v.  Dickson,  24  Pa.  St. 
148;  Lindo  V.  Unsworth,  2  Camp.  602. 

s  Lenox  v.  Leverctt,  10  Mass.  1 ;  Stainback  v.  Bank  of  Va.,  11  Gratt. 
260;  Muilman  v.  D'Equino,  2  H.  Bl.  565;  Darbishire  v.  Parker,  6 
East,  3. 

«  Shelburne  Falls  Nat.  Bank  v.  Towuslcy,  102  Mass.  177;  107  Mass. 
444;  Jameson  ■y.  Swinton,  2  Taunt.  224;  Lowe  v.  Tipper,  13  C.  B.  249; 
Simpson  V.  Turney,  5  Humph.  419;  Seaton  r.  Scoville,  18  Kan.  435; 
Geill  V.  Jeremy,  1  M.&  M.  61 ;  Lawson  v.  P'armers'  Bank,  1  Ohio  St.  206; 

588 


CH.  XVII.]  NOTICE    OF    DISHONOR.  §    337 

cessive  diligeiice  on  the  part  of  one  party  will  not  make  up 
for  the  delay  or  negligence  of  another  party.  Each  party 
must  send  out  his  notices  within  the  required  time  after  re- 
ceiving notice,  in  order  to  hold  the  indorsers  prior  to  him  ; 
and  these  prior  indorsers  will  be  discharged  by  any  delay 
or  negligence  of  the  intermediate  indorser  in  sending  out  his 
notices,  although  the  notices  reach  the  prior  indorsers 
within  the  usual  time  after  dishonor,  on  account  of  the  un- 
usual promptness  of  the  holder  in  sending  out  his  notices. ^ 

If  the  next  day  is  a  legal  holiday,  the  holder  or  indorser 
has  until  the  next  business  day  to  send  out  his  notices. ^ 
But  while  he  is  not  obliged  to  give  notice  of  dishonor  on  a 
legal  holiday,  he  may  do  so,  and  the  notice  will  not  be  in- 
valid, except  possibly  on  Sunday.^ 

It  is  to  be  observed,  however,  that  the  holder  or  indorser 
need  not  wait  until  the  expiration  of  the  time,  allowed  them 
by  law,  to  give  the  notice.  And  the  holder  may  issue  the 
notice  of  dishonor  before  the  expiration  of  the  day  of  dis- 
honor if  there  has  been  early  in  the  day  a  proper  repre- 
sentment  and  demand  for  payment  of  acceptance.* 

Bray  v.  Hadwen,  5  Maule  *  S.  68;  1  Parsous'  N.  &  B.  513;  Story  ou  Bills, 
§  291;  Thomson  ou  Bills,  348. 

1  Brown  ■;;.  Ferguson,  4  Leigh,  37;  Turner  v.  Leach,  4  B.  &  Aid.  451; 
Kennedy  v.  Goddes,  8  Port  (Ala.)  263;  Mitchell  v.  Cross,  2  R.  I.  439; 
Am.  Life  Ins.  Co.  v.  Emerson,  4  Smed.  &  M.  177;  Etting  v.  Schuylkill 
Bank,  2  Barr.  355;  Smith  v.  Roach,  7  B.  Mon.  17;  Stix  u.  Mathews,  63 
Mo.  371;  Eitchburg  Bank  v.  Perley,  2  Allen,  433;  Carter  v.  Burley,  9  N. 
H.  558;  Manchester  Bank  v.  Fellows,  28  N.  H.  302;  Simpson  v.  Turney, 
5  Humph. ^419. 

2  Cuyier  u.  Stevens,  4  "Wend.  5u6;  Lindo  v.  Unsworth,  2  Camp.  602; 
Howard  v.  Ives,  1  Hill,  283;  Friend  v.  "Williamson,  9  Gratt.  31 ;  Martin  v. 
Ingersoll,  8  Pick  1.  And  if  notice  is  received  by  an  indorsee  on  Sun- 
day, since  he  is  not  obliged  to  open  his  mail  until  Monday,  he  has  until 
Tuesday  to  send  out  his  notices.  "Wright  v.  Shawcross,  2  B.  &  Aid. 
501;  Bray  v.  Hadwen,  5  Maule  &  Sel.  68;  Haynes  v.  Bicks,  3  Bos.  &  P. 
599;  Chittyon  Bills  (13  Am.  ed.),   [*488]  551:  1  Parsons'  N.  &.  B.  515. 

3  Deblieux  v.  Bullard,  1  Rob.  66. 

*  Bank  of  Alexandria  r.  Swan,  9  Pet.  33;  Lenox  v.  Roberts,  2  Wheat. 

f)8I) 


§    339  NOTICE    OF    DISHONOR.  [CH.  XVII. 

§  338.   Mode    of   giving  notice,  when  important. — If 

the  party  to  whom  the  notice  is  sent  actually  receives  the 
notice,  it  is  of  no  consequence  how  it  was  transmitted. 
The  actual  receipt  of  the  notice  in  due  season  cures  all 
defects.  The  mode  of  giving  the  notice  is  only  of  value, 
when  the  party  for  whom  it  was  intended  does  not  receive 
the  notice.^ 

§  339.  Mode  of  giving  notice  when  parties  reside  in 
same  place.  — Where  the  parties  reside  in  the  same  place, 
the  law  merchant  now  generally  requires  —  it  was  formerly 
a  universal  requirement,  —  that  the  notice  should  be  served 
personally.  Notice  sent  by  mail  is,  according  to  this  rule, 
insufficient,  unless  it  be  actually  received.^  The  rule  is  also 
the  same,  where  the  parties  secondarily  liable  reside  at  the 
place  of  payment  and  protest,  and  the  holder  resides  else- 

373;  Bussard  v.  Levering,  6  Wheat.  102;  Lindenberger  v.  Beall,  6 
Wheat.  104 ;  Corp  v.  McComb,  1  Johns.  Cas.  328 ;  Curry  v.  Bank  of  Mobile, 
8  Port.  (Ala.)  ;  3G0  Coleman  v.  Carpenter,  9  Pa.  St.  178;  Smith  v.  Little, 
ION.  IL  526 ;  McClane  v.  Fitch,  4  B.  Mon.  599;  Haslett  v.  Ehrick,  1  Nott 
&McC.  IIG;  Price  v.  Young,  I  McCord,  339;  Lawsonu.  Farmers'  Bank,  1 
Ohio  St.  20C;  King  v.  Crowell,  Gl  Me.  244;  {lartley  v.  Case,  1  C.  &  P. 
55G;  Leftly  v.  Mills,  4  T.  R.  170;  Colkctt  v.  Freeman,  2  T.  R.  59;  Haynes 
V.  BirlvS,  3  Bos.  &  P.  602;  Clowes  v.  Chaldecott,  7  L.J.  K.  B.  147; 
Ex  parte  Moline,  19  Ves.  216;  Hiue  v.  Allely,  4  B.  &  Ad.  624;  1  Nev.  &  M. 
433;  Burbridge  v.  Manners,  2  Camp.  195;  Chittyon  Bills,    [*482]  544. 

1  Bank  of  United  States  v.  Corcoran,  2  Pet.  121 ;  Carolina  Nat.  Bank 
V.Wallace,  13  S.  C.  347;  Manchester  Bank  v.  Fellows,  28  N.  H.  302; 
Bradley  v.  Davis, 26  Me.  45;  Shelburne  Nat.  Bank  v.Townsley,  107  Mass. 
444;  First  Nat.  Bank  v.  Wood,  51  Vt.  473;  Foster  v.  McDonald,  5  Ala. 
376;  Dicken  v.  Hall,  87  Pa.  St.  379 ;  Whiteford  v.  Burckmeyer,  1  Gill, 
127;  Cabot  Bank  v.  Warner,  10  Allen,  521;  Hyslop  v.  Jones,  3  McLean, 
69;  Gilchrist  v.  Downell,  53  Mo.  591;  Cayuga  Co.  Bank  v.  Bennett,  5 
Hill,  236;  Maspero  v.  Pedesclaux,  22  La.  Ann.  227. 

2  Bussard  v.  Levering,  6  Wheat.  104;  Williams  v.  Bank  of  United 
States,  2  Pet.  96;  Bowling  v.  Harrison,  6  How.  248;  Pierce  v.  Pcndar,  5 
Met.  352;  Shelburne  Falls  Nat.  Bank  v.  Townsley,  102  Mass.  177;  Davis 
V.  Gowen,  19  Me.  447;  Vance  v.  Collins,  6  Cal.  535;  Boyd  v.  City  Sav. 
Bank,  15  Gratt.  501;  Koch  ■;;.  Bringer,  19  La.  Ann.  183;  Jolm  v.  City  Nat. 
Bank,  62  Ala.  529;  Cabot  Bank  v.  Warner,  10  Allen,  524. 

590 


CH.  XVII.]  NOTICE    OF    DISHONOR.  §    339 

where.  A  notice  sent  by  mail  from  the  holder's  domicile 
would  be  insufficient.  It  must  be  served  personally  at  the 
place  of  protest.^  But  all  rules  of  the  law  merchant  are  sub- 
ject to  change  by  the  local  customs  of  business  communities  ; 
and  if  it  is  the  usage  of  a  bank  to  transmit  notices  by  the 
mail,  all  parties  having  dealings  with  the  bank  will  be  bound 
by  the  usage,  if  it  is  clear,  definite  and  notorious. ^  So,  also, 
where  the  place  of  payment  and  protest  is  a  large  city,  in 
which  the  letters  and  other  mail  are  delivered  by  carriers 
at  the  residences  or  places  of  business  to  which  they  are 
addressed;  the  courts  very  generally  hold  that  the  mail  will 
in  such  cases  be  a  proper  medium  of  transmitting  notices 
of  dishonor,  on  the  ground  that  there  is  then  a  personal 
service,  instead  of  a  mere  deposit  of  notice  in  the  post- 
office.  In  some  of  the  States,  statutes  have  been  passed, 
authorizing  the  transmission  of  notice  by  the  mail  in  such 
cases,  but  a  statute  is  not  believed  to  be  necessary  to  the 
adoption  of  this  exception  to  the  general  rule  above  stated.^ 
But  when  the  post-office  and  the  letter  carrier  are  used  for 
the  transmission  of  the  notice,  it  must  be  shown  that  the 
notice  was  deposited  in  the  post-office  sufficiently  early  to 
enable  it  to  be  delivered  by  the  letter  carrier  on  the  day 
when  the  party  was  entitled  to  receive  notice  of  dishonor.* 

1  Bowling  V.  Harrison,  6  How.  248;  Baulj  v.  Slaugliter,  7  Blaclcf.  133. 
But  see  contra  Giudrat  v.  Mechanics'  Bank,  7  Ala.  324;  Greene  v.  Farley, 
20  Ala.  324;  Tyson  v.  Oliver,  43  Ala.  608;  Philipe  v.  Harberlee,  45  Ala.  608. 

2  Bowling  V.  Harrison,  6  How.  248;  Cliicosee  Bank  v.  Eager,  9  Mete. 
583;  Thorn  v.  Rice,  15  Me.  263;  Gindrat  v.  Meclianics'  Bank,  7  Ala.  324; 
Carolina  Nat.  Bank  v.  Wallace,  13  S.  C.  347. 

•^  Shoemakers.  Mechanics'  Bank,  59  Pa.  St.  83;  Walters  v.  Brown,  15 
Md.  292;  Eagle  Bankw.  Hathaway,  5  Mete.  212;  3  Kent's  Cora.  107;  1  Par- 
sons' N.  &  B.  481;  1  Am.  Lead.  Cas.  403;  Thompson  on  Bills,  339.  But 
where  the  statutes  substitute  mailing  for  personal  service,  whether  there 
is  a  postal  delivery  or  not,  it  is  probable  that  the  statute  is  necessary  to 
change  the  rule  of  the  law  merchant,  in  the  absence  of  postal  delivery. 

•»  Dobree  v.  Eastwood,  3  C.  &  P.  250;  Smith  v.  Mullett,  3  Camp.  208; 
Walters  v.  Brown,  15  Md.  292. 

591 


§    340  NOTICE    OF    DISHONOR.  [CH.  XVII. 

And  it  would  also  seem  to  be  necessary,  if  the  notice  was 
addressed  to  the  party's  place  of  business,  that  it  should 
be  received  by  j^ostal  delivery  during  business  hours  on  the 
proper  day.  But  there  does  not  appear  to  have  been  any 
adjudication  on  this  point. 

It  has  also  been  held  that,  where  the  parties  reside  in 
some  other  than  the  phice  of  protest,  one  party,  who  has 
l)reviously  received  notice  of  dishonor,  may  notify  the 
other  by  mail,  although  residing  in  the  same  place,  pro- 
vided the  notice  has  been  mailed  with  such  dispatch,  that 
the  party  for  whom  it  was  intended  received  it  as  early  as  if 
it  had  been  addressed  to  him  from  the  place  of  protest.^ 

§  340.  How  and  where  personal  notice  must  be  served. 

Where  personal  service  is  required,  and  notice  by  mail  dis- 
allowed, the  notice  must  be  sent  to  the  party  either  at  his 
residence  or  at  his  place  of  business.  The  delivery  of  no- 
tice at  either  place  will  be  sufficient.^  Where  one  has 
a  settled  place  of  business,  it  is  customary  to  deliver 
the  notice  there  during  business  hours  instead  of  at  the  resi- 
dence. And  failure  to  find  at  the  place  of  business  the 
party  or  some  agent  with  whom  the  notice  may  be  left,  will 
not  necessitate  a  delivery  of  the  notice  at  the  residence. 
The  rule   is  the  same  where  the  notice  was  left  at  the  resi- 


1  Shelburue  Falls  Nat.  Bauk  v.  Townsley,  102  Mass.  177;  s.  c.  107 
Mass.  444;  Hartford  Bauk  v.  Stedmau,  3  Conu.  489;  Eagle  Bauku.  Hath- 
away, 5  Mete.  213;  Manchester  Bauk  v.  Fellows,  28  N.  H.  313;  Van 
Brunt  V.  Vaughan,  47  Iowa,  145;  Timras  v.  D'elisle,  5  Blackf.  447;  Foster 
V.  McDonald,  8  Ala.  376;  "Warner  v.  Gilraan,  17  Me.  360.  But  see 
McCrummeu  v.  McCruramen,  17  Mart.  (La.)  158;  Patrick  v.  Beasley,  6 
How.  (Miss.)  609. 

2  Bank  of  Columbia  i-.  Lawrence,  1  Pet.  578;  Williams  v.  Bank  of 
United  States,  2  Pet.  96;  Ireland  v.  Kip,  10  Johns.  491 ;  Van  Vechten  v. 
Prnyn,  3  Kern.  549;  Nevins  v.  Bank,  10  Mich.  547;  Sandersons.  Rein- 
stadler,  31  Mo.  483;  Grinman  r.  Walker,  9  Iowa,  426;  Bank  of  Geneva  v. 
Hewlett,  4  Wend.  328;  Donncr  v.  Rcmer,  21  Wend.  10. 

592 


CH.  XVII.]  NOTICE    OF    DISHONOR.  §    340 

denee.^  And  if  the  party  has  two  or  more  places  of  busi- 
ness in  the  same  town,  the  notice  may  be  sent  to  either 
place. 2 

But  a  room  or  building,  where  the  party  is  in  the  habit 
of  resorting,  but  where  he  carries  on  no  business,  cannot 
be  called  his  place  of  business,  not  even  where  he  occupied 
such  a  room  for  the  purpose  of  settling  up  his  former  busi- 
ness.^ And  where  there  is  more  than  one  office  in  the  same 
building,  the  notice  must  be  left  in  the  particular  office  in 
which  the  party  transacts  his  business.* 

When  the  party  cannot  be  found  at  the  place  of  business 
or  residence,  where  it  is  proposed  to  leave  a  notice  of  dis- 
honor, the  notice  may  be  left  with  any  clerk  or  agent,  who 
seems  to  have  the  place  in  his  charge.  And  it  would  not 
be  necessary  to  show  with  whom  it  was  left.  The  charac- 
ter of  the  person  who  receives  the  notice  is  of  no  conse- 
quence, if  it  has  been  left  at  the  right  place. ^  If  no  one 
can  be  found  at  the  party's  place  of  business  or  residence, 
with  whom  the  notice  may  be  left,  it  will  be  sufficient  to  put 

1  Lord  V.  Appleton,  15  Me.  579;  Howe  v.  Bradley,  19  Me.  35;  John  v. 
City  Nat.  Bauk,  62  Ala.  529;  Joliu  v.  Selma  Bank,  57  Ala.  96;  Crosse  v. 
Smith,  1  Maule  &  Sel.  545;  Goldsmith  v.  Blane,  1  Maule  &  Sel.  554; 
Bancrofts.  Hale,  Holt,  476;  State  Bank  v.  Heuner,  16  Mart.  (La.)  226; 
Thomson  on  Bills,  337. 

2  Commercial  Bank  v.  Strong,  28  Vt.  316;  Phillips  v.  Aldersou,  5 
Humph.  403.. 

3  Bank  of  Columbia  v.  Lawrence,  1  Pet.  578;  Stephenson  v.  Primrose, 
8  Port.  (Ala.)  155. 

^  Kleinman  v.  Boernstein,  32  Mo.  311;  Bank  of  United  States  v.  Cor- 
coran, 2  Pet.  121. 

^  Jacobs  V.  Iowa,  2  La.  Ann.  964;  Bauk  of  Louisiana  v.  Mansaker,  15 
La.  115;  Merz  v.  Kaiser,  20  La.  Ann.  377;  Mechanics'  Banking  Assn.  v. 
Place,  4  Duer,  212;  Edson  v.  Jacobs,  14  La.  494;  Commercial  Bank  u. 
Gove,  15  La.  113;  Mercantile  Bank  y.  McCartliy,  7  Mo.  App.  318;  Housego 
V.  Crone,  2  M.  &  W.  348;  Cromwell  v.  Hynson,  2  Esp.  511;  Blakely  v. 
Grant,  6  Mass.  386;  Fisher  v.  Evans,  5  Bin.  542.  In  Adams  v.  Wright, 
15  AVis.  408,  the  notice  was  held  to  be  insufficient  where  it  was  left  witli 
a  boy  in  the  yard,  who  said  he  was  the  indorser's  son,  and  who  went 
toward  the  house. 

38  593 


§    341  NOTICE    OF    DISHONOR.  [CH.   XVU. 

it  into  tiic  keyhole  of  the  door,^  and    a  fortiori,   if  it  is 
shoved  under  the  door. 

A  man's  boarding-house  or  hotel  is  his  residence  in  the 
legal  sense.  And  it  will  be  sufficient,  in  the  case  of  a  pri- 
vate boardinjr-house,  if  the  notice  is  left,  in  the  absence  of 
the  party  himself,  with  the  proprietor,  a  servant  of  the 
house,  or  with  a  fellow-boarder.^  But  if  one  lives  at  a  pub- 
lic hotel,  notice  must  be  left,  either  in  his  room,  or  at  his 
room  door,-^  or  with  the  proprietor  or  clerk  in  the  office.* 
In  every  case,  the  person  delivering  the  notice,  must  first 
inquire  for  the  party  for  whom  the  notice  was  intended.^ 

§  341.  Mode  of  serving  notice  when  parties  reside  in 
different  places.  —  When  the  parties  reside  in  different 
places,  it  is  impracticable  in  most  cases,  and  certainly  in- 
convenient, for  personal  service  by  special  agent  to  be  made. 
And  the  law  permits  the  notice  to  be  sent  by  mail.  By  de- 
positing the  notice  in  the  post-office,  addressed  properly  to 
the  right  party,  the  party  sending  the  notice  has  done  all  that 
is  required  of  him  by  the  law,  and  the  drawer  or  indorser  to 
whom  the  notice  was  sent  will  be  held  bound,  although  the 
notice  should  be  lost  in  the  mail.^     If  there  is  any  mistake 

^  Stewart  v.  Eden,  2  Caiues,  121. 

2  Bank  of  United  States  v.  Hatch,  6  Pet.  250,  the  com-t  saying:  "  This 
is  not  like  the  case  of  a  public  inn,  and  a  delivery  to  a  mere  stranger 
who  happens  to  be  there  in  transitu,  and  cannot  be  presumed  to  have 
any  knowledge  or  intercourse  with  the  party.  Boarders'  at  the  same 
house  may  be  presumed  to  meet  daily  and  to  feel  some  iuierest  in  the 
concerns  of  each  other,  and  to  perform  punctually  such  common  duties 
of  life  as  this."  See  to  the  same  effect  McMurtrie  v.  Jones,  3  "Wash. 
C.  C.  206;  Miles  v.  Hall,  12  Smed.  &  M.  332;  Stedman  v.  Gooch,  1  E.sp.  4. 

3  Howe  V.  Bradley,  19  Me.  31. 

4  Danav.  Kemble,  19 Pick.  112;  Bradley  v.  Davis,  26  Me.  45;  Graham 
v.  Saugston,  1  Md.  59. 

'"  Ashley  v.  Gunton,  15  Ark.  415. 

c  Bussard  r.  Levering,  6  Wheat.  102;  Lindenberger  v.Beall,  0  Wheat. 
104;  Miller  v,  Hackley,  5  Johns.  375;  Parker  v.  Gordon,  7  East,  385 ; 
Kuth  V.  Weston,  3  Esp.  54;  Sanderson  v.  Judge,  2  H.  Bl.  509;  Woodcock 
594 


CH.   XVTI.]  NOTICE    OF    DISHOXOR.  §    341 

in  the  address,  the  notice  will  not  suffice,  and  the  party  en- 
titled to  notice  will  be  discharged  unless  the  circumstances 
are  such  as  to  excuse  the  holder  from  sending  the  notice.^ 

Other  means  of  communication  may  be  used,  such  as  the 
telegraph  or  telephone.  But  since  these  means  of  commu- 
nication are  rarely  used  now  for  the  transmission  of  notices 
of  dishonor,  it  is  probable  that  if  the  holder  uses  one  of 
them  instead  of  the  mail,  the  notice  will  not  be  sufficient 
unless  it  has  been  received  by  the  party  to  whom  it  was 
sent  or  by  his  agent. ^ 

So,  also,  may  the  notice  be  sent  by  a  special  messenger, 
instead  of  by  the  mail.  But  if  this  is  done,  in  order  to  hold 
the  parties  secondarily  liable,  the  notices  must  be  delivered 
to  them  at  some  time  on  the  day  when  they  would  have 
been  received  had  they  been  sent  by  mail.'^ 

It  has  been  held  that  where  the  party  to  be  notified  re- 
sides very  far  from  any  post-office,  the  holder  must  send  it 
by  a  special  messenger,  in  order  to  hold  such  a  party.*  But 
this  has  been  very  justly  held  to  be  an  unreasonable  burden 
to  impose  upon  the  holder,  and  that  it  is  more  reasonable 
to  require  the  indorser  or  drawer  to  make  inquiries  at  the 
nearest  post-office,  although  he  may  not  be  in  the  habit  of 
inquiring  for  letters  at  any  post-office.^    Whenever  a  special 

V.  Houldsvvorth,  16  M.  &  W.  126;  Muud  v.  Baldwin,  6  Mass.  316;  Cabot 
Bank  v.  Warner,  10  Allen,  524 ;  Shelburne  Falls  Nat.  Bank  v.  Townsley, 
102  Mass,  ITT;  Friend  v.  Wilkinson,  9  Gratt.  317;  Farmers' Bank  v.  Gur- 
nell,  26  Gratt.  137;  Ellis  v.  Commercial  Bank,  7  How.  (Miss.)  294. 

1  Darcy  v.  Jones,  13  Vroom,  28. 

2  2  Daniel's  Negot.  Inst.,  §  1004;   1  Parsons'  N.  &  B.  487. 

2  Bancrofts.  Hall,  Holt,  476;  Darbishire  u.  Parker,  6  East,  6;  Jarvis 
V.  St.  Croix  Mfg.  Co.,  23  Me.  287:  Doobree  v.  Eastwood,  3  C.  &  P.  (14 
Eug.  C.  L.  R.)  2.50;  Parsons  v.  Crallau,  2  J,  P.  Smith,  404;  Bank  of  Co- 
lumbia r.  Lawrence,  1  Pet.  578;  Van  Vechten  v.  Pruyn,  3  Keim.  549. 

••  Fish  V.  Jackman,  19  Me.  467;  Bedford  v.  Hickman,  1  Yerg.  166; 
Farmers'  Bank  v.  Butler,  3  Lit.  498. 

•'  State  Bank  r.  Avres,  2  Halst.  130;  1  Am.  Lead.  Cas.  403;  Story  on 
Bills,  297. 

595 


§     '642  NOTICE    OF    DISIJOXOK.  [cH.   XVII. 

messeno:;er  is  required,  the  expense  of  sending  one  is 
chargeable  to  the  party  receiving  notice.^ 

§  342:  To  what  post-oflSce  notice  should  be  addressed. — 

If  the  party  to  be  notified  resides  at  one  place  and  has  his 
place  of  business  at  another,  the  notice  may  be  sent  to  the 
post-oflSce  of  either  place ;  unless  it  be  known  that  he  receives 
his  letters  at  one  place,  when  it  must  be  sent  there. ^  But  if 
the  bill  or  note  is  protested  at  a  place  where  the  drawer  or 
indorser  resides,  and  his  place  of  business  is  elsewhere,  the 
notice  must  be  sent  to  him  at  his  residence,  instead  of  being 
addressed  to  him  at  his  place  of  business. -"^  It  is  not  neces- 
sary that  the  post-office,  to  which  the  notice  is  addressed, 
should  be  at  the  domicile  of  the  indorser  or  drawer,  in 
order  that  the  notice  may  be  sufficient.  It  satisfies  the  re- 
quirements of  the  law  merchant,  if  it  be  for  the  time  being 
his  actual  residence.*  And  so,  if  the  party  resides  at  one 
place  for  a  ))art  of  the  year,  and  for  the  rest  of  the  year  at 
another  place,  the  notice  may  be  sent  to  either  place,  pro- 
vided the  holder  does  not  know  that  the  party  customarily 
receives  his  .letters  at  one  of  these  post-offices.^  But  both 
residences  must  be  more  or  less  permanent.  If  one  is 
temporarily  sojourning  at  some  place  distant  from  his  per- 
manent residence,  notice  should  be  sent  to  the  residence.® 
But  where  a  member  of  Congress  or  of  a  State  legislature  is 
in  attendance  upon  these  bodies,  his  residence  being  else- 

1  Pearsou  v.  Crallan,  2  J.  P.  Smith,  404. 

'=  Williams  v.  Bauk  of  United  States,  2  Pet.  9G;  Bank  of  United  States 
V.  Carneal,  2  Pet.  549;  Reed  v.  Payne,  IG  Johns.  218;  Montgomery  Co. 
Bank  v.  Marsh,  3  Seld.  481 ;  Cuyler  v.  Nellis,  4  Wend.  398;  Van  Vechten 
V.  Pruyn;  3  Kern.  549;  Bauk  of  Geneva  v.  Howlett,  4  Wend.  328. 

3  Van  Vechten  v.  Pnxyn,  3  Kern.  549;  Story  on  Bills,  §  297. 

^  Young  V.  Durgin,  15  Gray,  264. 

5  Exchange,  etc.,  v.  Boyce,  3  TJob.  (La.)  307;  Chouteau  v.  Webster,  (> 
Met.  1. 

«  Stewart  ■;;.  Eden,  2  Caines,  121;  Walker  v.  Stetson,  14  Ohio  St.  89; 
Runyou  v.  Mountfort,  Busbee,  371. 
596 


CH.  XVII.]  NOTICE    OF    DISHONOR.  §    342 

Avbere,  notice  of  dishonor  may  be  sent  to  him  at  the  capi- 
tal, provided  it  is  mailed  to  him  during  the  session.  It  will 
not  be  sufficient  if  it  be  sent  to  the  capital  after  the  ad- 
journment of  the  legislative  body.^ 

Where  the  party  does  not  reside  at  a  place  where  there 
is  a  post-office,  notice  should  be  sent  to  the  nearest  post- 
office,  unless  it  is  known  that  he  is  in  the  habit  of  re- 
ceiving his  letters  at  another  post-office,  when  the  notice 
should  be  sent  to  the  latter. ^  On  the  other  hand,  where 
there  are  two  or  more  branch  post-offices  in  the  same  town 
or  city,  it  will  be  sufficient  to  address  the  notice  to  the 
town  generally,  unless  the  holder  knows  at  which  post- 
office  the  party  usually  receives  his  mail,  when  it  should  be 
addressed  to  him  at  that  post-office.^  Indeed,  it  is  always 
sufficient  to  address  a  notice  generally  to  the  city  or 
town  in  which  the  party  resides,  unless  the  holder  knows 
the  street  address  of  the  party,  and  he  lives  in  a  city  in 
which  there  is  a  postal  delivery.  Under  other  circum- 
stances, a  more  particular  address  is  not  required.*  It  has 
been  held^  and  likewise  denied^  that  a  notice  will  be  suffi- 

1  Chouteau  v.  Webster,  6  Met.  1;  Maar  v.  Johnson,  9  Yerg.  1;  Bay- 
ley's  Admr.  v.  Chubb,  16  Gratt.  28J:;  Graham  v.  Sangstou,  1  Md.  59.  But 
see  Walker  v.  Tuustall,  3  How.  (Miss.)  259;  2  Sm.  &  M.  638,  where  it  is 
held  that  notice  sent  to  the  capital  is  only  sufficient  when  the  party  has 
no  other  known  place  of  residence.  See  also  Hill  v.  NoVvell,  3  McLean, 
583,  where  it  is  held  that  notice  shall  be  sent  to  the  permanent  residence 
of  the  Cougi^ssman. 

2  Bank  of  Columbia  v.  Lawrence,  1  Pet.  582;  Mercer  u.  Lancaster,  5 
Barr,  160;  Rand  r>.  Reynolds,  2  Gratt.  171;  Follaiu  v.  Dupre,  11  Rob. 
(La.)  454;  Jones  v.  Lewis,  8  W.  &  S.  14;  Bank  of  Geneva  v.  Howlett,  4 
Wend.  328. 

»  SacoNat.Bk.t?.  Sanborn,  63  Me.  340;  Morton  u.Westcott,  8  Cush.  425; 
Cabot  Bank  v.  Russell,  4  Gray,  167;  Burlingame  v.  Foster,  128  Mass.  125; 
Down  V.  Remer,  21  Wend.  10;  Bank  of  Manchester  v.  Slason,  13  Vt.  334. 

■*  True  V.  Collins,  3  Allen,  440.  But  see,  contra,  Walter  v.  Haynes, 
Ryan&  M.  149. 

^  Weakly  v.  Bell,  9  Watts,  273;  Bank  of  U.  S.  w.  Lane,  3  Hawks,  463; 
Story  on  Bills,  §  297;  1  Parsons'  N.  &  B.  497. 

«  Beenel  v.  Tournillon,  6  Rob.  (La.^)  .500. 

597 


§    342  NOTICE    OF    DISHONOR.  [CII.  XVII, 

cient  if  addressed  to  the  shire  or  county  town,  although 
there  is  a  post-oflfice  nearer  to  the  residence  of  the  party, 
and  one  from  which  tlie  party  usually  received  his  mail. 
In  every  case  of  sending  notice  to  any  part  of  the  United 
States,  it  is  necessary  that  the  name  of  the  State,  as  well 
as  of  the  town,  should  be  contained  in  the  address.  An 
omission  of  the  name  of  the  State  would  invalidate  the 
notice,  unless  actually  received.^ 

The  party  to  the  commercial  paper  may  always  give 
special  directions  as  to  what  postal  address  the  notice 
should  be  sent.  And  when  given,  they  must  be  followed, 
irrespective  of  the  question  of  residence  and  customary  post- 
office  address. 2  And  where  one,  in  signing  his  name  to  the 
paper,  adds  an  address,  the  law  implies  that  he  intends 
thereby  to  direct  the  notice  of  dishonor  to  be  sent  to  that 
address.^  So,  w^henever  a  party  holds  himself  out  in  any 
way  as  a  resident  of  a  certain  place,  he  is  thereafter 
estopped  from  denying  that  he  is  a  resident  of  that  place, 
in  order  to  invalidate  the  notice  sent  there  in  reliance  upon 
that  representation.*  In  the  line  of  this  principle,  it  has 
been  held  in  England  that  the  place  of  the  date  of  a  bill  is 
presumed  to  be  the  residence  of  the  drawer;   and  if  the 

1  Beck-n-ith  v.  Smith,  22  Me.  125. 

2  Crowley  v.  fiarry,  4  Gill,  194;  Bell  v.  Haserstown  Bank,  7  Gill,  210: 
Dicken??.  Hall,  87  Pa.  St.  379;  Eastern  Bank,  v.  Brown,  17  Me.  350: 
Hodges  V.  Gait,  8  Pick.  251 ;  Carter  v.  Union  Bank,  7  Humph.  548 ;  Bank 
of  Columbia  v.  Magruder,  6  Har.  &  J.  172;  Tyson  v.  Oliver,  43  Ala.  455; 
Shelton  v.  Braithwaite,  8  M.  &  W.  252.  And  the  fact  that  the  transmis- 
sion of  the  notice  to  the  postal  address  named,  will  consume  more  time 
than  its  transmission  to  the  party's  ordinary  address,  does  not  affect  the 
question.     Shelton  v.  Braithwajte,  sujira. 

3  Morris  V.  Husson,  4  Sandf.  93;  Bartlett  u.  Robinson,  39  N.  Y.  187; 
Manse  u.  Moors,  Ryan  &  M.  149;  Burmester  v.  Barron,  17  Q.  B.  828; 
Clarke  u.  Sharpe,  3  M.  &  W.  166;  Peters  v.  Hobbs,  25  Ark.  67;  Davis  v. 
Bank  of  Tennessee,  4  Sneed,  390;  Baker  v.  Moris,  25  Bab.  138;  Farmers' 
Bank  v.  Battle,  4  Humph.  86;  Carter  v.  Union  Bank,  7  Humph.  548. 

*  Lewis  Falls  Bank  v.  Leonard,  43  Me.  144. 
598 


CH.  XVII.]  NOTICE    OF    DISHONOR.  §    342 

notice  of  dishonor  is  sent  to  that  place,  it  will  be  sufficient, 
even  though  the  drawer  does  not  reside  there. ^  But  in  the 
United  States,  it  is  held  that  a  notice  sent  to  the  place  of 
the  date  is  only  sufficient  as  long  as  it  is  not  proven  that 
the  drawer  resides  elsewhere.-  Some  of  the  cases  also  hold 
that  the  place  of  the  date  is  presumptively  the  residence  of 
the  indorsers.^  But  it  would  seem  to  require  peculiar  cir- 
cumstances to  support  this  presumption.  Since  the  indorse- 
ment need  not  have  been  made  at  the  place  of  the  date, 
there  is  probably,  independently  of  special  circumstances, 
no  presumption  for  or  against  the  place  of  date  being  the 
residence  of  the  indorser.* 

The  holder  has  a  right,  in  the  absence  of  a  notice  of  a 
change  of  residence  by  the  drawer  or  indorser,  to  presume 
that  his  residence  is  the  same  as  it  was,  when  the  bill  or 
note  was  drawn  or  indorsed.^  But,  where  the  removal  of 
the  drawer  or  indorser  from  his  prior  residence  had  been 
a  matter  of  peculiar  notoriety,  and  the  holder's  relations 
to  the  other  party  were  such  that  it  was  likely  that  he  would 
hear  of  it,  the  jury  might  presume  from  these  facts  that  the 
holder  knew  of  thechano-e  of  residence.^ 


1  Burmester  v.  Barron,  17  Q.  B.  828;  Clarke  v.  Sharpe,  3  M.  &  W.  166. 

2  Lowery  v.  Scott,  24  Wend.  858;  Hill  v.  Varrell,  3  Greenl.  233;  Barn- 
well w.  Mitchell,  3  Conn.  101;  Pierce  v.  Strathers,  27  Pa.  St.  249;  Fisher 
V.  Evans,  5  Biun.  541 ;  Foard  v.  Johnson,  2  Ala.  565;  Robinson  v.  Hamil- 
ton, 4  Stew.  &  P.  91.  In  Alabama,  it  is  held  that  the  place  of  the  date  is 
not  eyen  prima  facie  presumed  to  be  the  residence. 

3  Moodie  u.  Morrall,  3  Const.  R  qS.  C.)  367;  Lasscer  u.  Whitely,  10  Md. 
98;  Branch  v.  Pierce,  3  Ala.  321. 

*  Wood  V.  Corl,  4  Met.  203;  Pageu.  Prentice,  5  B.  Mon.  7;  Lowery  v. 
Scott,  24  Wend.  358;  Gilchrist  w.  Donnell,  53  Mo.  591. 

»  Knott  V.  Venable,  42  Ala.  186 ;  Farmers'  Bank  v.  Harris,  2  Humph. 
311;  Harris  t;.  Memphis  Bank,  4  Humph.  519;  Saco  Nat.  Bank  v.  San- 
born, 63  Me.  340;  Dunlap  v.  Thompson,  5  Yerg.  67;  Requa  v.  Collins,  51 
N.  Y  148;  Bank  of  Utica  v.  Phillips,  3  Wend.  408;  Ward  v.  Perrin,  54 
Barb.  89;  First  Nat.  Bank  v.  Wood,  51  Vt.  473;  Bank  of  Utica  v.  David- 
son, 5  Wend.  588. 

*  Planters'  Bank  v.  Bradford,  4  Humph.  39;  Harris  v.  Memphis  Bank, 

599 


§    o43  NOTICE    OF    DISHONOR.  [CII.   XVII. 

§  343.  What  is  meant  by  "residing  at  the  same 
place." — It  is  somewhat  difficult  to  determine  at  times 
who  are  to  be  regarded  as  living  in  the  same  place,  and 
therefore  may  require  personal  service  of  a  notice  of  dis- 
honor, instead  of  its  transmission  through  the  mail.  On 
the  ground  that  the  mail  cannot  be  used  as  a  means  of 
transmission  of  notices,  except  when  the  notices  arc 
addressed  and  must  be  sent  to  another  post-office,  it  is  held 
that  all  persons  are  deemed  for  this  purpose  to  reside  in 
the  same  place,  who  get  their  mail  out  of  the  same  post- 
office.  And  the  rule  is  made  to  apply  to  persons  who 
reside  several  miles  distant  from  the  place.  ^  But  where 
the  party  has  no  regular  place  of  business  in  the  city  or 
town,  where  the  holder  resides,  and  he  lives  outside  of  the 
corporate  limits,  it  has  been  held  to  be  reasonable  and  per- 
missible to  deposit  the  notice  in  the  post-office,  instead  of 
sending  it  to  the  part}"' s  residence  by  special  messenger.'^ 
On  the  other  hand,  it  has  been  held  that  where  there  are 
two  or  more  post-offices  within  the  corporate  limits  of  a 
town  or  city,  between  which  there  is  a  resrular  exchansre  of 
mail,  parties  receiving  their  mail  from  different  post-offices 

4  Humph.  519;  Farmers'  M.  Bauk  v.  Harris,  2  Humph.   311;  McVeigh 
V.  Allen,  29  Gratt.  596;  Bank  of  Utica  v.  Pliillips,  3  Wend.  408. 

^  Shelbume  Falls  Nat.  Bank  v.  Townsley,  102  Mass.  177;  Farmers' 
Bauk  V.  Battle,  4  Humph.  86;  Eagle  Bank  v.  Hathaway,  5  Met.  212; 
Ireland  v.  Kip,  10  Johns.  490;  11  Johns.  231;  Forbes  v.  Omaha  Nat. 
Bank,  10  Neb.  338;  Barker  v.  Hall,  Mart.  &  Yerg.  183;  Ransom  v.  Mack, 
2  Hill,  587;  Louisiana  State  Bank  v.  Rowell,  6  Mart.  506;  Patrick  v. 
Beazley,  G  How.  (Miss.)  609. 

2  Bank  of  Columbia  v.  Lawrence,  1  Pet.  578;  Walker  r.  Bank  of 
Augusta,  3  Kel.  486;  Gist  v.  Lybraud,  3  Ohio  307;  Jones  v.  Lewis,  8 
Watts  &  S.  14;  Foster  v.  Smeath,  2  Rich.  338;  Boudurant  v.  Everett,  1 
Mot.  (Ky.)  658;  Bank  of  United, States  v.  Norwood,  1  Harr.  &  J.  423; 
Carson  v.  Bank  of  Alabama,  4  Ala.  148;  Timms  v.  Delisle,  5  Blackf. 
447;  Bellv.  State  Bank,  7  Blackf.  4.57;  Walker  v.  Bank  of  Missouri,  8 
Mo.  704 ;  Barrett  v.  Evans,  28  Mo.  323.  In  the  last  case,  it  was  claimed 
that  the  corporate  limits  of  a  city  detinc  the  limit.><  of  the  requirement 
of  personal  notice. 
600 


CH.  XVII. J  NOTICE    OF    DISHONOR.  §    344 

within  the  corporate  limits  will  be  considered  as  residing  in 
different  places,  for  the  purpose  of  determining  whether 
personal  service  of  notice  of  dishonor  is  required.^ 

§  344.  What  constitutes  notice  —  May  be  verbal  or 
written. — Mere  knowledge  of  dishonor  does  not  amount 
to  notice. 2  Notice  consists  of  the  communication  of  the 
fact  of  dishonor  by  the  person  whose  duty  it  is  to  give  the 
notice.  It  is  not  necessary  that  the  communication  should 
be  in  writing;  it  may  be  verbal.''  And  when  it  is  verbal, 
it  seems  that  the  notice  is  less  strictly  construed,  the  most 
meagre  sort  of  notice  being  held  to  be  sufficient ;  for  since 
a  verbal  notice  is  of  necessity  served  personally,  the  party 
notified  has  an  opportunity  to  ask  for  a  more  explicit  notice, 
if  he  does  not  fully  understand  the  one  given.* 

In  order  that  the  notice  may  be  complete,  it  should  con- 
tain (1)  a  sufficient  description  of  the  bill  or  note;  (2)  a 
statement  that  it  had  been  presented  for  acceptance  or  pay- 
ment, and  had  been  dishonored;  (3)  the  statement  that  the 
paper  had  been  protested,  and  (4)  an  announcement  of  the 
intention  of  the  holder  to  look  for  payment  to  the  party 
addressed. 

1  Shaylor  v.  Mix,  4  Alleu,  351;  Bell  v.  Hagerstovvu  Bank,  7  Gill,  216; 
Briudley  v.  Barr,  3  Harr.  (Del.)  419;  Louisiana  State  Bank  v.  Eowell, 
18  Mart.  (La.)  506;  Farmers'  Bank  v.  Butler,  3  Litt.  498;  Curtis  v.  State 
Bank,  6  Black,  312;  Gist  v.  Lybrancl,  3  Ohio,  307. 

2  Juniata  Bank  v.  Hale,  16  Serg.  &  E.  157 ;  Brown  v.  Ferguson,  4  Leigh, 
37;  Bank  of  Old  Dominion  v.  McVeigh,  29  Gratt.  559;  26  Gratt.  852; 
Story  on  Bills,  §  375. 

3  Tiudal  V.  Brown,  1  T.  R.  167;  Housego  v.  Cowne,  6  L.  J.  Exch.  110; 
Crosse  v.  Smith,  1  Maule  &  S.  545;  Bank  v.  Brooking,  2  Litt.  41;  Glas- 
cow  V.  Pratte,  8  Mo.  366 ;  Cuyler  v.  Stevens,  4  Wend.  506 ;  Merritt  v. 
Woodbury,  14  Iowa,  299 ;  First  Nat.  Bank  v.  Ryerson,  23  Iowa,  508 ;  Gil- 

,  bert  V.  Dennis,  3  Met.  495;  Boyd's  Admr.  v.  City  Sav.  Bank,  15  Gratt.  501 ; 
Thompson  v.  Williams,  14  CaJ.  160 ;  Pierce  v.  Schaler,  55  Cal.  406 ;  1  Par- 
sons' N.  &  B.  336;  Story  on  Notes,* §  341. 

*  Metcalfe  v.  Richardson,  11  C.  B.  (73  E.  C.  L.  R.)  1011;  Phillips  u. 
Gould,  8  C.  &  P.  (34  E.  C.  L.  R.)  355;  Thompsons.  Williams,  14  Cal.  162. 

001 


§    345  NOTICE   OF    DISHONOR.  [CH.  XVII, 

§  345.  A  sufficient  description  of  the  bill   or  note. — 

The  descrij^tion,  when  properly  made,  should  give  the  date 
of  the  paper,  by  whom  executed,  payable  to  whom,  for 
what  amount,  when  due,  by  whom  indorsed,  and  in  the  case 
of  bills  of  exchange,  on  whom  it  is  drawn.  If  payable  at 
a  particular  place,  the  place  should  be  stated. 

When  these  ordinary  elements  are  properly  described, 
the  holder  has  done  all  that  can  be  required,  and  if  the 
party  notified  is  misled  because  he  had  executed  more  than 
one  paper  on  the  same  day,  for  the  same  amount,  payable  to 
the  same  person,  on  the  same  day,  and  indorsed  by  the  same 
persons,  the  instruments  differing  from  each  other  as  in 
one  case,  only  in  the  numbers  marked  on  the  margin,  the 
holder  will  not  be  responsible.  He  cannot  be  expected  to 
include  in  his  notice  a  description  of  unusual  marks  and 
characteristics.^  So,  also,  is  it  unnecessary  to  state  who  the 
holder  is  or  on  whose  behalf  demand  is  made,  it  being  pre- 
sumed that  the  party  giving  the  notice  is  the  holder  or  the 
notarial  agent  of  the  holder.^  Where  several  notes  differed 
only  in  the  day  of  payment,  it  was  held  by  the  New  York 
Court  of  Appeals,  that  the  day  of  maturity  of  the  note 
which  had  been  dishonored  must  be  expressly  stated  in  the 
notice,  and  cannot  be  inferred  from  the  date  of  the  protest. 
In  the  notice  it  was  stated  that  the  note  "was  duly  pro- 
tested for  non-payment  on  the  day  that  the  same  became 
due."^  It  would  seem  impossible  for  the  party  to  be 
misled  in  such  a  case,  and  one  is  not  surprised  to  learn 
that  in  the  second  trial  of  the  same  case,  it  was  held  that 

1  Hodges  V.  Schuler,  22  N.  Y.  115. 

2  Shed  V.  Brett,  1  Pick.  401;  Woodthrope  v.  Lawes,  2  M.  &  W.  100; 
Mills  V.  Bank  of  United  States,  11  Wheat.  431;  Klockenbaum  v.  Pierson, 
16  Cal.  375;  Walker  v.  State  Bank,  8  Miss.  704;  Howe  v.  Bradley,  19 
Me.  35;  Bradley  v.  Davis,  29  Me.  45..  Harrison  v.  Ruscoe,  15  M.  &W. 
231. 

3  Cook  17,  Litchfield,  5  Seld.  286;  overruling  Cook  v.  Litchfield,  5 
Sandf.  340. 

H02 


I 


CH.  XVII.]  NOTICE   OF   DISHONOR.  §    346 

the  party  notified  had  not  been  misled,  and  consequently  is 
not  discharged  from  liability.^ 

But  it  is  a  ruling  of  the  courts,  to  which  there  is  probably 
no  exception,  that  if  the  party  notified  is  not  misled  by 
any  misdescription  of  the  note  or  bill,  or  of  any  of  its  ele- 
ments, he  cannot  claim  a  discharge  from  liability  on  the 
ground  that  the  description  was  not  complete.^  But  if  the 
party  was  in  fact  misled  by  the  omission  or  misstatement, 
he  will  be  discharged. 

§  346.  Statement    of    dishonor    and    protest. — It    is 

universally  held  to  be  necessary  that  the  notice  should  in- 
dicate on  its  face,  by  express  statement  or  by  necessary  or 
reasonable  implication,  that  the  paper  had  been  presented 
and  dishonored.^  But  dishonor  will  not  be  inferred  from 
the  simple  statement  of  non-payment,  if  it  be  not  accom- 
panied by  a  statement  that  presentment  and  demand  had 
been  made.*    Nor  will  it  be  sufficient  to  say  that  payment 

1  Cookv.  Richfield,  2  Bosw.  147. 

2  Gill  V.  Palmer,  29  Conn.  54;  Messenger  v.  Southey,  1  M.  &  G.  (39  E. 
C.  L.  R.)  76;  Stockman  v.  Parr,  11  M.  &  W.  809;  Mellersh  v.  Rippen,  7 
Exch.  578;  Haines  v.  Dubois,  1  Vroom,  259;  Cayuga  Bank  v.  Warden, 
1  Comst.  415;  Cook  v.  Litchfield,  5  Seld.  279;  Beals  v.  Peck,  12  Barb.  245; 
Youngs  v-  Lee,  18  Barb.  187;  Housatonic  Bank  v.  Lafliu,  5  Cush.  546; 
Wynn  v.  Alden,  4  Dev.  163;  Reynolds  v.  Appleman,  41  Md.  615;  Mills  v. 
Bank  of  United  States,  11  Wheat.  431;  Dennistoun  v.  Stewart,  17  How. 
606;  Kilgore  v.  Buckley,  14  Conn.  362;  Thompson  w.  Williams,  14  Cal. 
162;  Tobey  v.  Lennig,  14  Pa.  St.  483;  Ross  v.  Planters'  Bank,  5  Humph. 
335;  Bank  of  Alexandria  v.  Swann,  9  Pet.  33;  Wood  v.  Watson,  53  Me. 
300,  Bank  of  Rochester  v.  Gould,  9  Wend.  279 :  Reedy  v.  Seixas,  2  Johns. 
Cas.  337;  Snow  D.  Perkins,  2  Mich.  238;  Rowan  v.  Odenheimer,  5  Smed. 
&  M.  44;  Carter  v.  Bradley,  19  Me.  62;  Smiths.  Whiting,  12  Mass.  6; 
Moorman  v.  Bank  of  Alabama,  12  Ala.  353;  McCune  v.  Belt,  38  Mo.  291; 
Downer  v.  Reraer,  23  Wend.  670;  s.  c.  25  Wend.  277. 

3  Solarte  v.  Palmer,  7  Bing.  530  (20  E.  C.  L.  R)  ;  5  Moo.  &  P.  475;  1 
Cromp.&  J.  417;  1  Tyrw.  371;  Hedger  v.  Steavenson,  2  M.  &  W.  799; 
5Dowl.771;  Lewis  u.  Gompertz,  6  M.  &  W.  402;  Wilkinson  w.  Adams 
1  Ves.  &  B.  466;  Boneton  v.  Welsh,  3  Bing.  N.  C.  688. 

*  Page  V.  Gilbert,  60  Me.  488;  Union  Bank  v.  Humphreys,  48  Me.  172; 

603 


§    340  NOTICE    OF    DISHONOR.  [CH.  XVII. 

was  demanded,  if  it  is  not  also  stated  that  the  paper  had 
been  presented.^  But  the  simple  statement  that  the  paper 
had  been  "  dishonored  "  is  sufficient,  without  any  further 
statement  of  presentment  and  demand,  since  these  other 
factsmay  be  inferred  from  the  fact  of  dishonor.^  Audit 
will  also  be  sufficient  if  the  statement  of  non-payment  is 
coupled  with  a  statement  of  protest,^  or  words  from  which 
the  fact  of  protest  may  be  implied,  such  as  "  your  bill  is 
unpaid,  noting  5  s."  *  But  it  is  not  necessary  for  the  no- 
Gilbert  V.  Denis,  3  Met.  495;  Phillips  f.  Gould,  8  C.  &  P.  (34  E,  C.  L.  R.) 
355;  Furze  v.  Sharvvood,  2  Q.  B.  (42  E.  C.  L.  R.)  338;  Strange  v.  Price, 
10  Ad.  &  El.  (34  E.  C.  L.  R.)  125;  Messenger  v.  Southcy,  I  Man.  &  G. 
(39  E.  C.  L.  R.)  76;  Boueton  v.  Welsh,  3  Bing.  N.  C.  (32  E.  C.  L.  R.) 
688;  Hartley  v.  Case,  1  Barn.  &  C.  339;  Graham  v.  Langston,  1  Md. 
60;  Armstrong  v.  Thurston,  II  Md.  148;  Pinkham  v.  Macy,  9  Met. 
174;  Clark  v.  Eldridge.  13  Met.  96;  Lockwood  v.  Crawford,  18  Conn. 
3()1 ;  Ethiug  v.  Schuylkill  Bank,  2  Barr.  35G;  Sinclair  v.  Lynch,  1  Spears, 
244;  Townsend  v.  Lorain,  Bank,  2  Ohio  St.  355;  Arnold  v.  Kinloch, 
50  Barb.  44.  But  see  contra  Cromer  v.  Piatt,  37  Mich.  132,  where  it 
is  held  that  the  rule  of  the  text  is  too  severe.  See  also  Robson  v. 
CurlcAVis,  Car.  &  M.  378;  2  Q.  B.  421.  And  where  the  paper  is  payable 
at  a  bank,  it  will  suffice  to  state  the  fact  of  non-payment,  since  it  is  not 
necessary  then  to  make  a  formal  presentment.  Gilbei-t  v.  Dents,  3  Met. 
495. 

1  Musson  V.  Lake,  4  How.  202. 

2  Lewis  r.  Gorapertz,  G  M.  &  W.  400;  Rowland  v.  Sprinjett,  14  M.  & 
W.  (7  E.  C.  L.  R.)  7:  Shelton  v.  Braithwaite,  7  M.  &  W.  436;  Stocken  v. 
Collin,  9  C.  P.  (38  E.  C.  L.  R.)  653;  s.  c.  7  M.  &  W.  515;  King  v.  Bickley, 
2  Q.  B.  419;  Edmunds  v.  Gates,  2  Jur.  183;  Woodthorpe  v.  Lawes,  2  M. 
&  W.  109;  Smith  v.  Boulton,  1  Hurl.  &  W.  3. 

3  Mills  V.  Bank  of  United  States,  11  Wheat.  431;  Bank  of  Alexandria 
■0.  Swann,  9  Pet.  33;  Howe  u.  Bradley,  19  Me.  31;  Housatouic  Bank  v. 
Laflin,  5  Gush.  546;  Kilgore  v.  Buckley,  14  Conn.  362;  Beals  v.  Peck,  12 
Barb.  445;  Cook  v.  Litchfield,  5  Sandf.  330;  5  Seld.  279;  Youngs  v.  Lee, 
2  Kern.  551;  Brewster  v.  Arnold,  1  Wis.  264;  Smith  v.  Little,  ION.  H. 
526;  Burgess?;.  Vreeland,  4  N,  J.  71;  Burkham  v.  Trowbridge,  9  Mich. 
209;  Wheaton  v.  Wilraarth,  13  Met.  422;  McFarland  v.  Pico,  8  Cal.  636; 
Eastman  v.  Truman,  24  Cal.  383;  Saltmarsh  v.  Tuthill,  13  Ala.  390; 
Crawford  v.  Branch  Bank,  7  Ala.  205;  Spies  v.  Newbury,  2  Doug.  (Mich.) 
495. 

■*  Armstrong  v.    Christiana,  6  C.  B.  (57  E.  C.  L.   R.)  687;  Hedger  r. 
Steavenson,  2  M.  &  W.  799;  5  Dowl.  771;  Everard  v.  Watson,  1  El.  &  B. 
604 


(11.   XVIl.]  NOTICE    OF    DISHONOR.  §    o4() 

tice  to  state  when  the  demand  was  made,  or  at  what  time 
the  paper  fell  due,  if  the  fact  and  time  of  dishonor  are 
stated;^  nor  that  the  party  had  the  i^aper  in  his  possession 
when  he  demanded  payment;^  nor  that  the  maker  or  ac- 
ceptor was  absent  when  the  presentment  was  made.^  It 
has  been  held  that  in  the  case  of  foreign  bills  and  notes  the 
notice  should  state  the  fact  of  protest,*  although  it  is  not 
necessary,  as  it  was  once  supposed,  that  a  copy  of  the  pro- 
test should  accompany  the  notice.^  And  it  has  been  held 
that  even  the  statement  of  protest  was  unnecessary,  if  the 
paper  was  in  fact  protested.*^  It  has  been  held  that  if  the 
party  was  not  misled,  he  would  still  be  liable,  although 
the  notice  misstated  the  time  of  presentment  and  demand.^ 
But  it  has  been  held  otherwise  by  some  of  the  courts,  on 
the  ground  that  the  notice  is  in  such  a  case  a  necessary 
notification  of  the  discharge  of  the  party  addressed,  and 
that  the  party  has  a  right  to  presume  the  correctness  of 
the  statements  of  the  notice.^ 


801;  Mellersh  v.  Rippeu,  7  Excli.  578;  DeWolf  v.  Murray,  2  Sandf.  166; 
Grudgeon  v.  Smith,  6  Ad.  &  El.  (Q3  Eng.  C.  L.  R.)'  490;  2  Nev.  &  P.  303. 

1  Mills  15.  Bauk  of  United  States,  11  Wheat.  431 ;  Wynn  i;.  Alden,  4 
Den.  163;  Deuegrie  v.  Hiriatt,  6  La.  Ann.  100;  Fleming  v.  Fulton,  6 
How.  (Miss.)  473.  Reynolds  v.  Appleman,  41  Md.  615;  Thompson  v. 
Williams,  4  Cal.  1G4. 

2  Mainerw.  Spurlocli,  9  Rob.  (La.)  161. 
*  Sanger  v.  Stimpson,  8  Mo.  2G0. 

■*  See  Rogers  v.  Stephens,  2  T.  R.  713;  Rollins  «.  Gilson,  3  Camp.  334; 
1  M;  &  S.  288;  Byles  on  Bills  [*277],  420;  Thompson  on  Bills,  334. 

5  Wallaces.  Agry,  4  Mason,  336;  Goodman  v.  Harvey,  4  Ad.  &  El. 
(31  E.  C.  L.  R.)  870;  Robins  v.  Gibson,  1  Maule  &  S.  288;  Ex  parte 
Lowenthal,  L.  R.  9  Ch.  591;  Cromwell  v.  Hynson,  2  Esp.  511;  Dennis- 
touu  u.  Stewart,  17  How.  606;  Lenox  u.  Leverett,  10  Mass.  1;  Wells  v. 
Whiteliead,  15  Wend.  527. 

6  Ex  parte  Lowenthal,  L.  R.  9  Ch.  591 ;  2  Ames  B.  &  N.  452. 

'  Crociier  u.  Getchell,  23  Me.  892;  Ontario  Bank  v.  Petrie,  3  Wend. 
456;  Journey  t7.  Pierce,  2  Houst.  176. 

8  Ransom  v.  Mack,  2  Hill,  687;  Etting  v.  Schuylkill  Bank,  2  Pa.  St. 
355;  Reynolds  V.  Appleman,  41  Md.  615;  Townsend  u.  Lorain  Bank,  2 
Ohio  St.  345;  Routh  v.  Robertson,  11  Smed.  &  M.  362. 

605 


§    346  NOTICE    OF    DISHONOR.  [CH.  XVII. 

§  347.  Stateiueut  that  the  holder  looks  for  payment 
to  party  notified.  — It  was  formerly  held  that  the  notice 
should  contain  the  express  statement  that  the  holder  looks 
for  payment  to  the  party  to  whom  the  Dotice  is  addressed.' 
But  it  is  now  held  to  be  unnecessary,  on  the  ground  that  this 
intention  of  the  holder  is  fairl}^  implied  from  the  act  of 
sending  the  notice.  The  sole  object  of  the  notice  is  to  hold 
the  party  addressed  liable  as  drawer  or  indorser.^ 

§  348.  Allegation  and  proof  of  notice.  —  It  is,  of  course, 
necessary  to  allege  and  prove  notice  or  to  show  sufficient 
cause  for  not  sending  the  notice.  The  burden  of  proof  is 
on  the  plaintiff,  in  the  suit.  And  he  may  either  show  that 
the  notice  has  been  actually  received  by  the  defendant, 
either  affirmatively  or  by  the  proof  of  admission  and  ac- 
knowledgments of  the  defendant,^  or  may  show  that  all  the 
steps  required  by  law  have  been  taken  to  get  the  notice  to 
the  defendant,  in  which  case  the  defendant  is  presumed  to 
have  received  the  notice.*  And  where  notice  is  allowed  by 
law  to  be  sent  by  mail,  it  will  be  sufficient  proof  of  notice, 
to  show  that  the  letter,  containing  the  notice  was  deposited 
in  the  post-office,  on  the  proper  day,  properly  addressed.^ 

1  Tinclall  v.  Brown,  1  T.  R.  1G9;  Solarte  v.  Palmer,  7  Bing.  530  (20  E 
C.  L.  E.) 

2  Bank  of  Uuited  States  ■;;.  Carueal,  2  Pet.  543;  Cowles  v.  Harts,  3 
Conu.  517;  Warren  v.  Gilmau,  5  Sliei).  3(10;  Bank  of  Cape  Fear  r.  Sea- 
well,  2  Hawks,  5G0  ;  Towusend  v.  Lorain  Bank,  2  Ohio  St.  345;  ShrieVe  v. 
Duckham,  1  Litt.  194;  Bax'Stow  v.  Hiriart,  6  La.  Ann.  98;  Farze  v.  Shar- 
wood,  2  Q.  B.  (42  E.  C.  L.  R.)  388;  Metcalf  v.  Richardson,  20  Eng.  L.  & 
Eq.  301;  Gaunt  v.  Thompson,  7  C.  B.  (62  E.  C.  L.  R.)  400;  Chard  i'.  Fox, 
14  Q.  B.  (68  E.  C.  L.  R.)  200;  King  v.  Buckley,  2  Q.  B.  (42  E.  C.  L.  R.) 
419;  Burgess  v.  Vreeland,  4  N.  J.  71. 

^  Dickens  v.  Beal,  10  Pet.  572:  Todd  v.  Neal's  Admr.  49  Ala.  266;  Done- 
gan  V.  Wood,  49  Ala.  242 ;  First  Nat.  Bk.  r.  Wood,  51  Vt.  471. 

•»  Lambert  v.  Ghiselin.9  How.  552;  Saco  Nat.  Bank  v.  Sanborn,  63  Me. 
340;  Shed  v.  Brett,  1  Pick.  401. 

■>  Bussard  v.  Levering,  G  Wheat.  102:  Dickens  v.  Beal,  10  Pet.    572; 
Shed  V.  Brett,  1  Pick.  401;  Briggs  v.  Ilervey,  130  Mass,  186. 
606 


CH.  XVII.]  '         NOTICE    OF    DISHONOR.  §    348 

The  fact  of  mailiug  the  notice  may  be  proved  by  the 
testimouy  of  the  officer  or  clerk  who  mailed  it.  And  his 
testimony  concerning  the  contents  of  the  notice,  is  ad- 
missible without  first  proving  that  a  demand  had  been  made 
for  a  production  of  the  letter  in  open  court. ^  And  when  the 
notary  or  other  agent,  Avho  sent  out  the  notice,  is  dead,  the  fact 
may  be  established  by  the  introduction  of  the  books  of  such 
agent,  in  which  he  had,  in  due  course  of  business,  made  a 
memorandum  of  the  notice  having  been  sent.  This  sort  of 
secondary  evidence  has  been  admitted,  not  only  in  the  case 
of  notaries,^  but  also  in  the  case  of  cashiers,  book-keepers, 
messengers  and  other  clerks.-^  But,  in  order  that  the  entries 
in  any  person's  books  may  be  admitted  as  evidence  of  the 
facts  therein  stated,  the  person  who  wrote  them  must  him- 
self be  dead.  If  he  is  alive,  the  entries  are  inadmissible, 
although  he  made  them  as  the  book-keeper  of  the  notary, 
who  is  dead.*  And,  of  course,  the  entries  are  sufficient 
evidence  of  notice,  only  so  far  as  the  facts  stated  therein 
will  prove  a  compliance  with  the  law  in  respect  to  notice,^ 

The  protest  of  bills  and  notes  is  now  made  by  statute  evi- 
dence of  notice,  when  the  fact  of  notice  is  stated  therein.^ 

But  in  any  case,  it  is  not  necessary  that  the  testimony 
should  prove  directly  and  conclusively  that  the  notice  had 
been  mailed  or  served,  provided  the  facts  proven  raise  a 
prima  facie  presumption    of  the  notice  having  been  sent. 

1  Liudenberger  v.  Beall,  G  Wheat.  104;  Kiue  v.  Beaumont,  3  Brod.  &  B. 
288;  7  J.  B.  Moore,  112;  Roberts  v.  Bradshaw,  1  Stark.  28;  Eagle  Bank  v. 
Chapin,  3  Pick.  180;  Leavitt  v.  Simes,  3  N.  H.  14, 

-  NichoUs  V.  Webb,  8  Wheat.  32r, ;  Homes  v.  Smith,  IG  Me.  181;  Price 
V.  Torington,  1  Salk.  285;  Halliday  v.  Martinet,  20  Johns.  1G8;  Nicliols  v. 
Goldsmith,  7  Wend.  IGO. 

3  Welsh  V.  Barratt,  15  Mass.  380;  Nichols  v.  Goldsmith,  7  Wend.  160; 
Ocean  Nat.  Bank  v.  Carll,  16  N.  Y.  S.  C.  (10  Hun)  241. 

^  Wilbur  V.  Seldon,  6  Cow.  162;  Gawtry  v.  Doane,  51  N.  Y.  90. 

5  Farmers'  Bank  v.  Duvall,  7  Gill  &  J.  78;  Halliday  v.  Martinet,  20 
Johns.  168, 

6  See  ante,  §  327. 

no7 


§    348  NOTICE   OF    DISHONOR.  [CH.  XVII. 

Thus,  proof  that  a  letter,  contaiuing  the  notice,  was  put 
with  other  letters,  intended  to  be  mailed,  and  that  the  pack- 
af^e  of  letters  was  deposited  in  the  post-office,  was  held  to  be 
sufficient  evidence  of  the  mailing  of  the  notice.^  But  the 
testimony  must  be  positive  as  to  the  fact  that  notice  of  dis- 
honor was  prepared  for  the  mail  in  that  particular  case.  It 
would  not  be  sufficient  to  prove  that  a  notice  of  dishonor 
was  mailed,  without  showing  that  the  notice  of  dishonor 
referred  to  the  paper  on  which  the  action  is  brought.^ 

A  post -mark  is  prima  facie^  but  not  conclusive  evidence 
that  notice  was  mailed  on  the  day  named. ^  Nor  is  it  suffi- 
cient for  a  witness  to  state  that  notice  was  sent,  without 
stating  by  whom.^ 

It  is  always  sufficient  to  show  that  due  diligence  had  been 
exercised  in  sending  or  giving  the  proper  notice  to  the  de- 
fendant. If  the  facts  are  not  in  dispute,  it  is  a  question  of 
la\v  for  the- court  to  determine  whether  they  show  that  due 
diligence  had  been  exercised.  But  if  the  facts  are  in  dis- 
pute, it  is  a  question  for  the  jury.^  And  when  due  dili- 
•rence  has  been  exercised  in  the  sending  of  the  notice, 
the  holder  is  not  obliged  to  send  a  second   notice    when 

J  Commercial  Bauk  v.  Strong,  28  Vt.  31G;  Skilbe  v.  Garbett,  7  Q.  B. 
84ti.  See  Miller  v.  Hackles,  5  Johns.  375;  Flack  v.  Green,  3  Gill  &  J.  474  ; 
Brailsford  v.  Williams,  15  Md.  150. 

2  Couch  t?.  Sherrill,  17  Kan.  622. 

3  New  Haven  Co.  Bank  v.  Mitchell,  15  Conn.  206;  Kex  v.  Plumer,  Rus. 
&  Ry.  264;  Langdon  v.  Hulls,  5  Esp.  156;  Arcaugelow  v.  Thompson,  2 
Camp.  620;  Fletcher  v.  Braddyll,  3  Stark.  64;  Early  v.  Preston,  1  Pat. 
&  Heath,  228;  Stoker  v.  Collier,  7  M.  &  W.  545;  9  C.  &  P.  (38  E.  C.  L. 
R.  653.  Genuineness  of  the  post-mark  may  be  proved  by  any  witness. 
Woodcock  V.  Houldsworth,  16  M.  &  W.  124;  Fletcher  o.  Braddyll,  3 
Stark. 64. 

*  Hawkes  v.  Salter,  1  M.  &  P.  750. 

5  Rhett  V.  Poe,  2  How.  457;  Harris  v.  Robinson,  4  How.  336;  Bauk  of 
Columbian.  Lawrence,  1  Pet.  578;  AYheeler  v.  Field,  6  Met.  290;  Belden 
V.  Lamb,  17  Conn.  442;  Bank  of  Utica  v.  Bender,  21  Wend.  643;   Walker 
V.  Stetson,  14  Ohio  St.  89;  Lane  v.  Bank  of  W.  Tenu.,  9  Heisk.  419. 
(i08 


CH.  XVII.]  NOTICE    OF    DISHONOR.  §    348 

he  discovers  that  the  first  notice  was  sent  to  tlie  wrouo; 
place. ^ 

It  was  once  held  that  an  averment  of  presentment,  de- 
mand, notice  and  protest  could  not  be  supported  by  proof 
of  facts  Avhich  tend  to  excuse  the  failure  to  make  present- 
ment and  demand,  but  to  issue  the  protest  and  notice  of 
dishonor.  A  special  averment  was  held  to  be  necessary 
under  these  circumstances. ^  But  this  view  does  not  meet 
with  favor  in  the  United  States,  where  it  is  generally  held 
that  facts  may  be  introduced  in  evidence  to  support  such 
an  allegation,  which  excuse  the  want  of  protest  and  notice."^ 
And  even  in  England,  the  law  on  this  subject  does  not  ap- 
pear to  be  very  clearly  settled.* 

1  Lambert  v.  Ghiselin,  9  How.  552.  But  see  contra  Beale  v.  Parish, 
20  N.  Y.  407. 

-  Byles  on  Bills  [*-il8,  *419],  618,  619,  citing  Burgli  v.  Legge,  5  M.  & 
W.  418.  See  Terry  v.  Parlser,  6  Ad.  &  E.  502;  s.  c.  N.  &  P.  752;  Carter  v. 
Flower,  16  M.  &  W.  749. 

3  Jones  V.  Tales,  4  Mass.  245;  City  Bank  v.  Cutter,  3  Pick.  414; 
Taunton  Bank  v.  Richardson,  5  Pick.  436,  444 ;  North  Bank  v.  Abbott, 
13  Pick.  465;  Kent  v.  Warner,  12  Allen,  561 ;  Harrison  v.  Bailey,  99  Mass. 
620;  Armstrong  v.  Chadwick,  127  Mass.  756;  Camp  v.  Bates,  11  Conn. 
488,  493;  Norton  u.  Lewis,  2  Conn.  478;  Windham  Bank  v.  Norton,  22 
Conn,  214;  Tobey  v.  Berley,  26  111.  426;  Kennan  v.  McRae,  7  Port.  (Ala.) 
176;  Purchase  v.  Mattison,  6  Duer,  592;  Stewart  v.  Eden,  2  Caines,  127; 
Ogden  V.  Couley,  2  Johns.  274;  Williams  v.  Matthews,  3  Cow.  262.  See 
also  Shirley  v.  Fellows,  9  Port.  300;  McVeigh  v.. Bank  of  Old  Dominion, 
26  Gratt.  799;   Spaun  v.  Balzell,  1  Fla.  302. 

^  Brownell  v.  Bonney,  1  Q.  B.  39;  3  M.  &  Ey.  359;  s.  c.  D.  &  L.  151; 
Baldwin  v.  Richardson,  1  B.  &  C.  245;  s.  c.  2  D.  &  Ry.  285;  Firth  17. 
Thrush,  8  B.  &  C.  387. 

39  609 


CHAPTER    XVIU. 

CIRCUMSTANCES   WHICH  WILL  EXCUSE  WANT  OF  PRESENT- 
MENT, PROTEST  AND  NOTICE. 

Section  354.  War,  political  aud  social  disturbances,  pestilence,  confla- 
gration, floods,  etc. 

355.  Drawing  without  right  to  expect  acceptance  and  payment. 

356.  What  relations  between  the  parties  will  excuse  want    of 

presentment  and  notice. 

357.  When  the  note  is  void. 

358.  Inability  to  discover  the  address  of  parties. 

359.  What  is  due  diligence  in  making  inquiries  after  parties. 

360.  Sickness  and  death  of,  or  accident  to  the  holder. 

361.  Delay  in  receipt  of  the  paper. 

362.  When  party  has  received  security  for  his  secondary  lia- 

bility 

363.  Waiver  of  presentment  and  notice. 

364.  Waivers  made  after  execution  and  before  maturity  of  the 

paper. 

365.  Waivers  after  maturity. 

366.  What  will  not  excuse  default  in  presentment  and  notice. 

367.  Transfer  by  delivery  as  security.      ' 

§  354.  War,  political  and  social  disturbances,  pesti- 
lence, conflagration,  floods,  etc. — Where  a  general  dis- 
turbance of  the  public  peace  and  quiet  is  sufficiently  great  to 
prevent  parties  from  attending  to  their  daily  duties  and 
affairs,  it  is  generally  held  to  excuse  a  failure  of  the  holder  to 
make  presentment  and  protest,  aud  to  give  notice  of  dis- 
honor. Thus,  the  breaking  out  of  war  between  the  countries, 
in  which  the  several  parties  reside,  puts  an  end  to  all  com- 
mercial intercourse  between  those  parties.  If,  therefore, 
one  party  had  to  make  presentment  and  protest  to  the  other, 
and  to  give  notice  of  dishonor,  he  is  excused  from  doing  so  as 
610 


i 


CH.  XVIII.]      EXCUSES    FOR    NON-PRESENTMENT,    ETC.       §    354 

long  asthe  war  continues.^  The  same  rule  is  followed,  where 
a  part  of  the  country  is  occupied  by  the  military  forces  of 
the  enemy,  and  commercial  intercourse  between  the  two 
sections  is  thus  interrupted.  As  long  as  the  military  oc- 
cupation lasts,  the  holder  will  be  excused  from  making  the 
presentment  or  protest,  or  from  sending  the  notice.^  And 
so,  also,  when  the  government  of  one  country  interdicts  all 
commerce  and  intercourse  between  its  citizens  and  the  citi- 
zens of  another  country,  it  has  the  effect  of  excusing  the 
want  of  presentment,  protest  and  notice.^  The  parties  to 
commercial  paper  will  also  be  excused  from  performing 
their  duties,  arising  out  of  the  paper,  if  they  are  prevented 
by  a  riot  or  insurrection.  These  and  other  public  disturb- 
ances may  be  so  great  as  to  necessarily  suspend  all  kinds 
of  business,  and  in  such  cases  the  holder  of  maturing  paper 
is  excused  from  making  presentment  and  giving  notice  of 
dishonor.  But  the  disturbance  must  be  sufficiently  great 
to  prevent  the  transaction  of  business.* 

The  same  conclusion  is  also  reached,  where  business  is 
suspended  on  account  of  the  prevalence  of  an  epidemic  of 
some  contagious  disease,®  or  some  other  unavoidable  over- 

1  Scholefield  v.  Eichelberger,  7  Pet.  586;  United  States  v.  Grossmeyer, 
9  Wall.  75;  Alexander's  Cotton,  2  Wall.  404;  The  William  v.  Bagaley,  5 
Wall.  377;  Patience  v.  Townsley,  2  J.  P.  Smith,  224;  Berry  v.  Southern 
Bank,  2  Duv.  379;  Bell  v.  Hall's  Exrs.,  2  Duv.  288;  James  v.  Wade,  21 
La.  Ann.  548;  Shaw  v.  Neal,  19  La.  Ann.  156;  Rynum  v.  Apperson,  9 
Heisk.  632;  Billgerry  v.  Branch,  19  Gratt.  393;  Farmer's  Bank  v.  Gun- 
nell,  26  Gratt.  132;  McVeigh  v.  Bank  of  Old  Dominion,  26  Gratt.  785; 
House  V.  Adams,  48  Pa.  St.  261;  Apperson  v.  Union  Bank,  4  Cold.  445; 
Morgan  v.  Bank  of  Louisville,  4  Bush,  82;  Norris  v.  Despard,  38  Md. 
491;  Durdeu  v.  Smith,  44  Miss.  548. 

2  Polk  V.  Spinks,  5  Cold.  431;  Tardy  v.  Boyd,  26  Gratt.  632;  Blair  & 
Hage  V.  Wilson,  28  Gratt.  172. 

s  Story  on  Notes,  §§  257,  263;  1  Parsons'  N.  &  B.  461;  2  Daniel's 
Negot.  Inst.,  §  1063. 

*  Apperson  v.  Union  Bank,  4  Cold.  446;  Story  on  Notes,  §  261;  2 
Daniel's  Negot.  Inst..  §  1065.     See  Blair  &  Hage  v.  Wilson,  28  Gratt.  172. 

5  1  Parsons'  N.  &  B.  460,  531 ;  Story  on  Bills,  §  308;  Story  on  Notes,  § 

<)11 


§    355      EXCUSES   FOR   NON-PRESENTMENT,    ETC.      [CH.  XVIII. 

whelming  public  calamity,  such  as  a  flood  or  conflagratioD.^ 
But  the  public  calamity  must  be  such  as  to  absolutely  pre- 
vent the  transaction  of  business  in  order  to  operate  as  an 
excuse  for  the  want  of  presentment,  protest  and  notice.^ 

But  whenever  the  impediment  to  the  performance  of 
these  duties  is  removed,  it  is  the  duty  of  the  holder  to  make 
presentment  and  protest,  and  to  give  out  notices  of  dis- 
honor, in  order  to  hold  the  drawer  and  indorsers.  And  he 
has  a  reasonable  time  after  the  removal  of  the  impediment 
in  which  to  do  these  things.^  What  is  a  reasonable  time  is 
of  course  difficult  to  determine.  In  one  case,  several 
months  after  the  removal  were  held  to  be  an  unreasonable 
delay.*  In  another  case,  five  months  delay  was  held  to  be 
unreasonable.^  On  the  other  hand,  ten  days  delay  was  held 
to  be  reasonable.^  It  was  said  in  Maryland,  "  There  must 
be  the  earliest  possible  presentment  when  impediment 
ceased." ^ 

§  355.  Drawing  witlioiit  riglit  to  expect  acceptance 
and  payment.  —  If  one  draws  on  another  without  havin(y 


260;  Tunno  •?;.  Lague,  2  Johns.  Cas.  1.     See   Roosevelt  v.  Woodhull,  2 
Anth.  (N.  Y.)  60. 

1  Thompson  on  Bills,  280,  368;  Story  on  Notes,  §  258;  Story  on  Bills, 
§§  283,  286,  308,  327,  365;  Chitty  on  Bills  (13  Am.  ed.),  [*451]  509; 
Hilton  V.  Sliepherd,  6  East,  16;  Windham  Bauls  v.  Norton,  22  Conn.  213. 

2  Story  on  Bills,  §  283;  2  Daniel's  Negot.  Inst.,  §  1069. 

8  House  V.   AdamSj  48  Pa.   St.  26G;  Shaw   v.    Neal,  19   La.   Ann.  156 
James -y.   Wade,  21  La.  Ann.  548;  Billgeny   v.    Branch,    19   Gratt.    393 
Farmers'  Bank  v.  Gannell,   26  Gratt.  132;  Tarby  v.  Boyd,  26  Gratt.  631 
McVeigh  t;.    Banlc  of  Old  Dominion,    26  Gratt.  785;  Morgan  v.  Bauli  of 
Louisville,  4  Bush,  82;    Dunbar  v.  Tyler,  44  Miss.  10;  Durden  w.  Smith, 
44   Miss.  552;  Lane  V.  Bank  of  W.  Tenn.,  9   Heisk.   419;    Apperson   v. 
Union  Bank,  4  Cold.  445;  Teter  v.  Hobbs,  25  Ark.  67;  Bynum  v.  Apper- 
son, 9  Heisk.  632;  Norris  v.  Despard,  38  Md.  491. 

*  Durden  v.  Smith,  44  Miss.  552.    See  Dunbar  v.  Tyler,  44  Miss.  10. 

fi  Morgan  v.  Bank  of  Louisville,  4  Bush,  82. 

e  House  v.  Adams,  48  Pa.  St.  266. 

7  Norris  v.  Despard,  38  Md.  491. 
612 


CH.  XVIII.]      EXCUSES    FOR    NOX-PRESEXTMENT,    ETC.       §    355 

reasonable  grounds  to  expect  that  the  bill  will  be  honored, 
the  drawer  cannot  require  presentment  and  notice  of  dis- 
honor. Some  of  the  cases  are  inclined  to  hold  that  in  any 
case,  the  drawer  may  require  presentment,  although  he 
cannot  reasonably  expect  the  bill  to  be  honored,  possibly 
on  the  ground  that  the  unexpected  always  happens  ;i  but  the 
better  and  prevailing  opinion  is  that  in  such  a  case  both 
presentment  and  notice  of  dishonor  are  excused  as  to  the 
drawer. 2  But  such  a  fact  would  not  excuse  presentment 
and  notice,  as  to  indorsers,  unless  the  indorsers  have 
indorsed  for  the  accommodation  of  the  drawer,  with  knowl- 
edge of  the  fact  that  the  drawer  has  no  right  to  expect 
acceptance  and  payment.  If  the  indorsers  have  such  knowl- 
edge, they  cannot  require  presentment  and  notice  any  more 
than  can  the  drawer.^  But  if  they  know  nothing  of  the  re- 
lation between  the  drawer  and  drawee,  they  may  in  such 
cases  require  the  presentment  and  notice,  although  the 
drawer  cannot,*  Where  the  drawer  has  supplied  the  drawee 
with  collaterals  to  secure  the  payment  of  the  amount  of  the 
bill  he  is  entitled  to  presentment  and  notice.^ 

1  Cruger  u.  Armstrong,  3  Johns.  5;  English  v.  Wall,  12  Rob.  (La.) 
1312. 

2  Terry  v.  Parker,  6  A.  &  E.  502;  1  Nev,  &  P.  752 ;  Bond  v.  Farnham,  5 
Mass.  171;  Kinsley  v.  Robinson,  21  Pick.  327;  Harker  v.  Anderson,  21 
Wend.  372;  Dollfus  v.  Frosch,  1  Denio,  307;  Mobley  v.  Clark,  28  Barb. 
390;  Wood  v.  Gibbs,  35  Miss.  559.  See  Franklin  v.  Vanderpool,  1  Hall, 
78;  Adams  v.  Darby,  28  Mo.  162. 

3  French  v.  Bank  of  Columbia,  4  Cranch,  141 ;  Foster  v.  Parker,  2  Law 
R.  C.  P.  Div.  18;  Farmers'  Bank  v.  Vanmeter,  4  Rand.  553. 

*  Ralston  v.  Bullitts,  3  Bibb,  261;  Bogy  v.  Keil,  1  Mo.  743;  Jackson  v. 
Richards,  3Caines,  313;  Wilkes  v.  Jacks,  Peake,  202;  French  v.  Bank  of 
Columbia,  4  Cranch,  141;  Scarborough  v.  Harris,  1  Bay,  177;  Croton  v. 
Dalheim,  6  Greenl.  476;  Lisson  v.  Tomlinson,  Selw.  N.  P.  335;  Bamdul- 
lolday  V.  Darieux,  4  Wash.  C.  C.  61.  And  they  are  presumed  to  know 
nothing  of  such  matters.  Carter  v.  Flower,  16  M.  &  W.  743;  Browne. 
Maffy,  15  East,  216;  Warder  v.  Tucker,  7  Mass.  449;  Rea  v.  Dorrance,  18 
Me.  137. 

^  Spooneru.  Gardiner,  Ry.  &  Mood.  84;  Campbell  v.  Pettingill,  7 
Greenl.  126;  Ex  parte  Heath,  2  Ves.  &  B.  240. 

613 


§    355       EXCUSES    FOR    NOX-PRESENTMENT,    ETC.      [CH.  XVIII, 

If  the  drawer  has  funds  in  the  hands  of  the  drawee,  he  is 
conclusively  presumed  to  have  the  right  to  expect  his  bill 
to  be  honored,  although  the  drawee  had  notified  the  drawer 
to  provide  for  its  payment,^  or  not  to  draw  on  him ;  ^  and 
so,  also,  where  the  drawer  is  indebted  to  the  drawee  in  a 
different  transaction  in  a  larger  amount  than  in  which  the 
latter  is  his  debtor,-^  or  where  the  funds  in  the  hands  of  the 
drawee  have  been  attached  or  levied  upon,  after  the  bill  had 
been  drawn.*  The  drawer  is  also  entitled  to  presentment  and 
notice,  Avhere  there  is  a  running  account  between  him  and 
the  drawee,  although  the  balance  may  be  somewhat  less 
than  the  amount  of  the  bill.^  But  while  the  insufficiency 
of  the  funds  in  the  hands  of  the  drawee  may  be  very  great 
without  affecting  the  right  to  expect  presentment  and 
notice,®  if  the  insufficiency  becomes  so  great  that  the 
drawer  could  not  reasonably  expect  the  drawee  to  honor  the 
bill,  he  is  not  entitled  to  presentment  and  notice.^  But  the 
want  of  funds  will  be  no  excuse  for  the  failure  to  make  due 

1  Prideaux  v.  Collier,  2  Stark.  57;  Staples  v.  Okines,  1  Esp.  332;  Clegg 
V.  Cotton,  3  Bos.  &P.  239. 

2  Cedar  Falls  Co.  v.  Wallace,  83  N.  C.  229. 
8  Blackhara  v.  Doren,  2  Camp.  N.  C.  503. 
*  Stanton  v.  Blossom,  14  Mass.  IIG. 

^  Thackray  v.  Blackett,  3  Camp.  164;  Leggew.  Thorpe,  12  East,  171; 
Chitty  on  Bills  (13  Am.  ed.),  [*444].  The  same  rule  would  apply  where, 
on  account  of  a  shrinkage  in  value,  or  of  some  other  loss,  the  value  of 
the  property,  in  the  hands  of  the  drawee,  against  which  the  bill  was 
drawn,  was  less  than  the  amount  of  the  bill.  Kobinson  v.  Ames,  20 
Johns.  140;  Rucker  v.  Hiller,  16  East,  53;  Robins  v.  Gibson,  3  Camp. 
384;  Williams  v.  Brashear,  19  La.  370. 

6  In  one  case,  the  bill  was  for  $2,777,  and  the  balance  was  $883,  La 
Coste  V.  Harper,  3  La.  Ann.  385.  See  also  Rutcliffe  v.  McDowell,  2  Nott 
&  McC.  251;  Wollenleber  v.  Ketterlinus,  17  Pa.  St.  389. 

■^  In  one  case,  the  amount  of  the  bill  was  £246  3s.  7d.,  and  the  bal- 
ance was  16s.,  held  not  entitled  to  notice,  unless  there  were  other  cir- 
cumstances in  the  case  which  would  justify  him  in  expecting  the  bill  to 
be   honored.     Hopkirk  v.   Page,  2  Brock.  C.  C.  20,  34,  Marshall,  C.  ,1. 

See  also  Blankenship  v.  Rogers,  lOInd.  33;  v,  Stanton,  1  Hayw. 

271 ;  Matter  of  Bro^ra,  2  Story,  502,  520. 
614 


CH.  XVIII.]      EXCUSES    FOR    NON-PRESENTMENT,    ETC.       §    355 

presentment  and  notice,  if,  notwithstanding  such  want  of 
funds,  the  drawer  had  a  right  to  expect  the  bill  to  be  hon- 
ored.^ 

The  want  of  funds  is  also  no  excuse  for  the  want  of  pre- 
sentment and  notice,  where  the  drawer  drew  the  bill  for 
the  accommodation  of  the  acceptor  or  of  the  payee  or  sub- 
sequent indorsee.^ 

The  acceptance  of  the  bill  certainly  raises  a  strong 
presumption  in  favor  of  the  right  to  expect  the  bill  to  be 
honored,  and  consequently  of  his  right  to  expect  present- 
ment for  payment  and  notice  of  non-payment.^  But, 
although  the  presumption  has  been  held  to  be  conclusive,* 
the  better  rule  seems  to  be  that  it  may  be  shown  by  the 
proof  of  other  facts  that  the  drawer,  notwithstanding  the 
acceptance,  could  not  reasonably  expect  the  drawee  to  pay 
the  bill.5 

1  As  when  he  draws  upon  a  consignment  not  yet  come  to  hand, 
Dickens  v.  Beal,  10  Pet.  572;  Grosvenor  v.  Stone,  8  Pick.  78;  where  the 
drawee  has  been  in  the  habit  of  honoring  the  bills  of  the  drawer  for  the 
latter's  accommodation.  Adams  v.  Darby,  28  Mo.  162;  Dunbar  v.  Tyler, 
44  Miss.  1 ;  Dickens  v.  Beal,  10  Pet.  572;  where  he  has  expressly  author- 
ized the  drawing  of  the  bill,  Walwyn  v.  St.  Quintin,  1  Bos.  &  P.  652; 
Orear  «.  McDonald,  9  Gill,  350;  Hopkirk  v.  Page,  2  Brock.  20;  Dickens 
V.  Beal,  10  Pet.  574:  Oliver  v.  Bank  of  Tenn.,  11  Humph.  74;  or  where  a 
third  party  had  promised  to  supply  the  funds.  Dickens  v.  Beal,  supra; 
French  v.  Bank  of  Columbia,  4  Cranch,  141;  Lafltte  v.  Slatter,  6  Bing, 
623;  4  Moore  &  P.  457.  See  also  Miser  v.  Trovinger,  7  Ohio  St.  281; 
Schuchardt  v.  Hall,  36  Md.  600;  Farmers'  Bank  v.  Vanmeter,  4  Rand. 
553;  Golladay  v.  Bank  of  Union,  2  Head,  557;  Welch  ??.  B.  C.  Taylor 
Mfg.  Co.,  82  111.  581;  McRea  v.  Rhodes,  22  Ark.  315;  Louisiana  St.  Bank 
V.  Buhler,  22  La.  Ann.  83 ;  Claridge  v.  Dalton,  4  Maule  &  S.  226 ;  Oliver 
V.  Bank  of  Tennessee,  11  Humph.  74. 

2  Ex  parte  Heath,  2  Ves.  &  B.  240 ;  Corey  v.  Scott,  3  B.  &  Aid,  619 ; 
Norton  v.  Pickering,  8  B.  &  C.  610;  Brown  v.  MafEey,  15  East,  216  ;  Whit- 
field V.  Savage,  2  Bos.  &  Pul.  277. 

3  Orear  v.  McDonald,  9  Gill,  350;  Campbell  u.  Pettingill,  7  Greenl. 
126;  Hill  V.  Norris,  2  Stew.  &  P.  114. 

*  Pons  V.  Kelly,  2  Hayw.  45;  Richie   v.  McCoy,  13  Sm.  &  M.  541. 
'"  Kinsley  v.  Robinson,  21  Pick.  327;  Hoffman  v.  Smith,  1  Caiues,  157; 
Allen  V.  King,  4  McLean.  128;  Mobley  u.  Clark,  28  Barb.  390. 

615 


§    355       EXCUSES    FOR    NON-PRESENTMENT,    ETC.       [cil.  XVHI. 

This  is  particuUirU'  the  case  where  the  bill  has  been 
drawn  for  the  mere  accommodation  of  the  drawer,  and  it  is 
agreed  between  the  parties  that  the  drawer  should  provide 
funds  for  the  payment  of  the  bill.  In  such  a  case  the 
drawer  is  not  entitled  to  presentment  and  notice.^  And  the 
same  is  true,  where  the  bill  is  payable  at  the  drawer's  own 
house  or  place  of  business. ^  The  indorser  is.  also,  not  en- 
titled to  presentment  and  notice,  if  the  paper  is  issued  for 
his  accommodation,  and  it  is  his  duty  to  provide  for  pay- 
ment.^ 

The  same  is  also  true,  if  the  drawer  or  indorser  has  been 
provided  by  the  acceptor  or  maker  with  the  means  of  taking 
up  the  bill  or  note.*  But  if  the  bill  is  negotiated  for  the 
accommodation  of  the  acceptor,  presentment  and  notice 
are  due  to  both  the  drawer  and  the  drawee.® 

"Where  the  expectation  of  the  honor  of  the  bill  rests  upon 
the  possession  of  funds  by  the  drawee,  in  order  that  the 
drawer  may  claim  the  right  to  presentment  and  notice,  it 
must  be  shown  that  the  funds  were  in  the  hands  of  the  drawee 
when  the  bill  was  drawn,^  or  that  the  drawer  had  reasonable 
grounds  for  expecting  that  the  funds  would  be  placed  in  the 
hands  of  the  drawee  before  presentment.^     If  the  drawer 

1  French  v.  Bank  of  Columbia,  4  Cranch,  141;  Holman  v.  "Whiting,  19 
Ala.  703;  Koss  v.  Bedell,  5  Duer,  462;  Ex  parte  Heath,  2  Ves.  &  B.  240; 
Sharp  V.  Bailey,  9  B.  &  C.  44;  Barbaroux  v.  Waters,  3  Met.  304 ;  Torrey  v. 
Foss,  40  Me.  74. 

2  Sharp  V.  Bailey,  9  B.  &  C.  44. 

3  Sharp  V.  Bailey,  9  B,  &  C.  44;  French  v.  Bank  of  Columbia,  4  Cranch, 
141;  Turners.  Sampson,  2  Q.  B.  Div.  23  (19  Moak's  E.  R.  195);  Keyes 
V.  Winter,  54  Me.  400;  McVeigh  v.  Bank  of  Old  Dominion,  20  Gratt.  785. 

4  Ray  V.  Smith,  17  Wall.  418;  Wright  r.  Andrews,  70 Me.  86;  Bondu. 
Farnham,  5  Mass.  170;  Cornay  v.  Da  Costa,  1  Esp.  302;  Watkins  v. 
Cranch,  5  Leigh,  522;  May  r.  Boisseau,  8  Leigh,  185,  196. 

5  French  v.  Bank  of  Columbia,  4  Cranch,  141,  Marshall,  C.  J. 

6  French  v.  Bank  of  Columbia,  10  Pet.  572. 

'  Robins  v.  Gibson,  3  Camp.  334;  Hammond  v.  Dufresne,  3  Camp. 
145;  Orear  v.  McDonald,  9  Gill,  350;  Eichelberger  v.  Finley,7  Har.  &  J. 
381. 

616 


CH.  XVIII.]      EXCUSES    FOR    NON-PRESENTMENT,    ETC.       §    357 

withdraws  the  funds  before  the  presentment,  or  counter- 
mands the  payment,  he  forfeits  his  right  to  presentment  and 
notice,^  unless  he  makes  some  other  provision  for  the  honor 
of  the  bin.2 

§  356.  What  relations  between  the  parties  will  ex- 
cuse want  of  presentment  and  notice.  — Where  the  drawer 
and  the  drawee  of  a  bill  are  the  same  person,  there  is 
no  need  for  presentment  or  notice.^  And  so,  also,  where 
a  partner  draws  on  his  firm,  or  the  firm  on  a  partner,* 
unless  the  firm  has  been  dissolved,  when  notice  would  be 
necessary.^  Where  two  firms,  having  one  or  more  common 
members,  draw  on  each  other,  notice  of  dishonor  is  not 
necessary,®  although  presentment  is  required.'^ 

§  357.  When  note  is  void.  — It  is  very  generally  held 
that  when  a  note  is  void  as  between  the  maker  and  payee, 
and  the  indorser  knows  it,  the  indorser  is  not  entitled  to 
demand  and  notice,  for  the  reason  that  the  indorser 
guarantees  the  obligation  of  the  maker;  and  if  he  indorses 
a  note  which  he  knows  to  be  void  as  to  the  maker,  it  w^ould 

1  Dickens  v.  Beal,  10  Pet.  572;  Rhett  v.  Poe,  2  How.  457;  Rucker  v. 
Hiller,  3  Camp.  217;  Sutcliffe  v.  McDouald,  2  Nott  &  McC.  251;  Conroy 
V.  Warren,  3  Johns.  259 ;  Murray  v.  Judah,  6  Cow.  484 ;  Valk  v.  Sim- 
mons, 4  Mason,  113. 

2  Orr  V.  McGinness,  7  East,  359. 

3  Manx  Ferry  Co.  v.  Branegan,  40  Ind.  361;  Fairchild  v.  Ogdensburg 
R.  R.  Co.,  15  N.  Y.  357;  Bailey  v.  Southwestern  Bank,  11  Fla.  266.  But 
see  2  Ames'  N.  &  B.  462. 

^  Rhett  V.  Poe,  2  How.  457;  New  York,  etc.,  Co.  v.  Meyer,  51  Ala.  325; 
Porthouse  v.  Parker,  1  Camp.  82;  Fuller  v.  Hooper,  3  Gray,  334;  Taylor 
V.  Young,  3  "Watts,  339;  Gowan  v.  Jackson,  20  Johns.  176. 

5  Taylor  v.  Young,  3  Watts,  339. 

^  New  York,  etc.,  Co.  v.  Selma  Sav.  Bank,  51  Ala.  305;  "West  Branch 
Bank  v.  Fulmer,  3  Pa.  St.  399.  See  Porthouse  v.  Parker,  1  Camp.  82.  See 
also  contra,  1  Parsons'  N.  &  B.  523. 

'  Dwight  V.  Scovil,  2  Conn.  654;  Poland  v.  Boyd,  23  Pa.  St.  476; 
Caunt  V.  Thompson,  7  Man.  G.  &  S.,  400;  1  Parsons'  N.  &  B.  523. 

617 


§    358       EXCUSES    FOR    NON-PRESENTMENT,    ETC.       [CH.  XVIII. 

be  a  fraud  upon  the  indorsee  to  require  him  to  make  pre- 
sentment or  to  give  notice.^  But  it  has  been  held  that  the 
indorser  must  know  of  the  illegahty  of  the  note,  in  order  to 
dispense  with  presentment  and  notice.^  It  has,  however- 
been  held  that  it  is  not  necessary  for  the  indorser  to  have 
knowledge  of  the  illegality  of  the  note,  in  order  to  excuse 
want  of  presentment  and  notice,  at  least,  in  order  to  enable 
the  indorsee  to  recover  of  him  the  consideration  paid.^ 
But  the  accommodation  indorser  is  always  entitled  to 
presentment  and  notice,  if  he  does  not  know  of  the  in- 
validity of  the  note.* 

§   358.  Inability  to  discover  the  address  of  parties. — 

The  want  of  due  presentment  or  due  notice,  will  be  ex- 
cused by  the  fact  that  the  holder  cannot  find  out  the  ad- 
dress of  the  party  to  whom  presentment  is  to  be  made,  or 
notice  given.  If  due  diligence  has  been  exercised  in  the 
endeavor  to  ascertain  the  address,  the  holder  will  be  ex- 
cused, and  can  hold  the  parties  secondarily  liable  without 
presentment  or  notice.^  But  the  inability  to  find  the 
maker  or  acceptor  will  only  excuse  the  want  of  present- 
ment. Notice  of  dishonor  should  at  all  events  be  sent  to 
the  drawer  and  indorsers,  unless  they  cannot  be  found. ^ 

1  Copp  V.  M'Dugall,  9  Mass.  1 ;  Turnbull  v.  Bowyer,  40  N.  Y.  456  ; 
Cundy  v.  Marriott,  1  B.  &  Ad.  696;  Burrill  v.  Smith,  7  Pick.  291;  Farm- 
ers' Bank  v.  Vanmeter,  4  Rand.  553;  1  Parsons'  N.  &  B.  445,  460;  Per- 
kins V.  White,  36  Ohio  St.  530;  Wilson  v.  Vysar,  4  Taunt,  218;  Morrison 
u.  Lovell,  4  W.  Va.  346;  Bissell  v.  Bozman,  2  Dev.  Eq.  154;  Butler  u. 
Slocomb,  33  La.  Ann.  170. 

2  Wyman  V.  Adams,  12  Cush.  210;  Leach  v.  Hewitt,  4  Taunt.  731;  1 
Parsons'  N.  &  B.  444,  note.  See  Carter  v.  Flower,  16  M.  &  "W.  747; 
Farmers'  Bank  v.  Vanmeter,  4  Rand.  561, 

3  1  Parsons'  N.  &  B.  560;  2  Daniel's  Negot.  Inst.,  §  1113a. 
*  Susquehanna  Valley  Bank  v.  Loomis,  85  N.  Y.  207. 

5  Garvierw.  Downie,  33  Cal.  176;  Bateraan  v.  Joseph,  2  Camp.  463;  12 
East,  433. 

6  1  Parsons'  N.  &B.  527;  2  Daniel's  Negot.  Inst.,  §  1120;  May  v.  Coffin, 
4  Mass.  341. 

(;i8 


CH.  XVIII.]      EXCUSES    FOR   NON-PRESENTMENT,    ETC.       §    358 

But  this  inability  only  furnishes  an  excuse  for  the  want 
of  presentment  and  notice,  as  long  as  it  continues;  and  the 
holder  is  obliged  to  make  presentment  or  to  give  notice,  as 
soon  as  he  finds  the  parties. ^  Where  the  maker  or  accept- 
or has  permanently  left  his  domicile ;  and  established  an- 
other in  the  same  State  or  country,  presentment  should 
be  made  as  soon  as  the  new  domicile  is  discovered. ^  But 
if  the  new  domicile  is  acquired  in  a  different  State  or  coun- 
try, the  holder  is  not  required  to  go  out  of  the  State  to 
make  presentment  in  the  new  domicile  ;  but  he  satisfies  the 
law  by  making  a  demand  at  the  payor's  last  place  of 
residence  or  business.^  And  for  these  purposes,  the  States 
of  the  American  Union  are  considered  as  foreign  to  each 
other.* 

Where  the  payor  has  absconded,  and  particularly  when 
he  is  notoriously  insolvent,  it  is  not  necessary  to  make  pre- 
sentment anywhere,  not  even  at  the  old  place  of  business 
or  residence.^     Where  the  drawer,  or  indorser  has  himself 

1  Browning  v.  Kinuear,  Gow.  81 ;  Bateman  v.  Joseph,  2  Camp.  461 ; 
Baldwin  v.  Kichardson,  1  B.  &  C.  245;  Firth  v..  Thrush,  8  B.  &  C.  387; 
Sturgis  V.  Derrick,  Wight,  76.  But  see  ante,  §§  314,  340,  for  a  discussion 
of  the  duty  of  the  holder,  when  the  place  of  business  or  residence  of  the 
party  is  temporarily  closed. 

2  Louisiana  Ins.  Co.  v.  Shambnrgh,  7  Mart.  (n.  s.)  260;  Anderson  v. 
Drake,  14  Johns.  114. 

3  McGruder  v.  Bank  of  "Washington,  9  Wheat.  598;  Adams  v.  Leland, 
30  N.  Y.  309 ;  Foster  v.  Julien,  24  N.  Y.  28 ;  Dennie  v.  Walker,  7  N.  H. 
199;  Reid  v.  Morrison,  2  Watts  &  S.  401;  Wheeler  v.  Field,  6  Met.  290; 
Grafton  Bank  v.  Cox,  13  Gray,  503;  Gillespie  v.  Hannahan,  4  McCord,  503; 
Herrick  i;.  Baldwin,  17  Minn.  209;  Cromwell  v.  Hynson,  2  Esp.  211; 
Taylor  v.  Snyder,  3  Den.  145;  Anderson  v.  Drake,  14  Johns.  114;  Gist  v. 
Lybrand,  3  Ohio,  308;  Central  Bank  v.  Allen,  16  Me.  41;  Whittier  v. 
Graham,  3  Greenl.  32. 

*  McGruder  v.  Bank  of  Washington,  9  Wheat.  598 ;  Gillespie  v.  Hana- 
han,  4  McCord,  503;  Widgery  t?.  Monroe,  6  Mass.  449.  But  see  contra 
Barker  v.  Clark,  20  Me.  156;  Phipps  v.  Chase,  6  Met.  491. 

*  Anon.,  Ld.  Raym,  743;  Lehman  v.  Jones,  1  Watts  &  S.  126;  Wolfe  v. 
Jewett,  10  La.  Ann.  383;  Duncan  v.  McCullough,  4  Serg.  &  R.  480;  Rat- 
cliffe  V.  Planters'  Bank,  2  Sneed,  425,  455;  Taylor  v.  Snyder,  3  Den.  145; 

619 


§    351)       EXCUSES    FOR    NON-PRESENTMENT,    ETC,       [CH.  XVIII. 

absconded,  the  notice  should  be  left  at  his  last  place  of  resi- 
dence, or  with  his  representative  or  attorney.*  And  where 
the  payor  has  only  absconded  to  some  place  within  the  same 
State,  presentment  is  only  excused,  as  long  as  his  new  place 
of  abode  cannot  be  found. ^ 

§  359.  What  Is  due  diligence  in  making  inquiries  after 
parties.  — In  making  inquiries  after  the  address  of  the 
parties  to  commercial  paper,  ordinary  diligence  is  required ; 
that  degree  of  diligence  which  may  be  expected  of  a  reason- 
ably prudent  man  under  the  circumstances.  And  if,  after 
the  exercise  of  reasonable  diligence,  the  party  cannot  be 
found,  or  a  wrong  address  has  been  obtained,  to  which  the 
notice  has  been  sent,  or  at  which  the  paper  was  presented  for 
payment,  the  holder  is  excused  from  further  presentment 
and  notice.^  Whenever  the  holder  in  his  inquiries  reaches 
a  reliable  person  who  professes  to  know  of  the  residence  or 
place  of  business  of  the  party,  it  is  not  necessary  for  the 
holder  to  make  further  inquiries,  although  the  information 
proves  to  be  erroneous.*  But  until  some  such  definite  in- 
formation is  received,  inquiry  must  be  made  first,  of  every 
other  party  to  the  paper ,^  and  finally,  of  every  one  else  who 

Gillespie  v.  Hanahan,  4  McCord,  503 ;  Bruce  v.  Rytle,  13  Barb.  163 ;  Hale  v. 
Burr,  12  Mass.  89;  Shaw  v.  Reed,  12  Pick.  132;  Putnam  v.  Sullivan,  4 
Mass.  45.  Contra  Pierce  w.  Gate,  12  Cush.  190;  Grafton  Bank  t?.  Cox, 
13  Gray,  504. 

1  Ex  parte  Rohde,  Mont.  &  M.  430;  1  Parsons'  N.  &  B.  528. 

2  Reid  V.  Morrison,  2  Watts  &  S.  401 ;  Duncan  v.  McCullough,  4  Serg. 
&  R.  480;  Redfield  &  Bigelow's  Cases,  339. 

3  Harris  v.  Robinson,  4  How.  33G;  Cent.  Nat.  Bank  v.  Adams,  11  S.  C. 
452;  Gawtry  v.  Doane,  51  N.  Y.  92;  Williams  v.  Bank  of  United  States,  2 
Pet.  100. 

*  Brighton  Market  Bank  v.  Philbrick,  40  N.  H.  506;  Bank  of  Utica  v. 
Bender,  21  Wend.  643;  Spencer  v.  Bank  of  Saliua,  3  Hill,  520;  Williams 
V.  Bank  of  United  States,  2  Pet.  100;  Harris  v.  Robinson,  4  How.  336; 
Gawtry  v.  Doane,  51  N.  Y.  92;  Central  Nat.  Bank  v.  Adams,  11  S.  C.  452. 

s  Wheeler  v.  Field,  6  Met.  290;  Porter  v.  Judson,  1  Gray,  175;  Grafton 
Bank  v.  Cox,  13  Gray,  505;  Hill  v.  Varnell,  2  Greenl.  233;  Gilchrist  v. 
620 


CH.  XVIII.]      EXCUSES    FOR    NON-PRESENTMENT,    ETC.        §    3(J0 

is  likely  to  know,  and  whose  statemeuts  in  reference  to  the 
matter  are  more  or  less  reliable.^  But  if  every  source  of 
information  has  been  resorted  to  without  avail,  then  the 
holder  is  excused  from  making  presentment  or  giving  no- 
tice, as,  for  example,  where  the  party  is  a  sailor,  and  has 
no  regular  place  of  abode  on  land.- 

§  360.  Sickness  and  death  of,  or  accident  to,  the 
holder.  —  The  sickness  and  death  of  the  holder,  as  well  as 
some  sudden  accident  or  injury  to  him,  happening  on  the 
eve  of  the  paper  maturing,  so  unexpectedly  that  provision 
could  not  be  made  for  the  presentment  and  demand,  have 
been  held  to  be  sufficient  excuses  for  the  failure  to  present 
or  to  give  notice,  provided  these  things  are  done  as  soon 
thereafter  as  is  possible.^  And  the  same  rule  has  been  fol- 
lowed, where  an  agent,  to  whom  the  paper  has  been  sent 
for  collection,  fails  to  present  and  to  give  notice  on  the 

Donnell,  53  Me.  591;  Weakly  v.  Bell,  9  Watts,  273;  Waters  v.  Brown,  15 
Md.  285;  Whitridge  v.  Rider,  22  Md.  558;  Earnest  v.  Taylor,  26  Tex. 
(Supp.)  37;  Harrison  v.  Robinson,  4  How.  336.  And  it  is  the  duty  of 
the  notary  to  make  inquiry  of  the  holder,  for  he  is  presumed  to  know,  at 
least,  of  the  residence  of  the  immediate  indorser.  Titler  v.  Morris,  6 
Whart.  406;  Haly  v.  Brown,  5  Pa.  St.  178;  Smith  v.  Fisher,  24  Pa.  St. 
222;  Lawrence  v.  Miller,  16  N.  Y.  235. 

1  Lambert  v.  Ghiselin,  9  How.  452;  Chapman  u.  Lipscombe,  1  Johns. 
294;  Ransom  v.  Mack,  2  Hill,  587;  Harris  v.  Robinson,  4  How.  336;  Bank 
of  Utica  V.  Bender,  21  Wend.  643;  Central  Nat.  Bank  v.  Adams,  11  S.  C. 
452;  Greenwich  Bank  v.  DeGroat,  14  N.  Y.  S.  C.  213  (7  Hun)  ;  Baer  w.  Lep- 
pert,  19  N.  Y.  S.  C.  516  ri2  Hun)  ;  Brighton  Market  Bank  v.  Philbrick, 
40  N.  H.  506;  Spencer  v.  Bank  of  Salina,  3  Hill,  520.  See  Peet  v.  Zan- 
ders, 6  La.  Ann.  364. 

2  Moore  v.  Coffleld,  1  Dev.  247;  Taylor  v.  Snyder,  2  Den.  145;  Dennie, 
17.  Walker,  7N.  H.  199;  Whittier  v.  Graffam,  3  Greenl.  82. 

s  Duggan  V.  King,  Rice,  239;  Aymar  v.  Beers,  7  Cow.  705;  White  v. 
Stoddard,  11  Gray,  258;  Hilton  v.  Shepherd,  6  East,  16;  Chitty  on  Bills 
(13th  Am.  ed.),  [*330,  451,  491]  370,  509,  556;  Story  on  Bills,  §308;  1  Par- 
sons'N.  &  B.  267;  Thompson  on  Bills,  280,  368;  as  to  the  appointment  of 
personal  representatives,  see  ante,  §  146. 

621 


§    3C)2       EXCUSES    FOR    NO\-PKESENTMENT,    ETC.      [CH.  XVIII. 

day  of  maturity,  on  account  of  his  sudden  illness  or  acci- 
dent. ^ 

§  3G1,  Delay  in  receipt  of  the  paper.  — If  the  paper  is 
sent  to  an  agent  for  collection,  or  transferred  for  consider- 
ation, so  near  to  the  day  of  maturity,  that  it  is  impossible 
to  present  for  payment  on  the  day  of  maturity,  the  present- 
ment and  notice  will  be  excused,  at  least  as  to  the  indorser 
who  had  caused  the  delay, ^  But  it  will  be  no  excuse  as  to 
the  prior  indorsers,  who  had  not  necessitated  the  delay .'^ 

§  3(32.  When  party  has  received  security  for  his  sec- 
ondary liability.  —  The  effect  of  the  drawer  or  indorser 
receiving  collateral  security,  from  the  acceptor  or  maker, 
upon  his  right  to  require  presentment  and  notice  is  very 
doubtful  in  the  lijjht  of  the  authorities.  Some  of  the  au- 
thorities  maintain  that  if  the  indorser  or  drawer  should  re- 
ceive an  assignment  of  all  the  property  of  the  maker  or 
acceptor,  he  could  not  require  presentment  and  notice, 
since  there  is  nothing  left  in  the  hands  of  the  primary 
obligor,  out  of  which  to  expect  payment.*  Other  authori- 
ties hold  that  presentment  and  notice  are  waived,  when- 
ever the  secondary  obligor  has  collateral  security  suflScient 
to  satisfy  the  debt,  whether  it  constitutes  all,  or  only  a  part 
of,  the  property  of  the  jirimary  obligor,  on  the  ground  that 

»  Pothier  De  Change,  n.  144;  Story  ou  Bills,  §309;  Chitty  on  Bills, 
509,  note  a. 

2  1  Parsons'  N.  &  B.  456;  Story  ou  Notes,  §§  203,  2G5;  2  Daniel's 
Negot.  lust.,  §  1124. 

3  Mason  v.  Pritchard,  9  Hei.sk.  798;  Story  ou  Notes,  §  265;  Thompson 
on  Bills,  297.     But  see  Chitty  on  Bills  [♦369],  440. 

4  Duvall  V.  Farmers'  Bank,  9  Gill  &  J.  31;  Watkius  v.  Croucli,  5 
Leigh,  522;  May  v.  Boisseau,  8  Leigh,  213;  Kramer  v.  Sandford,  4  Watts 
&  S.  328;  Bank  of  So.  Ca.  v.  Meyers,  1  Bailey,  412;  Swan  v.  Hodge,  3 
Head,  251 ;  1  Parsons'  N.  &  B.  560,  but  see  p.  571.  In  Watkins  v.  Crouch, 
supra,  it  is  held  that  it  is  not  necessary  for  the  property  to  be  sufficient  to 
satisfy  the  entire  debt,  in  order  to  have  this  effect. 

622 


CH.  XVIII.]       EXCUSES    FOR   NON-PRESENTMENT,    ETC.      §    362 

in  such  a  case,  the  primary  obligor  could  not  possibly  suffer 
any  damage  from  the  want  of  presentment  and  notice.^ 
And  Judge  Story  goes  so  far  as  to  hold  that  where  the  se. 
curity  is  only  partial,  it  will  be  a  waiver  pro  ianto  of  present- 
ment and  notice.-  But  the  cases  do  not  support  him  in 
this  extreme  view,  all  the  cases  requiring,  as  a  condition 
precedent  to  the  waiver  of  presentment  and  notice,  that  the 
security  shall  either  be  sufEcicnt  to  cover  the  liability,  or 
constitute  the  entire  property  of  the  primary  obligor.^  An 
attempt  is  made  to  distinguish  between  demand  and  notice, 
and  to  hold  that  an  insufficient  security  would  excuse  notice 
but  not  presentment.*  But  the  distinction  is  unsound  and 
does  not  meet  with  approval.^  But  the  better  opinion  is 
that,  in  order  that  the  possession  of  collateral  security  by 
an  indorser  or  drawer  will  relieve  the  holder  from  the  duty 
of  presentment  and  notice,  the  indorser  must  with  the  re- 
ception of  the  security  obligate  himself  to  see  to  the  pay- 
ment of  the  paper ;  otherwise  he  might  reasonably  presume 
from  the  silence  of  the  holder  that  the  paper  has  been  paid, 
and  thus  be  induced  to  part  with  the  security.  But  if  he 
has  undertaken  to    make    payment,  he  cannot  expect  the 

1  Marshall  v.  Mitchell,  35  Me.  221;  Durham  v.  Price,  SYerg.  300;  Kyle 
V.  Green,  14  Ohio,  495;  Develing  v.  Ferris,  18  Ohio,  170;  Beard  v.  "Wes- 
terman,  32  Ohio  St.  29;  Smith  v.  Lonsdale,  6  Ore.  157;  Stephenson  v. 
Primrose,  8  Port.  (Ala.)  155;  Barnett  v.  Charleston  Bank,  2  McMullan, 
191;  Walker  r.  Walker,  2  Eug.  (Ark.)  542;  3  Kent's  Com.  113. 

2  Story  on  Notes,  §  357. 

3  Burrows  v  Hanegau,  1  McLean,  309;  Second  Nat.  Bank  v.  McGuire, 
33  Ohio  St.  295;  Kyle  v.  Green,  14  Ohio,  495;  Wilson  v.  Senier,  14  Wis. 
580;  Woodman  u.  Eastman,  10  N.  H.  359;  Spencer  w.  Harvey,  17  Weud. 
489;  1  Parsons'  N.  &  B.  569,  570;  Watkins  r.  Crouch,  5  Leigh,  522;  Brun- 
son  V.  Napier,  1  Yerg.  199;  Holman  v.  Whiting,  19  Ala.  708.  In  Brandt 
Mickle,  28  Md.  436,  it  was  held  that  a  transfer  of  a  part  of  the  maker's 
property  to  the  indorser  of  the  note,  did  not  excuse  presentment 
and  notice,  even  though  it  constituted  all  the  property  the  maker  had 
when  the  note  fell  due. 

<  Watkins  v.  Crouch,  5  Leigh,  522. 
"  Denny  v.  Palmer,  5  Ired.  010. 

623 


§    3G2       EXCUSES    FOR    NON-PRESENTMENT,    ETC.      [CII.   XVIII. 

milker  or  acceptor  to  make  the  payment.^  Some  of  the 
cases  recognize  this  ruling  so  far  as  to  hold  that  the  recep- 
tion of  sufficient  security,  or  the  assignment  of  the  entire 
estate  of  the  acceptor  or  maker,  implies  the  promise  of  the 
drawer  or  indorser  to  see  to  the  payment  of  the  bill  or  note.^ 
The  taking  of  security  may  be  accompanied  by  circum- 
stances, "which  would  make  the  obligation  to  see  to  the  pay- 
ment a  necessary  implication,  as  where  the  property  was 
iriven  direct  to  the  indorser  and  he  was  directed  to  sell  the 
security  and  convert  it  into  money ,^  or  where  the  securi- 
ties are  readily  convertible  into  money.*  So,  also,  where 
there  has  been  a  confession  of  judgment.^  But  without 
these  special  circumstances,  the  receipt  of  security  raises 
no  presumption  of  a  promise  to  make  payment.  And  it 
has  been  held  to  be  no  excuse  for  the  want  of  presentment 
and  notice,  that  the  indorser  had  funds  of  the  maker  or  ac- 
ceptor, which  he  was  authorized  to  apply  to  the  payment, 
but  which  he  had  not  received  for  that  avowed  purpose,  nor 
promised  to  apply  to  that  purpose.^ 

Where  the  funds  or  securities  are  received  to  meet  a 
particular  indorsement  or  indorsements,  they  will  not  con- 
stitute an  excuse  for  the  want  of  presentment  and  notice  as 
to  any  other  indorsements.^ 

J  Bond  V.  Farnham,  5  Mass.  170;  Seacord  v.  Miller,  3  Ker.  55;  Taylor 
V.  French,  4  E.  D.  Smith,  458;  Creamer  v.  Perry,  17  Pick.  382;  Haskell 
V.  Boardman,  8  Allen,  39;  Holland  v.  Tiu'uer,  10  Conn.  308;  Moses  u,  Ela, 
43  N.  II.  5G0i  Mechanics'  Bank  v.  Griswold,  7  Wend.  KJS;  Woodman  v. 
Eastman,  ION.  H.  367. 

2  Watkins  u.  Crouch,  5  Leigh,  522;  Spencer  v.  Harvey,  17  Wend.  489; 
Barton  v.  Baker,  1  Serg.  &  R.  384 ;  Kramer  v.  Sandford,  4  Watts  &  S. 
328. 

'  Story  on  Notes,  §  282;  Denny  v.  Palmer,  5  Ired.  610;  May  v.  Bois- 
seau,  8  Leigh,  195. 

*  Dufour  V.  Morse,  9  La.  333;  Kramer  v.  Sandford,  4  Watts  &  S.  328. 

5  Richter  v.  Selin,  8  S.  &  R.  425. 

«  Ray  V.  Smith,  17  Wall.  416. 

'  Prentiss  ??.  Danielson,  5  Conn.  175;  Bond  v.  Farnnam,  5  Mass.  170. 
624 


CH.  XVIir.]       EXCUSES    FOU    NOX-PRESEXTMENT,    ETC.      §    3(53 

§  363.  Waiver  of  presentment  and  notice.  —  Since  the 
requirement  of  the  presentment  and  notiee  is  for  the  bene- 
fit of  the  parties,  they  may  agree  among  themselves  to 
waive  them.  The  waiver  may  be  couched  in  some  express 
agreement,  or  it  may  be  inferred  from  some  collateral 
agreement,  or  understanding.^  For  example,  if  any  party, 
in  indorsing  or  otherwise  signing  a  commercial  instrument, 
should  make  use  of  language  which  imposes  upon  him  the 
liability  of  a  guarantor,  it  will  impliedly  waive  presentment 
and  notice,  since  they  are  not  required  in  the  case  of  a 
guaranty.  This  construction  has  been  placed  upon  the 
words  "  accountable,"  "  eventually  accountable,"  ^  "  bold- 
en,"  ^  *'hold  ourselves  responsible  for  payment,"  ^  and 
the  like.^  Whether  particular  language  amounts  to  a 
waiver  or  not  has  been  held  by  the  Supreme  Court  of 
the  United  States  to  be  a  question  of  fact.^  But  the  Su- 
preme Court  of  Massachusetts  holds  that  it  becomes  a 
question  of  law,  as  soon  as  the  terms  used  acquire  by  long 
usasfe  a  settled  meanins;  in  the  law  merchant.^ 


1  Fuller  u.  McDonald,  8  Greeul.  213;  Bird  v.  Le  Blauc,  6  La.  Aun. 
470;  Wall  u.  Bry,  I  La.  Ann.  312;  Gregory  ??.  Allen,  Mart.  &Y.  Ti;  1 
Parsons'  N.  &B.  594. 

2  McDonalds.  Bailey,  14  Me.  101;  Burnham  v.  Webster,  17  Me.  50; 
Turber  v.  Caverly,  42  N.  H.  74. 

3  Bean  v.  Arnold,  16  Me.  251 ;  Blanchard  v.  Wood,  26  Me.  358. 

<  Blanc  V.  Mutual  Nat.  Bank,  28  La.  922.  See  Small  v.  Clarke,  51 
Cal.  22T. 

8  In  Airey  u.  Pearson,  37  Mo.  424,  the  language  was  as  follows:  "I 
assign  the  within  note  toj.  T.,  and  hold  myself  responsible  for  the 
payment  of  the  same,  the  maker  to  have  two  years  to  pay  the  same,  im- 
less  he  prefers  to  pay  sooner interest  on  the  same  to  be  paid  an- 
nually." 

6  Union  Bank  v.  Magruder,  7  Pet.  287.  See  Carmichael  v.  Bank  of 
Pennsylvania,  4  How.  (Miss.)  567. 

'  Creamer  v.  Perry,  17  Pick.  332,  Shaw,  Ch.  J. :  "  Though  questions 
of  due  diligence  and  waiver  were  originally  questions  of  fact,  yet  having 
been  reduced  to  a  good  degree  of  certainty  by  mercantile  usage,  and  a 
long  course  of  judicial  decision,  they  assume  the  character  of  questions 

40  G2o 


§    303       EXCUSES    FOR    NOX-PRESENTMENT,    ETC.       [CH.  XVIII. 

If  the  waiver  is  put  in  the  body  of-  the  instrument,  it 
enters  into,  and  forms  a  part  of  the  contract  of  every  one 
who  signs  his  name  to  the  paper,  whether  as  drawer  or  in- 
dorser.^  If  the  waiver  is  made  by  one  of  the  indor.sers  in 
writing  over  his  signature,  it  constitutes  simply  the  per- 
sonal waiver  of  that  indorser,  and  is  not  binding  upon  the 
other  indorsers,  who  do  not  become  a  party  to  the  waiver.^ 
At  least  that  is  the  opinion  of  the  majority,  although  the 
contrary  opinion  is  sustained  by  the  Supreme  Court  of 
Maine. -^ 

The  waiver  may  be  written  on  a  separate  paper,  and 
executed  before  or  after  the  indorsement.*  Whether  a 
verbal  waiver  will  bind  the  party  making  it,  is  doubtful, 
the  question  having  been  answered  both  in  the  aflSrmative  ^ 
and  in  the  negative;®  and  where  only  the  waiver  of  demand 

of  law ;  and  it  is  highly  important  that  they  should  be  so  deemed  and 
applied,  in  order  that  rules  affecting  so  extensive  and  important  a  de- 
partment in  the  transactions  of  a  mercantile  community  may  be  certain, 
practical  and  uniform,  as  well  as  reasonable,  equitable  and  intelli- 
gible." 

1  Bryant  v.  Merchants'  Bank,  8  Bush,  43;  Smith  v.  Lockridge,  8  Bush, 
423;  Farmers'  Bank  w.  Ewiug,  78  Ky.  2GG;  Lowry  v.  Steele,  27  Ind.  170. 
This  is  particularly  true  when  the  waiver  expressly  includes  the  in- 
dorsers.    Bryant  v.  Lord,  19  Minn.  397. 

2  Woodman  v.  Thurston,  BCush.  157;  Central  Bank  v.  Davis,  19  Pick. 
373;  Farmers' Bank  v.  Ewing,  78  Ky.  20(3;  May  v.  Boisseau,  8  Leigh, 
164;  Duffy  v.  O'Connor,  7  Baxt.  498;  Halley  v.  Jackson,  48  Md.  264. 

3  Parshley  v.  Heath,  G9  Me.  90. 

*  Duvall  V.  Farmers'  Bank,  7  Gill  &  J.  44;  Spencer  v.  Harvey,  17 
Wend.  489. 

5  Dye  V.  Scott,  35  Ohio  St.  194;  Boyd  v.  Cleveland,  4  Pick.  525;  Haz- 
ards. White,  26  Ark,  174;  Fuller  v.  McDonald,  8  Greenl.  213;  Lane  r. 
Steward,  20  Me.  98;  Taylor  v.  French,  2  Lea,  260;  Barclay  v.  Weaver,  19 
Pa.  St.  396. 

6  Beeler  v.  Frost,  70  Mo.  186;  Rodney  v.  Wilson,  67  Mo.  123,  Hough, 
J. :  "  We  think  the  policy  of  the  law  requires  that  the  paper  '  tell  its 
own  story.'  "  In  Maine,  required  by  statute,  to  be  in  writing.  Thomas 
V.  Mayo,  56  Me.  40.  See  2  Ames'  B.  &.  N.  133;  Barry  v.  Morse, 
3  N.  H.  132;  Hightower  v.  Ivy,  2  Port.  (Ala.)  308;  Kern  v.  Van  Phul,  7 
Minn.  74. 

820 


CH.  XVIII.]      EXCUSES    FOR    NOX-PRESENTMENT,    ETC.       §    303 

is  written,  parol  evidence  is  admissible  to  show  a  verbal 
waiver  of  notice.^ 

The  waiver  ma}^  be  made  by  any  party,  secondarily  liable 
on  the  paper,  or  by  his  duly  authorized  agent. "^  And  where 
tlie  paper  has  been  drawn  or  indorsed  by  a  firm,  any  one 
partner  may  waive  presentment  and  notice,  even  after  the 
dissolution  of  the  firm,^  unless  the  waiver  occurs  after 
maturity,  in  which  case  the  firm  has  been  already  dis- 
charged, and  the  waiver  would  constitute  a  new  promise  to 
pay;  and  this  a  partner  could  not  do,  so  as  to  bind  the  firm, 
after  dissolution.*  It  has  also  been  held  impossible  for  a 
partner  in  any  case,  after  dissolution,  to  bind  a  dormant 
partner  by  his  waiver  of  demand  and  notice.^ 

The  waiver  must  be  made  to  the  holder  of  the  paper.  It 
will  have  no  effect,  if  made  to  a  stranger.®  But  if  made  to 
the  holder,  it  will  inure  to  the  benefit  of  every  other  per- 
son to  whom  the  paper  is  subsequently  transferred.^ 

But  a  waiver  will  not  be  construed  to,  extend   beyond 

1  Drinkwater  v.  Tebbets,  16  Me.  17;  Mills  v.  Beard,  19  Cal.  161;  Ed- 
wards ou  Bills,  635. 

'  Standageu.  Creightou,  5  Car.  &  P.  406. 

^  Darling  v.  March,  22  Me.  184;  Star  Wagon  Co.  v.  Sweezey,  52  Iowa, 
394. 

*  Hart  V.  Long,  1  Rob.  (La.)  83. 

«  Mauney  V.  Coit,  80  N.  C.  300. 

«  Miller  v.  Hackley,  5  Johns.  375;  National  Bank  v.  Lewis,  50  Vt. 
622  (28  Am.  Rep.  514,  517)  ;  Deveudorfu.  West  Va.,  etc.,  L.Co.,  17  W.  Va. 
175;  Olendorf  v,  Swartz,  5  Cal.  580.  But  a  promise  to  pay  made  to  a 
stranger  is  held  to  be  evidence  that  there  had  been  due  presentment  and 
notice.  Potter  v,  Ray  worth,  18  East,  417,  Lord  EUenborough  saying: 
"  Whether  the  promise  to  pay  was  made  to  the  plaintiff,  or  to  any  other 
party  who  held  the  note  at  the  time,  it  was  equally  evidence  that  the  de- 
fendant was  conscious  of  his  liability  to  pay  the  note,  which  must  be  be- 
cause he  had  due  notice  of  its  dishonor." 

'  Kennon  v.  McRea,  7'Port.  (Ala.)  175;  Potter  r.  Rayworth,  13  East, 
417;  Guuson  v.  Metz,  1  B.  &  C.  193;  2  Dow.  &  R.  334;  Rogers  r.  Hackett, 
21  N,  H.  100.  See  Marshall  v.  Mitchell,  35  Me.  221 ;  Williams  v.  Brobst, 
10  Watts,  111 :  Devendorf  v.  West  Va.  L.  Co.,  17  W.  Va.  175;  Curtiss  v. 
Martin,  20  111.  557;  1  Parsons'  N.  &  B.  611. 

627 


§    3133       KXCUSKS    FOR    XOX-rKESEXTMENT,    I:TC.      [cU .  XVIII. 

the  fair  and  plain  intent  of  the  party.  Thus,  a  waiver  of 
notice,  simply,  will  not  include  by  implication  a  waiver  of 
demand.^  But  it  would  seem  that  the  waiver  of  demand 
would  include  a  waiver  of  notice,  since  there  can  be  no 
notice  of  dishonor,  if  there  be  no  demand;  although,  of 
course,  there  may,  without  demand,  be  a  notice  of  the  fact 
of  non-pa3^ment.2  A  waiver  of  protest  and  notice,  in  the 
case  of  foreign  bills,  is  held  to  include  a  waiver  of 
demand,^  and  even  the  waiver  of  protest  alone  has  been 
held  to  include  a  waiver  of  demand  and  notice.*  And  so, 
also,  will  the  waiver  of  protest  be  included  in  a  waiver  of 
demand  and  notice.^  Inasmuch  as  the  word  "protest" 
has  come  by  mercantile  usage  to  mean  more  than  the  official 
declaration  of  the  notary,  it  has  been  generally  held  that 
the  waiver  of  protest  in  the  case  of  inland  bills  and  notes 
will  have  the  effect  of  including  a  waiver  of  demand  and 
notice,  although,  the  technical  prot-est  is  not  required  to  lix 
the  liability  of  .parties  to  inland  paper.®     But  inasmuch  as 

>  Drinkwatev  v.  Tebbetts,  1 7  Me.  Id ;  Lane  v.  Steward,  20  Me.  98 ;  Berk- 
shire Bauk  V.  Joues,  6  Mass.  524:;  Scull  v.  Masou,  7  Wright,  99;  Phipson 
V.  Kneller,  1  Stark.  116;  4  Camp  285;  Backus  v.  Shipherd,  11  "Wend.  IC; 
Voorhees  v.  Atlee,  29  Iowa,  49;  Buchanan  v.  Marshall,  22  Vt.  561;  Burn- 
ham  V.  "Webster,  17  Me.  50;  Sprague  v.  Fletcher,  8  Ore.  387.  Contra, 
Matthey  v.  Gaily,  4  Cal.  02. 

2  Bryant  v.  Merchants'  Bank,  8  Bush,  43;  Porter  v.  Kemble,  53  Barb. 
867.  See  Blanc  v.  Mutual  Nat.  Bank,  28  La.  Ann.  921 ;  Forster  v.  Jusdison, 
16  East,  105;  Ridgeway  v.  Day,  13  Pa.  St.  288. 

^  Bryant  v.  Merchants'  Bank,  8  Bush,  43 ;  Baker  v.  Scott,  29  Kan. 
13G;  Gordons.  Montgomery,  19  Ind,  110. 

■•  Union  Bank  v.  Hyde,  6  "Wheat.  572;  City  Sav.  Bauk  u.  Hopson,  53 
Conn.  453;  Brown  v.  Hull,  33Gratt.  31;  Aunville  Xat.  Bank  v.  Kettering, 
lOGPa.  St.  531 ;  First  Nat.  Bank  v.  Hartman,— Pa.  St.  (1885)  —;  "Williams 
V.  Lewis,  69  Ga.  762;  Harrington  v.  Dorr,  3  Robt.  275;  Carmena  v.  Mix, 
15La.  165. 

5  "Woodman  r.  Thurston,  8  Cush,  157;  Nat..Exch.  Bauk  v.  Kimball,  66 
Ga.  753;  Jaccard  r.  Anderson,  37  Mo.  91;  Johnstons.  Searcy,  4  Yerg.  182. 

6  Coddington  v.  Davis,  1  Corast.  186;  3  Denio,  16;  Porter  v.  Kemball, 
53  Barb.  407;  Hood  v.  Hallerbeck,  UN.  Y.  S.  C.  (8  Hun)  364;  Jaccard  v. 
Anderson,  37  Mo.  91 ;  Fisher  v.  Price,  37  Ala.  407;  Carpenters.  Reynolds, 

628 


CH.XVIII.]       EXCUSES    FOR    KON-rRESENTMENT,    ETC.      §    364 

the  tecliuical  meaning  of  protest  does  not  include  demeind, 
and  in  the  case  of  inland  paper,  protest  is  not  required,  the 
position  assumed  by  the  Supreme  Court  of  the  United 
States  is  sounder  on  principle,  viz. :  that  the  scope  of  the 
waiver  is  ambiguous,  and  parol  evidence  is  admissible  to 
show  in  what  sense  the  word  protest  is  used.^ 

The  effect  of  the  waiver  wnll  not  be  altered  by  the  assign- 
ment of  unsatisfactory  reasons  for  the  same.^ 

§  364.  Waivers  made  after  execution,  and  before  ma- 
turity of  the  paper.  —  Waivers  may  be  made  after  the 
execution  of  the  paper,  or  after  its  indorsement,  and  it  will 
have  the  same  effect,  as  if  made  before  the  negotiation  of 
the  paper.  Where  it  is  done  before  maturity,  any  act  or 
language,  which  is  calculated,  when  addressed  by  the 
drawer  or  indorser  to  the  holder,  to  induce  the  holder  to 
dispense  with  demand  and  notice,  will  have  the  effect  of  a 
waiver.^  Such  would  be  any  announcement  of  the  useless- 
ness  of  making  presentment,*  requests  for  extension  of  the 
time  of  payment  by,  or  with  the  consent  of,  the  drawer 
or  indorser,^  and  distinct  promises  to  pay  or  assurances  of 

42  Miss.  807.  Contra,  .Ball  v.  Greand,  14  La.  Ann.  305;  Wall  v.  Bry,  1  La. 
Ana.  312 ;  Bird  v.  La  Blanc,  6  La.  Ann.  470,  overruled  by  Harvey  v.  Nelson, 
31  La.  Ann.  434.  (See  Brown  v.  Hull,  33  Gratt.  31;  Sprague  v.  Fletcher, 
8  Ore.  367.) 

1  Union  Bank  v.  Hyde,  6  Wheat.  572. 

2  Neal  V.  Wood,  23  lud.  524,  in  which  the  waiver  read:  "Notice, 
demand,  protest  and  due  diligence  waived  on  account  of  the  war  and 
insurrection." 

3  See  Boyd  v.  Bank  of  Toledo,  32  Ohio  St.  526;  Moyer's  Appeal,  87 
Pa.  St.  129. 

*  Miuturu  W.Fisher,  7  Cal.  573;  Hunter  v.  Hook,  64  Barb. 468;  Taylor 
V.  French,  4  E.  D.  Smith,  458. 

«  Ridgeway  v.  Day,  13  Pa.  St.  20g;  Barclay  v.  Weaver,  19  Pa.  St.  396; 
Amoskeag  Bank  v.  Moore,  37  N.  H.  539;  Farmers'  Bank  v,  Wakles,  4 
Harr.  (Del.)  429;  Spencer  v.  Harvey,  17  Wend.  489;  Hale  v.  Danforth, 
46  Wis.  555;  Lefflngwell  v.  White,  1  Johns.  Gas.  99;  Gove  v.  Vining,  7 
Mete.  212;  Sheldon  v.  Chapman,  31  N.  Y.  644;  Sheldon  r.  Horton,  53 
Barb.  23. 

629 


§    3()5       EXCUSES    FOR    NOX-PUESEXTMEXT,    ETC.       [cil.  XVIII. 

payment  ut  maturity.^  To  the  same  effect,  is  the  imposi- 
tion of  any  obstacle  in  the  way  of  payment,  as  where  one 
stops  the  payment  of  his  check  or  bill,^  or  where  the  in- 
dorser  prevents  its  presentment  at  maturity  by  retaining 
possession  of  the  bill,  until  after  maturit}'.^  Mere  attempts 
by  an  indorser  to  get  the  primary  obligor  to  pay  the  bill 
or  note,  will  not  constitute  a  waiver,*  unless  the  indorser 
undertook  to  present  the  paper  after  maturity.^ 

Not  only  will  such  acts  and  language  constitute  a  waiver 
when  made  use  of  before  maturity,  but  also  when  they 
occurred  on  the  very  day  of  maturity.^ 

§  365.  Waivers  after  maturity.  —  The  want  of  present- 
ment is  also  w'aived  where  the  drawer  or  indorser,  after 
maturity  and  with  knowledge  of  the  failure  to  make  due 
demand  and  protest  and  to  give  notice,  promises  to  pay  tho 
bill,^  or  makes  part  payment   of   the  same,  under  circum- 

1  Taunton  Bank  v.  Richardson,  5  Pick.  43G;  Whitney  v.  Abbott,  5  N. 
H.  378;  Bryan  v.  Wilcox,  49  Cal.  47;  Marsliall  v.  Mitcliell,  35  Me.  221; 
Leonardo.  Gary,  10  Wend. -504;  Bruce  v.  Lytle,  13  Barb.  163;  Lary  .-. 
Young,  8  Eng.  (Ark.)  401 ;  Boyd  v.  Bank  of  Toledo,  .32  Ohio  St.  52<  ; 
Backers  V.  Shepherd,  11  Wend.  629;  Sigerson  v.  Mathews,  20*Hov,. 
496, 

2  Purchase  v.  Mattison,  6  Duer,  587;  Jacks  v.  Darrin,  3  E.D.  Smilli, 
557;  Lilley  v.  Miller,  2  Nott  &  McCord,  257.  But  see  Hill  v.  Heap,  Dow. 
&  R.  N.  P.  57,  where  it  is  held  that  this  would  only  dispense  with 
notice. 

3  Havens  v.  Talbott,  11  Ind.  323. 
*  Cram  v.  Sherburne,  14  Me.  48. 

^  Hussey  v.  Freeman,  10  Mass.  84. 

6  Scott  u.  Greer,  10  Pa.  St.  103,  request  not  to  protest;  Barker  r. 
Barker,  6  Pick.  80,  statement  that  it  was  useless  to  demand;  Moyer's 
Appeal,  87  Pa.  St.  129,  request  for  indulgence;  Burgh  v.  Legge,  5  M.  & 
W.  418;  Ycager  v.  Farwell,  13  Wall.  12,  promises  to  pay;  Boyd  v.  Bank 
of  Toledo,  32  Ohio  St.  526;  Blanc  v.  Mutual  Bank,  28  La.  Ann.  921,  no 
demand  or  notice  is  required  at  the  expiration  of  the  extended  time ; 
Leary  v.  Miller,  61  N.  Y.  489,  an  excepted  renewal,  overruling  Cayuga 
Co.  Bank  v.  Dill,  5  Hill,  404. 

'  Sigerson  v.  Mathews,  20  How.  496;  Reynolds  v.  Douglass,  12  Pet. 
497;  Thornton  v.  Wynn,  12  Wheat.  183;  Yeager  v.  Falwell,  13  Wall.  12; 

630 


CH.  XVIII, "I       EXCUSES    FOR    NON-PRESENTMENT,    ETC.      §    365 

stances  that  lead  odg  to  j)resume  a  promise  to  pay  the  bal- 
ance.^ But  the  position  thus  taken  is  not  without  objec- 
tion ;  and  it  has  been  held  that  promises  to  pay,  made 
after  maturity,  cannot  be  considered  as  waivers  of  protest 
and  notice,  for  the  reason  that,  being  made  after  the  orig- 
inal liability  has  been  extinguished  by  the  failure  to  make 
presentment  and  to  give  notice,  the  promises  are  not  bind- 
ing unless  supported  by  some  fresh  consideration. 2  If 
the  promise  to  pay,  or  part  payment,  has  been  made 
in  ignorance  of  the  default  in  making  presentment 
and  giving  notice,  it  will  not  have  the  effect  of  a 
waiver.^     And  in  the  case  of  part-payment,  under  these 

Gove  V.  Vining,  7  Met.  212;  Armstrong  v.  Chadwick,  127  Mass.  156; 
Salisbury  v.  Renick,  44  Mo.  554;  Martin  v.  Winslow,  2  Mason,  241; 
Hazard  v.  Wliite,  26  Ark.  280,  Walker  v.  Rogers,  39  111.  279;  Smith  w. 
Curlee,  69  111.  221;  Carter  v.  Rprague,  51  Cal.  239;  Ross  v.  Hurd,  71  N. 
Y.  14;  Duryee  v.  Dennison,  5  Johns.  248;  Fell  u.  Dial,  14  S.  C.  247; 
Meyer's  Appeal,  87  Pa.  St.  129;  Hughes  v.  Bowen,  15  Iowa,  446;  Spur- 
lock  V.  Union  Bank,  4  Humph.  336;  James  v.  Wade,  21  La.  Ann.  548; 
Mathews  v.  Alien,  16  Gray,  594;  Tardy  v.  Boyd,  26  Gratt.  637;  Givens  v. 
Merchants'  Nat.  Bank,  85  III.  444;  Trimble  v.  Thorn,  16  Jolans.  152; 
Smith  V,  Lounsdale,  6  Ore.  80. 

1  Vaughn  v.  Fuller,  2  Stra.  1246;  Holford  v.  Wilson,  1  Taunt.  12; 
Whitaker  v.  Morris,  1  Fla.  25;  Sherer  v.  Easton  Bank,  33  Pa.  St.  134; 
Harvey  v.  Troup,  23  Miss.  538;  Williams  v.  Robinson,  13  La.  419;  New- 
berry V.  Trowbridge,  13  Mich.  264.  The  same  effect  is  produced  by  a 
promise  to  pay  a  part,  and  secure  the  residue  if  accepted.  Standage 
V.  Creighton,  5  C.  &  P.  406.  .  And  it  has  been  held  that  a  promise 
to  pay  a  part  will  alone  constitute  a  waiver  of  protest  and  notice 
as  to  the  whole  araouut.  Margetson  v.  Aitkeu,  3  Car.  &  P.  338; 
Dixon  V.  Elliott,  5  Car.  &  P.  437;  Harvey  v.  Troup,  23  Miss.  538.  But 
see  Fletcher  v.  Froggatt,  2  C.  &  P.  (12  Eng.  C.  L.  R.)  569,  to  the  effect 
that  a  promise  to  pay  a  part  is  only  a  waiver  j9ro  tanto. 

^  See  Story  on  Notes,  §  275;  1  Parsons' N.  &  B.  611;  Lawrence  v. 
Ralston  3  Bibb,  102;  Donelly  v.  Howie,  Hayes  &  J.  436;  Cathcart  v. 
Gibson,  1  Rich.  10;   Huntington  v.  Harvey,  4  Conn.  124. 

3  See  authorities  in  preceding  notes.  But  there  are  some  authorities 
to  the  contrary,  which  hold  that  the  promise  or  part-payment  will  oper- 
ate as  a  waiver,  irrespective  of  his  ignorance  or  knowledge  of  the  de- 
fault. Debuvs  V.  Mollere,  15  Mart.  (La.)  318;  Bogart  v.  McClurg,  11 
Heisk.  105.    See  Levy  v.  Peters,  9   Serg.  &  R.  125;  Bank  U.  S.  v.  Lyman, 

6.31 


§    3()5       EXCUSES    P'OR    XOX-rUESEN"TMEi\T,    ETC,      [CH.  XVIII. 

circumstauces,  the  drawer  or  iudorscr  could  demand  the 
return  of  the  money  so  paid.^  It  is  to  be  noted  that  ignor- 
ance of  the  fact  that  his  promise  would  in  law  operate  as  a 
waiver,  will  not  prevent  its  having  that  effect,  if  the  party 
had  knowledge  of  the  default,  since  ignorance  of  the  law 
excuses  no  one.^  But  ignorance  of  any  material  fact, 
which  affects  the  liability  of  the  party  making  the  promise, 
will  prevent  the  promise  from  operating  as  a  waiver.'^ 

The  promise  may  be  made  at  any  time,  even  after  suit 
is  brought,*  and  while  a  motion  for  a  new  trial  is  pending.^ 

But  in  order  that  the  promise  to  pay  may  operate  as  a 
waiver  of  demand  and  notice,  it  must  be  absolute  and  un- 
conditional. Any  conditional  or  uncertain  promise  to  see 
to  the  paA'inent  will  not  suffice.''  And  the  })romise  must 
be  accepted.' 

20  Vt.  660;  Bibb  t?.  Peyton,  12  Sm.  &  M.  575;  Lane  u.  Steward,  20  Me.  98; 
Curtiss  V.  Martin,  20  III.  557;  Eead  v.  Wilkinson,  2  Wash.  C.  C.  514. 

1  National  Bank  of  Commerce  v.  Nat.  M.  B.  Assn.,  55  N.  Y.  211; 
Lawrence  v.  Am.  Nat.  Bank,  54  N.  Y.  435;  Crutchers  v.  Woli,  2  Mon.  88. 

2  Mathews  v.  Allen,  16  Gray,  594;  Third  Nat.  Bank  v.  Ashworth,  105 
Mass.  503;  Davis  v.  Gowan,  17  Me.  387;  Pate  v.  McClure,  4  Rand.  164; 
Kennou  v.  McRae,  7  Port.  (Ala.)  175;  Hughes  v.  Boweu,  15  Iowa,  446; 
Cheshire  v.  Taylor,  29  Iowa,  492;  Beck  i;.  Thompson,  5  liar.  &  J.  587; 
Richter  v.  Selin,  8  Scrg.  &  R.  425;  Bilbie  v.  Lumley,  2  East,  469;  Ste- 
vens V.  Lynch,  13  East,  38;  Giveus  v.  Mercliauts'  Nat.  Bank,  85  111.  444. 

3  Low  V.  Howard,  10  C'ush.  159;  Arnold  v.  Dresser,  8  Allen,  435; 
Stevens  v.  Lynch,  2  Camp.  332;  12  East,  38. 

*  Oglesby  v.  Steamboat  Co.,  10  La.  Ann.  117. 

5  Hartv.  Long,  1  Rob.  (La.)  83. 

6  Dennis  v.  Morrice,  3  Esp.  158  (if  I  am  bound  to  pay  I  will) ;  Keyes 
V.  Festenmaker,  24  Cal.  329  (I  would  rather  pay  the  note  than  be  sued) ; 
Prideaus  v.  Collier,  2  Stark.  57  (I  will  see  what  I  can  do,  and  endeavor 
to  provide  effects)  ;  in  these  cases  held  to  be  no  waiver.  The  same  is 
true  of  any  equivocal  statement.  Borradaile  v.  Lowe,  4  Taunt.  93; 
Sherrod  v.  Rhodes,  5  Ala.  683;  Grain  i\  Colwell,  8  Johns.  384;  Ross  v. 
Hurd,  71  N.  Y.  14;  Tardy  v.  Boyd,  26  Gratt.  C37. 

''  Sice  V.  Cunningham,  1  Cow.  397;  Agan  v.  McMauus,  11  Johns.  180; 
Barkalow  v.  Johnson,  1  Harr.  397;  Laporte  v.  Landry,  17  Mart.  (La.) 
359;  Newberry  v.  Trowbridge,  13  Mich.  637;  Tardv  r.  Boyd,  2G  Gratt. 
637. 

632 


CH.  XVIII.]       EXCUSES    FOR    NON-PRESENTMEXT,    ETC.      §    865 

With  these  qualifications,  however,  the  promise  to  pay 
will  be  sufficient,  in  whatever  language  itmay  be  couched.^ 

Although  some  of  the  authorities  hold  that  the  promise  to 
pay  is  itself  presumptive  evidence  of  knowledge  of  default 
in  making  demand  and  giving  notice,-  the  better  opinion  is 
that,  while  such  a  promise  may  be  taken  as  presumptive 
evidence  of  knowledge  of  default  in  giving  the  notice,  it  is 
not  inconsistent  with  the  belief  that  there  has  been  a  proper 
demand  and  protest,  and  hence  the  failure  to  make  demand 
and  protest  must  be  proven  affirmatively.^  But  while  the 
promise  to  pay  is  not  presumptive  evidence  of  knowledge 
of  the  default  in  demand  and  notice,  it  is  held  that  it  will 
be  taken  as  prima  facie  evidence  of  there  having  been  proper 

1  Sigersonu.  Mathews,  20  How.  496;  Hopes  v.  Alder,  6  East,  16;  Sog- 
ers V.  Stephens,  2  T.  R.  713;  Donaldson  v.  Means,  4  Dall.  109;  Rogers  v. 
Hackett,  21N.  H.  100;  Hopkins  v.  Liswell,  12  Mass.  52;  Bryan  v.  Hunter, 
36  Me.  207;  Lane  v.  Stewart,  20  Me.  98;  Read  v.  Wilkinson,  2  Wash.  C. 
C.  514;  Hart  v.  Long,  1  Rob.  (La.)  83;  Union  Bank  v.  Grimshaw,  15  La. 
321;  Croxen  v.  Worthen,  5  M.  &  W.  5. 

2  3  Kent's  Com.  44;  Thompson  on  Bills,  384;  Barkalow  v.  Johnson,  1 
Harr.  397;  Landrnm  v.  Trowbridge,  2  Met.  (Ky.)  283;  Nash  v.  Harring- 
ton, 1  Ark.  39;  Hopleyv.  Dufresne,  15  East,  275;  Taylor  v.  Jones,  1  Camp. 
105;  Croxen  v.  Worthen,  5  M.  &  W.  5;  Loose  v.  Loose,  36  Pa.  St.  538; 
Debuys  v.  MoUere,  15  Mart.  (La.)  318.  But  a  promise  to  pay,  made  after 
maturity,  will  not  be  presumptive  evidence  of  knowledge  of  laches  in 
making  presentment  for  acceptance.  Landrum  v.  Trowbridge,  2  Met. 
(Ky.)  283;  Bank  of  Tenn.  v.  Smith,  9  B.  Mon.  609;  Philips  v.  McCurdy,  1 
Har  &  J.  187. 

3  Thornton  v.  Wynn,  12  Wheat.  183;  Sigerson  v.  Mathews,  20  How. 
464;  Ford  v.  Dallam,  3  Cold.  67;  Blum  v.  Bidwfcll,  20  La.  Ann.  43;  Van 
Wickle  V.  Downing,  19  La.  Ann.  83;  Harvey  v.  Troup,  23  Miss.  538; 
Barkerville  v.  Harris,  41  Miss.  535;  Hunter  v.  Hook,  64  Barb.  469;  U.S. 
Bank  v.  Southard,  2  Harr.  473;  Bank  U.  S.  v.  Leathers,  10  B.  Mon.  64; 
Cheshire  v.  Taylor,  29  Iowa,  492;  Davis  v.  Gowen,  17  Me.  387;  Otis  v. 
Hussey,3  N.  H.  346;  Freeman  v.  O'Brien,  38  Iowa,  406;  Kelley  v.  Brown, 
5  Gray,  108;  Lilly  v.  Petteway,  73  N.  C.  358;  Arnold  v.  Dresser,  8  Allen, 
435;  Ticknor  v.  Roberts,  11  La.  14;  Walker  v.  Rogers,  40  111.  278;  Far- 
rington  v.  Brown,  7  N.  H.  271;  Jones  v.  Savage,  6  Wend.  658;  Salisbury 
V.  Renwick,  44  Mo.  454;  Newberry  v.  Trowbridge,  13  Mich.  264:  Kelley  v. 
Brown,  5  Gray,  108;  Williams  v.  Union  Bank,  9  Heisk.  441. 

G83 


§    3G6       EXCUSES    FOR    NON-PKE.SENTMEXT,    ETC.      [CH.   XVIII, 

demand  and  notice,  throwing  upon  the  defendant  the  burden 
of  jH-oviug  that  there  was  no  presentment  and  demand  of 
the  kind  required  by  the  hiw  merchant.^ 

An  admission  of  notice  would  operate  as  a  waiver,  if  not 
made  upon  any  mistake  of  fact,  and  in  any  event  it  is  prima 
facie  evidence  of  notice. ^ 

§  3G().  What  will  not  excuse  default  in  presentment 
and  notice. — It  frequently  happens  that  circumstances 
will  make  it  appear  useless  to  make  presentment,  or  harm- 
less to  dispense  with  notice,  and  yet  presentment  and  notice 
are  nevertheless  required.  Some  of  these  cases  will  now 
be  mentioned. 

In  the  first  place,  the  mere  fact  that  the  drawer  or  in- 
dorser  will  suffer  no  injury  or  wrong,  if  there  should  be  a 
default  in  the  presentment  and  notice,  would  not  be  a  suf- 
ficient excuse,  whether  because  there  were  no  funds  in  the 
drawee's  hands,^  or  on  account  of  the  bankruptcy  or  insol- 
vency of  the  acceptor  or  maker,  occurring  before  maturity.* 

1  Tebbetts  v.  Dowd,  23  Wend.  379;  Hazard  v.  White,  26  Ark.  280; 
Lewis  V.  Brehme,  33  Md.  412;  Dickerson  v.  Turner,  12  Ind.  223;  Loose  v. 
Loose,  30  Pa.  St.  588;  Bruce  v.  Lytle,  13  Barb.  1C3;  Nash  v.  Harriugton,  1 
Ark.  39;  Dorsey  v.  Watson,  14  Mo.  59;  Commercial  Bank  v.  Clark,  28  Vt. 
325;  Gibbon  v.  Coggen,  2  Camp.  188;  Taylor  v.  Jones,  2  Camp.  105;  Stev- 
ens V.  Lynch,  2  Camp.  332;  12  East,  38;  Hopes  v.  Alder,  6  East,  16;  Pot- 
ter V.  Rayworth,  13  East,  417;  Campbell  v.  Webster,  2  C,  B.  258;  Guuson 
V.  Metz,  1  B.  &  C.  193;  Dixon  v.  Elliott,  5  C.  &  P.  437;  Jones  v.  O'Brien, 
26  E.  L.  &  Eq.  283;  Chapman  v.  Annette,  1  C.  &  K.  552;  Pickin  v.  Graham, 

1  Cromp.  &  Mees.  725;  Blesard  v.  Hirst,  5  Burr.  2670. 

2  Commercial  Bank  v.  Clark,  28  Vt.  325;  Andrews  v.  Boyd,  3  Met.  434. 

3  Cory  r.  Scott,  3  B.  &  Aid.  519;  Mechanic's  Bank  v.  Griswold,  7 
Wend.  165;  Commercial  Bank  v.  Hughes,  17  Wend.  94;  Ex  parte  Heath, 

2  Ves.  &  B.  240;  Carter  v.  Flower,  16  M.  &  W.  743;  Clegg  v.  Cotton,  3 
Bos.  &  P.  239;  Foster  v.  Parker,  2  C.  P.  Div.  18;  French  v.  Bank  of 
Columbia,  4  Cranch,  141;  Nash  v.  Harrington,  2  Aitkens,  9;  Bickerdile  v. 
Bollraan,  1  T.  R.  405;  May  v.  Coffin,  4  Mass.  341;  Hill  v.  Heap,  Dow.  & 
R.  15;  Hill  V.  Martin,  12  Mart.  (La.)  177.  But  see  contra  Mogadars  v. 
Holt,  1  Show.  317;  12  Mod.  15. 

*  Nicholson  V.  Gouthitt,  2  H.  BI.609;  Warrington  v.  Farbor,  8  East, 
G34 


CH.  XVIII.]       EXCUSES    FOR    NON-PRESENTMENT,    ETC.      §    366 

Aud  the  drawer  or  indorser  is  entitled  to  presentment,  even 
though  he  knows  of  the  insolvency.^  So,  also,  will  the 
bankruptcy  of  the  drawer  or  indorser  be  no  excuse  for 
failure  to  give  him  notice  of  dishonor.^ 

In  the  second  place,  the  death  of  the  maker  or  acceptor 
will  not  excuse  presentment  for  payment ;  if  there  be  a 
personal  representative,  presentment  should  be  made  to 
him.^  But  if  there  be  no  personal  representative,  demand 
should   be  made  at  the  deceased's  residence,*   unless   the 

242;  Smith  v.  Becket,  13  East,  187;  Leach  r.  Hewitt,  4  Taunt.  731;  Bowes 
V.  Howe,  5  Taunt.  30;  Esdaile  v.  Sowerby,  11  East,  114;  Thackeray  v. 
Blackett,  3  Comp.  164;  Cory  v.  Scott,  3B.  &  Aid.  619;  Free  v.  Hawkins, 
8  Taunt.  92;  May  v.  Coffin,  4  Mass.  341 ;  Benedict  v.  Coffee,  5  Duer,  226; 
Hunt  V.  Wadleigh,  26  Me.  271 ;  Johnson  w.  Earth,  1  Bailey,  482;  Course  t?. 
Shacklef ord,  2  Nott  &  McC.  283;  Hightower  ».  Ivy,  2  Port.  (Ala.)  308; 
Wash  u.  Harrington,  2  Aik.  9;  Schofield  «.  Bayard,  3  Wend.  488;  Arm- 
strong V.  Thurston,  11  Md.  148;  Shaw  v.  Reed,  12  Pick.  132;  Lawrence  v, 
Langley,  14  N.  H.  70;  Clair  v.  Barr,  2  Marsh.  256;  Watkins  v.  Crouch,  5 
Leigh,  522;  Walton  v.  Watson,  1  Mart.  (n.  s.)  347;  Brown  v.  Ferguson,  4 
Leigh,  53;  Barton  v.  Baker,  1  S.  &.  R.  334;  Cedar  Falls  Co.  v.  Wallace,  85 
N.  C.  225;  Denny  v.  Palmer,  5  Ired.  610;  Bank  of  Seaf ord  ??.  Connoway, 
4  Houst.  206;  Jackson  v,  Richards,  2  Caines,  343;  Cole  v.  Wintercost,  12 
Tex.  118;  Crossen  v.  Hutchinson,  9  Mass.  205.  Contra  Bogy  v.  Keil, 
1  Mo.  743;  Strothart  v.  Parker,  1  Overt.  260;  De  Berdt  v.  Atkinson,  2  H. 
Bl,  336. 

1  Sanford  v.  Dillaway,  10  Mass.  52;  Sussex  Bank  v.  Baldwin,  2  Harr. 
487;  Jervey  v.  Wilbur,  1  Bailey,  453;  Wilson  v.  Senier,  14  Wis.  411; 
Groton  «.  Dallheim,  6  Me.  476;  Buck  v.  Cotton,  2  Conn.  126.  But  see 
contra,  I  Cranch  C.  C.  23;  Leech  v..  Hill,  4  Watts,  448;  McClellan  v. 
Clarke,  2  Brev.  106  (knowledge  at  time  of  indorsement) ;  Clark  v. 
Minturn,  5  Brev.  186,  in  the  case  of  notorious  insolvency. 

2  Story  ouNotes,  §  290;  Story  on  Bills,  §348;  Esdaile  v.  Somerby;  II 
East,  117;  May  v.  Coffin,  4  Mass.  341;  Plawley  v.  Jette,  10  Ore.  31;  Ex 
parte  Rhode,  Mont.  &  M.  430.  See  contra,  Fleming  v.  McClure,  1  Brev. 
428,  notorious  insolvency;  Mobley  v.  Clark,  28  Barb.  390. 

3  See  ante  §  313.  But  see  Hale  v.  Burr,  12  Mass.  86,  where  it  is  held  to 
be  useless  to  make  demand  on  a  personal  representative,  since  he  is  per- 
mitted by  the  law  of  administration  to  take  a  given  time  to  settle  up  the 
estate  and  to  pay  debts. 

*  Magender  v.  Bank  of  Georgetown,  3  Pet.  87;  Juniata  Bank  v.  Hale, 
16  Serg.  &R.  157;  Story  on  Notes,  §  241;  Story  on  Bills,  §  346. 

635 


§    3(!()       EXCUSKS    rOK    NOX-PRESEXTMENT,    ETC.      [CH.   XVIII. 

l):il)ei-  is  payable  at  a  particular  place,  when  presentment  at 
that  i)lace  will  be  sufiicient.^  Since  the  personal  represent- 
ative has  no  authority  in  bis  representative  capacity  to  ac- 
cept bills  of  exchange,  it  would  be  useless  to  present  bills 
for  acceptance. 2 

In  like  manner,  in  the  case  of  the  death  of  a  drawer  or 
indorser,  the  notice  should  be  given  to  his  personal  repre- 
sentative.^ 

If  the  drawer  or  indorser  is  appointed  as  the  personal  re- 
presentative of  the  maker  or  acceptor,  the  knowledge  which 
he  gains  in  his  representative  capacit}'^  will  not  excuse  the 
want  of  presentment  and  notice.     Both  are  still  required.^ 

In  the  third  place,  when  the  bill  or  note  has  been  lost  or 
mislaid,  and  has  not  been  found  in  time  to  make  present- 
ment, the  demand  should  be  made  WM"thout  presenting  it, 
the  demand  being  accompanied  by  a  statement  of  its  loss, 
and  by  an  oifer  to  give  a  bond  of  indemnity  to  the  maker 
against  a  subsequent  presentation  of  the  paper  by  a  bona  fide 
holder.*     But  indemnity   can  not    be  required,  where  the 

1  Chitty  [*35G,  357],  399;  Story  on  Notes,  §  253;  2  D;uiier.s  Negot. 
Inst.,  §  1177. 

2  2  Daniel's  Negot.  Inst.,  §  1178;  ante  §  14(i;  Smith  v.  Bank,  L.  K. 
4  P.  C.  194. 

3  See  ante,  336. 

^  Magruder  v.  Union  Bank,  3  Pet.  87;  7  Pet.  287;  Carolina  Nat.  Bunk 
r.  Wallace,  13  S.  C.  347;  Story  on  Bills,  §  376.  Even  when  the  maker 
dies  insolvent.  Gower  v.  Moore,  25  Me.  10;  Lawrence  v.  Langley,  14  N. 
H.  70;  Johnson  v.  Haith,  1  Bailey,  482.  But  see  Cauut  v.  Thompson,  7 
C.  B.  400.  Where  the  drawer  answered  the  demand  of  the  holder  on  the 
acceptor  by  saying  that  the  acceptor  was  dead,  and  that  he  was  his  exec- 
utor, and  asking  the  bill  to  be  held  back  for  a  few  days,  when  he  would 
see  to  its  payment,     There  was  held  to  be  sufficient  notice  of  dishonor. 

^  Fisher  v.  Carroll,  0  Ired.Eq.  485;  Freeman  v.  Boyuton,  7  Mass.  483; 
Douelson  v.  Taylor,  8  Pick.  390;  Fales  v.  Russell,  16  Pick.  315;  Almy  v. 
Reed,  10  Cush.  421;  Exchange  Bank  v.  Morrall,  16  W.  Va.  546;  2  Par- 
sons' N.  &  B.  302.  The  indemnity  should  be  tendered  to  every  party  of 
whom  payment  is  demanded.  Smith  v.  Rockwell,  2  Hill,  484;  Wilder  v. 
Seelye,  8  Barb.  410. 
(58() 


CH.   XVIII.]       EXCUSES    FOR    NON-PRESENTMENT,    ETC.      §    o()6 

paper  is  non-negotiable/  or  where  it  is  payable  to  order  and 
has  been  specially  indorsed,  if  indorsed  at  all  ;2  when  it  is 
definitely  proved  to  have  been  destroyed  ;  ^  when  it  has 
found  its  way  into  the  possession  of  the  maker  or  acceptor  ;  * 
undfJinaUi/,  when  the  action  on  the  paper  would,  as  against 
any  other  party  plaintiff,  be  barred  by  the  statute  of  limit- 
ations.^ 

If  a  bill  is  originally  drawn  in  duplicates,  the  duplicate 
should  be  presented  if  the  original  is  lost;  but  in  such  a 
case,  whatever  discharges  a  party  from  liability  on  the 
original,  will  preclude  recovery  on  the  duplicate.  If,  how- 
ever, a  duplicate  is  issued  subsequently  in  consequence  of 
the  loss  of  the  original,  any  necessary  delay  in  presenting  the 

1  AVright  t'.  AVright,  54  N.  Y.  437;  Clark  v.  Reed,  12  Smed.  &  M.  554; 
Lazell  V.  Lazell,  12  Vt.  443;  2  Parsons'  N.  &  B.  303. 

2  Rawley  v.  Ball,  3  Cow.  303;  Piuterd  v.  Tackiugton,  10  Johns.  104; 
Rogers  v.  Miller,  4  Scam.  333;  Depew  v.  Whelau,  6  Blackf,  485;  Dean  v. 
Speakman,  7  Blackf.  317;  Price  v.  Dunlap,  5  Cal.  483;  Hough  v.  Barton, 
20  Vt.  455;  Long  v.  Bailie,  2  Camp.  214;  Rait  v.  Watson,  4  Biug.  273;  II 
J.  B.  Moore,  510;  Mossop  v.  Eadou,  16  Ves.  430;  Branch  Bank??.  Till- 
man, 12  Ala.  214;  Moore  v.  Fall,  42  Me.  450;  Cleveland  v.  Worrell,  13 
Ind.  545.  Contra  Ramuz  v.  Growe,  1  Exch.  1(57;  Crowe  v.  Clay,  9  Exch. 
604;  overruling  Clay  v.  Crowe,  8  Exch.  205. 

^  Hinsdale  v.  Bank  of  Orange,  6  Wend.  378;  Wright  v.  Maidstone,  1 
Kay  &J.  701;  Scott  v.  Meeker,  20  Hun,  163;  Des  Arts  v.  Leggett,  16  N. 
Y.  582;  Woodford  v.  Wliitely,  Moody  &  M.  517;  Clark  v.  Quince,  3  Dowl. 
26;  Blackie  v.  Bidding,  6  C.  B.  196;  Pierson-y.  Hutcliinson,  2  Camp.  211; 
Thayer  w.  King,  15  Ohio,  242;  Moses  v.  Trice,  21  Gratt.  556;  Patton  ?;. 
State   Bank,  2  Nott  &  McC.  464;    Dean  v.  Speakman,  7  Blackf.  317; 

Abom  V.  Bosworth,  1  R.  I.  401;    Wells  v.  Wade,  20  Kan. ;  Moore  v. 

Fall,  42  Me.  450;  Bank  of  U.  S.  v.  Sill,  5  Conn.  106;  Hough  v.  Barton, 
20  Vt.  455;  Branch  Bank  v.  Tillman,  12  Ala.  214;  Wade  v.  Wade,  12 
HI.  89. 

^  Smith  V.  McClure,  5  East,  476;  Patersou  v.  Hardacre,  4  Taunt.  114; 
De  la  Chaumette  v.  Bank  of  England,  9  B.  &  C.  208 ;  2  B.  &  Ad^  385 ;  Mur- 
ray V.  Burling,  10  Johns.  172;  Buck  v.  Kent,  3  Vt.  99;  Knight  v.  Legh,  4 
Biug.  589;  Decker  v.  Mathews,  2  Kern.  313;  Lamb  v.  Moberly,  3  T.  B. 
Men.  179. 

^  Torrey  v.  Foss,  40  Me.  74;  Moore  v.  Fall,  42  Me.  450;  2  Parsons'  N. 
I  B.  296,  303. 

637 


§    3(57       EXCUSES    FOR    NOX-PRESENTMEXT,    ETC.       [CII.  XVIII. 

duplicate  will  be  excused.^  And  so,  also,  will  a  reasonable 
delay  be  excused,  if  a  bill  p:i3'a]jle  at  sight  is  lost  or  mislaid. ^ 
In  lite  fourth  place,  if  in  executing  a  bill  or  note,  it  i'^ 
misdated,  so  that  the  place  of  residence  of  the  maker  or 
acceptor  is  not  given,  demand  should  be  made  at  the  place 
of  the  date,  unless  he  knows  of  his  residence,  when  the 
demand  should  be  made  at  the  place  of  residence.''  But 
the  holder  will  be  excused,  if  presentment  should  be  de- 
layed in  consequence  of  the  holder  being  misled  by  the 
misdating  of  the  paper. ^  There  are,  however,  authorities 
which  maintain,  that  the  holder  is  not  compelled  to  make 
presentment  anywhere  else  than  at  the  place  of  the  date, 
even  though  the  maker  or  acceptor  cannot  be  fouiid  there, 
and  has  no  residence   or  place  of  business  at  that  place.'" 

§  367.  Transfer  by  delivery  as  security.  —  It  has*  also 
been  held  that  the  transferrer  by  delivery,  of  paper  pay- 
able to  order,  without  indorsement  and  as  collateral  se- 
curity, is  not  entitled  to  a  strict  presentment  at  maturity; 
and  he  is  not  relieved  of  liability,  unless  he  can  show  ac- 
tual damage  by  reason  of  the  want  of  presentment.^  The 
reason  for  this  rulinsf  is  to  be  found  in  the  fact  that  the 
transfer  is  not  according  to  the  law  merchant;  the  trans- 
ferrer is  not  liable  as  an  indorser,  and  consequently  the 
transferee  is  not  required  as  to  him  to  make  presentment 
or  to  ofive  notice  of  dishonor.^ 

1  Beaton  v.  Martin,  1  Hand,  ?.4(;;  51  N.  Y,  572;  Benton  v.  Martin,  31 
N.  Y.  382. 

2  Aborn  v.  Bosworth,  1  R.  I.  403. 

3  Taylor  v.  Snyder,  3  Den.  145;  Burrows  v.  Hannegan,  1  McLean,  309; 
Bk.  of  Orleans  ?;.Whittemore,12Gray,  473;   1  Parsons'  N.  &  B.  4.59,  note  c. 

4  Smith  V.  Philbrick,  10  Gray,  252;  Stayler  v.  Williams,  24  Md.  199; 
Apperson  v.  Bynura,  5  Cold.  348;  Meyer  v.  Hibscher,  47  N.  Y.  270;  Moodle 
V.  Morrall,  3  Const.  367. 

5  Story  on  Notes,  §  123G;  Hepburn  v.  Toledano,  10  Mart.  (La.)  643. 

«  Van  Wart  v.  Woolley,  3  B.  &  C.  439;  Swinyard  v.  Bowes,  5  M.  &  S. 
62;  Story  on  Bills,  §  372;  Story  on  Notes,  §  2B4. 

^  1  Parsons'  N.  &  B.  503;  Story  on  Bills,  §372;  2  Daniel's  Negot. 
Inst.,  §  1176.     Seeaw«e,  §  310. 

638 


CHAPTER    XIX. 

PAYMENT  AXD  ITS  EFFECTS. 

Section  371.  Payment  distinguished  from  sale  or  transfer. 

372.  Who  may  make  payment. 

373.  What  payor  can  demand. 

374.  To  whom  payment  may  be  made. 

375.  Payment  made  -with  what.  ' 

376.  Effect  of  payment. 

377.  Appropriation  of  payment. 

378.  Payment  sni)ra  protest,  or  for  honor. 

379.  Payment  by  note  or  bill,  when  absolute  or  conditional. 

380.  Presumptions  in  respect  to  absolute  and  conditional  pay- 

ments, how  rebutted. 

381.  Right  of  action  suspended  by  taking  bill  or  note  in  pay- 

ment of  debt. 

382.  Duties  of  holders  of  bill  or  note  taken  in  payment. 

§  371.   Payment  distinguished  from  sale  or  transfer.  — 

Payment  consists  of  the  performance  of  a  contract,  with 
the  intention  of  extinguishing  the  liability  of  the  party 
paying,  or  the  party  for  whom  the  payment  is  made.  The 
same  acts  may  and  do  constitute  a  sale  when  the  parties 
intend  to  transfer,  instead  of  extinguishing,  the  claim  on 
the  contract.  But  in  order  that  the  transaction  might  con- 
stitute a  sale,  the  party  paying  and  the  party  receiving- 
it  must  agree  that  it  shall  be  a  sale.  The  presumption  of 
law  is  strongly  in  favor  of  its  being  a  payment,  and  this 
presumption  can  only  be  rebutted  by  strong  proof  of  a 
contrary  intention.^     Any   secret    understanding  that  the 

1  Lancey  v.  Clark,  64  N.  Y.  209;  s.  c.  8  N.  Y.  S.  C.  (3  Hun)  575; 
Eastman  v.  Plumer,  32  N.  H.  238;  Greening  w.  Patten,  51  Wis.  150;  Burr 
V.  Smith,  21  Barb.  262,  Wells,  J.,  saying:  "It  is  true  he  (the  stranger) 
^declined  having  it  cancelled;  but  tliat  circumstance  was  not  enough  to 

639 


§    373  PAYMENT   AND    ITS    EFFECTS.  [CJI.   XIX. 

party  paying  shall  buy  the  paper  for  the  person  who  fur- 
nishes the  money  will  not  change  the  character  of  the 
transaction  to  a  sale.^ 

§  372.  Who  may  make  payment.  —  Any  party  to  the 
instrument,  who  is  primarily  or  secondarily  liable  on  it, 
may  make  or  tender  payment.  And  an  indorser  can,  by 
making  payment,  acquire  the  right  to  recover  on  the  instru- 
ment against  the  prior  indorsers,  the  drawer,  and  the 
primary  obligors,  although  he  has  been  discharged  from 
liability  by  the  want  of  notice  of  dishonor. ^  But  a  stranger 
to  the  instrument  has  no  right  to  make  payment,  without 
the  consent  of  the  holder,  unless  he  acts  as  the  agent  of  a 
party,  who  is  liable,  or  makes  payment  supra  protest.^  Of 
course  the  personal  representative  of  a  party  to  the  paper 
may  make  or  tender  payment. 

• 

§  373.  What  payor  can  demand.  —  The  payor  may 
always  demand  the  right  to  examine  the  paper  in  order  to 
assure  himself  of  the  genuineness  of  the  signatures  ;  for  if 
the  payment  is  made  to  the  wrong  party,  it  does  not  ex- 
tinguish the  liability  of  the  pajor  to  the  rightful  party, 
who  could  demand  a  second  payment.*    But  since  the  money 

overcome  the  presumption  arising  from  the  facts  proved,  that  it  was 
paid  and  extinguished.  It  docs  not  prove  a  purchase,  and  unless  it  was 
purchased  by  Riley  (the  stranger) ,  it  was  satislicd."  The  question  is  one 
for  the  jury  to  determine  in  the  light  of  all  the  circumstances  of  the  case. 
Dougherty  r.  Deeney,  45  Iowa,  443;  Swope  v.  Lefflngwell,  72  Mo.  348. 
i  Eastman  r.  Plumer,  32  N.    II.  238;  Greening  v.   Fatten,  51  Wis.  150. 

*  Ellsworth  V.  Brewer,  11  Pick.  31C.  But  such  an  indorser  could  not 
hold  liable  the  parties  to  another  instrument,  wliieli  had  been  deposited 
Tvith  him  as  security  for  his  indorsement.  Bachellor  v.  Priest,  12  Pick. 
399. 

3  Burton  v.  Slaughter,  26  Gratt.  919.  But  in  the  case  of  a  stranger 
making  payment,  it  is  always  open  to  inquiry  whether  a  payment  or  a 
sale  was  intended.  Deacon  v.  Stodhart,  2  Man.  &  G.  317.  See  post, 
§  378. 

*  Smith  V.  Chester,  17J.  R.  654;  Wheeler  «;.  Guihl,  20  Pick.  545;  Wilcox 

(540 


CH.  XIX.]  PAYMENT    AND    ITS    EFFECTS.  §    373 

was  in  such  cases  paid  under  a  mistake  of  fact,  it  could  be 
recovered  back  in  an  appropriate  action,^  which  may  be 
done,  whenever  money  is  paid  under  a  mistake  of  facts, 
but  not  under  a  mistake  of  law.^  And  in  teuderino;  the 
payment,  he  can  demand  the  surrender  to  him  of  the  paper 
itself,  for  the  possession  of  the  paper  by  one  who  is  liable  on 
it,  —  particularly  a  primary  obligor,  —  is  presumptive  evi- 
dence that  he  has  paid.^  It  has  also  been  held,  although  it 
is  very  doubtful,  that  the  payor  may  demand  a  receipt  of 
payment  to  be  written  across  the  paper. ^  But  whether  it 
can  be  demanded  or  not,  it  is  very  desirable  to  obtain  a 
receipt  as  the  highest  and  best  evidence  of  payment,^ 
although  the  possession  of  the  paper  is  sufficient  presump- 
tive proof  of  payment.^ 

i\  Aultmau,  61  Ga.  544;  Caual  Bank  v.  Bauk  of  Albany,  1  Hill,  287;  Da- 
vis V.  Miller,  14  Gratt.  1 ;  Goddard  v.  Merchants'  Bank,  2  Saadf .  247. 
This  is  true  even  though  it  is  paid  to  one  who  bears  the  same  name, 
as  does  the  rightful  party.     Adams  v.  Reeves,  68  N.  C.  134. 

1  Roscoe  V.  Hardy,  12  East,  434;  Turner  v.  Leeche,  4  Barn.  &  Aid. 
451. 

2  Martin  v.  Morgan,  3  Moore,  635;  Milues  v.  Duncan,  6  B.  &  C.  671; 
Talbot  V.  Nat.  Bank,  129  Mass.  67;  Adams  w.  Reeves,  68  N.  C.  134. 

•^  Otisfleld  y.^Mayberij,  63  Me.  197;  Freeman  v.  Boyntou,  7  Mass.  486; 
Best  V,  Crall,  23  Kan.  482;  Dugan  v.  U.  S.,  3  Wheat.  172;  Briukley  v. 
Going,  1  Breese,  288;  Norris  w.  Badger,  6  Cow.  449;  Moses  v.  True,  21 
Gratt.  556:  Hansard  v.  Robinson,  7  B.  &  C.  90;  Pfiel  v.  Vaubateuberg,  2 
Camp.  439;  Barring  v,  Clark,  19  Pick.  230.  And  the  party  paying  may 
maintain  trover  for  it,  after  having  made  payment.  Neal  v.  Hanson,  60 
Me.  84;  Buck  u.  Kent,  3  Vt.  99;  Pierce  v.  Gilson,  9  Vt.  216;  Spencer  v. 
Dearth,  43  Vt.  98;   Stone  v.  Clough,  41  N.  H.  290. 

*  Chitty  on  Bills    (^13th  Am.  ed.)  [*423],   477;  Story  on  Notes,  §  422. 

5  Scholey  u.  Walsby,  Peake  Cas.  24;  Jones  v.  Fort,  9  B.  &  C.  764. 
But  the  possession  of  a  receipt  is  oulj  prima  facie  proof  of  payment;  it 
may  be  rebutted  by  parol  evidence,  showing  fraud  or  mistake.  Scholey 
V.  Walsby,  Supra.;  Chitty  ou  Bills  [*424],  478. 

«  Dugan  V.  United  States,  3  Wheat.  472;  Bowie  v.  Duvall,  1  Gill  &  J. 
175;  Wickersham  v.  Jarvis,  2  Mo.  App.  280;  Campbell  v.  Humphreys,  2 
Scam.  478;  Warren  v.  Gilmau,  15  Me.  70;  Bank  of  Kansas  City  v.  Mills, 
24  Kan.  610;  Bond  v.  Storrs,  13  Conn.  412;  Brinkley  v.  Going,  1  Breese, 
228.    But  seecontra  Mendez  v.  Carreroou,  1  Ld.  Rayra.  742. 

41  041 


§    374  PAYMENT    AND    ITS    EFFECTS.  [Cll.  XIX. 

§  374.  To  wboni  payment  may  be  made. — The  pay- 
ment can  only  be  made  to  the  holder,  or  to  his  duly  au- 
thorized agent.  If  the  paper  is  paj^able  to  bearer,  or  has 
been  indorsed  in  blank,  it  is  payable  to  any  one  who  has 
the  possession  of  it,  although  he  may  be  a  thief. ^  But  if 
the  paper  is  payable  to  order,  payment  to  any  one  but  the 
person  to  whose  order  it  is  made  payable,  will  not  discharge 
the  liability  of  the  payor  on  the  instrument,  unless  the  pcr- 
!son  receiving  i)ayment  was,  in  fact,  entitled  to  receive  pay- 
ment, either  as  a  lawful  transferee  or  as  the  authorized 
agent  of  the  holder.  Possession  in  such  cases  is  not  pre- 
sumptive evidence  of  ownership. ^  But  indorsement  is  not 
necessary,  if  the  holder  proves  by  other  testimony  his  right 
to  demand  payment.  Thus  payment  may  be  made  to  the 
assignee  of  a  bankrupt,  the  personal  representative  of  a 
deceased  holder,  the  guardian  of  an  insane  person  or  infant, 
and  to  the  husband  wherever  he  has  still  the  common-law 
authority  to  reduce  his  wife's  choses  in  action  to  possession. ^ 
And  payment  under  such  circumstances  and  knowingly,  to 
the  bankrupt,  insane  person,  ward,  or  wife,  would  not  be  a 
valid  discharge  from  liability.*     If  the  paper  is  payable  to 

1  Mauran  v.  Lamb,  7  Cow.  174;  Bank  of  U.  S.  v.  U.  S.,  2  How.  711; 
Dugau  V.  United  States,  2  Wheat.  172;  Adams  v.  Oabes,  6  Car.  &  P. 
70;  Goodman  v.  Harvey,  4  Ad.  &  E.  870;  Merritt  v.  N.  Y.,  etc.,  R.  R. 
Co.,  21  N.  Y.  S.  C.  (14  Hun)  324;  Bachellor  r.  Priest,  12  Pick.  406; 
Bank  of  Utica  v.  Smith,  18  Johns.  230;  Owen  v.  Barrow,  4  Bos.  &  P. 
101. 

2  Porter  v.  Cushman,  19  111.  572;  Doubleday  v.  Kress,  50  N.  Y.  413; 
Pease  v.  Warren,  29  Mich.  9;  Paris  v.  Moe,  60  Ga.  90.  See  contra 
Bachellor  v.  Priest,  12  Pick.  406. 

3  2  Daniel's  Negot.  Inst.,  §  1231;  Chitty  on  Bills  [*393,  et  seg.],  444, 
447;   2  Parsons'  N.  &  B.  211. 

^  Kitchen  v.  Bartsch,  7  East,  53;  White  v.  Palmer,  4  Mass.  147;  Leon- 
ard V.  Leonard,  14  Pick.  280;  Barlow  v.  Bishop,  1  East,  432.  It  is  held 
in  the  case  of  a  married  woman;  that  payment  to  her  will  not  discharige 
the  acceptor  of  a  bill  made  payable  to  her  before  her  marriage,  although 
he  does  not  know  of  her  marriage.  Story  on  Bills,  §  413. 
642 


CH.  XIX.]  PAYMENT    AND    ITS    EFFECTS.  §    375 

one  person,  to  the  use  of  another,  payment  must  be  made 
to  the  former.^ 

§  375.  Payment  made  with  what.  —  In  negotiable  pa- 
per, payment  can  only  be  made  with  money,  i.e.,  legal 
tender,  except  with  the  consent  of  the  holder.  If  a  paper 
calls  in  general  terms  for  the  payment  of  a  given  sum  of 
dollars,  the  payor  can  make  payment  i-n  any  kind  of  legal 
tender,  and  the  holder  cannot  insist  upon  the  selection  of 
any  one  kind  with  which  to  make  payment.  And  even 
where  one  kind  of  Ig'gal  tender  is  depreciated  in  value,  as 
in  the  case  of  the  United  States  treasury  notes,  during  and 
after  the  American  civil  war,  it  does  not  interfere  with  the 
rio^ht  of  the  payor  to  select  the  depreciated  money. ^  And 
the  selection  of  the  more  valuable  kind  of  legal  tender 
does  not  entitle  the  payor  to  any  discount  in  compensation 
for  the  difference  in  value  between  the  coin  and  the  depre- 
ciated treasury  notes. ^  But  if  the  government  has  changed 
the  intrinsic  value  of  the  coins,  without  changing  their  de- 
nominations, after  a  contract  has  been  made,  the  contract 
can  onl}'-  be  fully  performed  by  a  tender  of  the  value  of  the 
given  amount  of  the  money,  according  to  the  old  standard  of 
value.*  The  legal  tender,  in  the  United  States,  constitutes 
at  present  the  gold  and  silver  coin  of  the  denomination  of 
one  dollar  and  over,  and  the  United  States  treasury  notes. 
The  constitutionality  of  the  acts  of  Congress,  which  have 
made  these  notes  legal  tender,  has  been  very  seriously 
questioned  and  in  one  case  denied  by  the  Supreme  Court 
of  the  United  States,^  the  position  being  taken  that  Con- 
gress had  no  power  to  make  legal  tender  of  anything  which 

1  Cramlingtou  v.  Evans,  2  Vent.  307 ;  Clark  v.  Litcomb,  42  Barb.  122. 
-  Killough  V.  Alford,  32  Tex.  457. 
3  Bush  V.  Baldrey,  11  Allen,  367. 

*  Pilkinton  v.  Comrs.  of  Claims,  2  Kuapp,  17;   Da  Costa  v.  Cole,  Holt, 
465:  Skin.  272;  Field,  J.,  in  Juillard  v.  Greenman,  110  U.  S.  465. 
5  Hepburn  v.  Griswold,  8  Wall.  604. 

043 


§    375  PAYMKNT    AND    ITS    EFFECTS.  [cil.  XIX. 

had  DO  intrinsic  value. ^  But  in  later  cases,  the  Federal 
Supreme  Court  has  pronounced  these  acts  to  be  constitu- 
tional, and  this  may  be  taken  as  a  definite  settlement  of  the 
question. - 

But  if  the  contract  calls  for  any  particular  kind  of  legal 
tender,  it  can  only  be  satisfied  by  a  tender  of  that  kind, 
and  the  holder  may  refuse  to  receive  any  other. ^  If,  how- 
ever, in  such  a  case  the  depreciated  treasury  notes  are  ten- 
dered and  accepted,  in  payment  of  the  paper,  the  holder  can 
only  require  a  payment  to  him  of  the  amount  called  for  by 
the  paper,  and  cannot  insist  upon  the  payment  of  a  pre- 
mium, to  compensate  the  difference  in  value  between  the 
gold  and  the  treasury  notes."* 

If  the  paper  is  expressly  made  payable  in  anything  but 
legal  tender,  as  where  it  is  payable  in  currency  or  in  Na- 
tional bank-notes,  the  paper  is  non-negotiable  ;  ^  but  it  is 
otherwise  binding  upon  the  parties,  and  a  tender  of  the 
given  number  of  dollars  in  the  kind  of  currency  named  will 
be  a  ffood  tender.^ 


1  See  Tiedeman  ou  Police  Power,  §  90,  for  a  full  discussion  of  tliis 
question. 

2  Legal  Tender  Cases,  12  Wall.  457;  Dooley  v.  Smith,  13  Wall.  605; 
Bigler  V.  Waller,  14  Wall.  298;  Kailroad  Co.  v.  Johnson,  15  Wall.  195; 
Juillard  v.  Greenraan,  110  U.  S.  421. 

3  Bronson  v.  Rhodes,  7  Wall.  245;  Butler  v.  Horwitz,  7  Wall.  259; 
Dewing  v.  Scars,  11  Wall.  379;  Trebilock  v.  Wilson,  12  Wall.  687;  Phil- 
lips V.  Dugau,  21  Ohio  St.  466;  McGoou  v.  Shirk,  54  111.  408  (overruling 
Humphrey  v.  Clement,  44  111.  299;  Whetstone  v.  Colley,  36  111.  328) ; 
Smith  V.  Wood,  37  Tex.  620;  Luck  v.  Faulkner,  25  Cal.  404;  Higgins  v. 
B.  R.  &  Am.  &  M.  Co.,  27  Cal.  158.  But  see  Wood  v.  Bullens,  G  Allen, 
518;  Killough  v.  Alford,  32  Tex.  457,  where  the  paper,  beiugpayable  "  in 
gold  coin  or  the  equivalent  thereof  in  United  States  legal  tender  notes," 
was  held  to  be  discharged  by  the  payment  of  the  given  number  of  dollars 
in  United  States  treasury  notes. 

*  Oilman  v.  County  of  Douglass,  6  Nev.  27. 
5  See  ante,  §  29a 

c  Trebilock   v.  Wilson,    12  Wall.    694;  Taup  v.   Drew,  10  How.  218; 
Rucker  v.  Dearing,  18  Gratt.  438;  McCord  v.  Ford,  3  Mon.  166;  David  v. 
644 


CH.  XIX.]  PAYMENT    AND    ITS    f:FFECTS,  §    376 

While  nothing  but  money  can  be  lawfully  tendered  in 
payment  of  a  bill  or  note,  the  parties  themselves  may  agree 
upon  the  use  of  something  else  in  payment.^  But  an  agent 
cannot,  without  explicit  authority,  receive  anything  but 
money  in  liquidation  of  a  debt.^ 

It  is  not  necessary,  however,  that  the  money  should  ex- 
change hands.  The  mere  giving  of  credit  by  the  payor  to 
the  payee  will  constitute  a  payment,  if  accepted.^  The 
effect  of  making  payment  with  checks  is  discussed  else- 
where.* 

• 

§376.  Effect  of  payment.  —  Payment  always  has  the 
effect  of  extinguishing  the  liability  of  the  party  paying; 
but  whether  it  extinguishes  the  contract  itself  depends 
upon  the  character  and  liability  of  the  party  paying.  If 
the  party  paying  is  the  primary  obligor,  all  the  parties  to 
the  paper  are  discharged,  for  all  the  other  parties  merely 
guarantee  the  payment  by  the  primary  obligor.  This  is  not 
only  the  case  where  the  primary  obligor  in  fact  is  likewise 
the  primary  obligor  in  name,  as  in  the  case  of  the  maker 
of  a  promissory  note,  or  the  acceptor  of  a  bill  of  exchange ;  ^ 
but  also  where  the  payment  is  made  by  a  secondary  obligor, 
a  drawer  or  indorser,  for  whose  accommodation  the  paper 
was  issued.  The  fact  that  it  was  issued  for  his  accommo- 
dation makes  him  the  primary  obligor,  and  payment  by  him 

Phillips,  7  Mon.  632;  Chambers  v.  George,  5  Litt.  335;  Ruston  v.  Noble, 
4  J.  J.  Marsh.  130;  Dillard  v.  Evans,  4  Ark.  175. 

1  See  post,  §  379. 

2  De  Mets  v.  Dogon,  53  N.  Y.  635;  Moye  v.  Cogdell,  69  N.  C.  93;  Her- 
rimon  v.  Shomon,  24  Kan.  387 ;  Bank  of  Kansas  City  v.  Mills,  24  Kan. 
610;  Madclur  v.  Bevan,  39  Md.  485;  Speuru.  Ledergerber,  56  Mo.  465; 
Chapman  v.  Cowles,  41  Ala.  103. 

'  Savage  v.  Merle,  5  Pick.  83;  Pacific  Bank  v.  Mitchell,  9  Met.  297. 
^  See  post,  Chapter  on  Checks. 

s  Suydam  v.  Westfall,  2  Den.  205;  Gordan  v.  Wansey,  21  Cal.  77; 
Gardner  v.  Maynard,  7  Allen,  456;  Eastman  v.  Pluraer,  32  N.  H.  238. 

645 


§    37G  PAYMENT    AND    1X8    EFFECTS.  [CII.  XIX. 

cancels  the  instrument.^  In  such  cases  the  party  i)aying 
cannot  re-issue  the  paper,  so  as  to  give  the  transferee  any 
right  of  action  against  the  other  parties,  for  the  reason  that 
he  himself  has  no  such  right  of  action, ^  although  the  party 
so  transferring  by  indorsement  becomes  liable  himself  as 
an  indorser.^ 

Where  the  secondary  obligor  is  really  the  primary 
obligor,  because  the  bill  or  note  has  been  given  for  his  ac' 
commodation,  and  the  acceptor  or  maker  makes  the  pay- 
ment, the  liabilities  on  the  instrument  are  so  far  extin- 
guished as  to  prevent  its  being  re-issued  or  sued  upon  by  the 
acceptor  or  maker  ;  *  but  the  acceptor  or  maker  may  put  it  in 
as  evidence  of  the  amount  of  his  claim  in  an  action  ag^ainst  the 
accommodated  party,  for  the  amount  so  paid  on  his  account.'' 

Where  the  payment  is  made  by  a  secondary  obligor,  who 
is  not  an  accommodated  party,  his  payment  simply  extin- 
guishes his  own  liability  and  the  liability  of  subsequent  in- 
dorsees, and  leaves  intact  the  causes  of  action  against  the 
primary  obligors,  and  all  prior  secondary  obligors.*^     For 

1  Joues  V.  Broadhurst,  9  C.  B.  173;  Lazarus  v.  Cowie,  3  Q.  B.  (43 
E.  C.  L.  R.)  459;  Beck  v.  Robley,  1  H.  Bl.  89ra;  Bacon  v.  Searles,  1  H. 
Bl.  88;  Walvvyn  v.  St.  Quiutin,  1  B.  &P.  652;  Gardner  ».  Maynard,  7 
7  Allen,  457. 

2  See  cases  cited  in  last  two  notes. 

3  Guild  V.  Eager,  17  Mass.  615;  Hubbard  v.  Jackson,  4  Bing.  390; 
Callow  V.  Lawrence,  3  M.  &.  S.  95;  Mead  v.  Small,  2  Greenl.  207. 

■»  Bell  V.  Norwood,  7  La.  95;  Stark  v.  Alford,  49  Tex.  260;  Griffith  v. 
Reed,  21  Wend.  502. 

5  Bank  of  Vergennes  v.  Cameron,  7  Barb.  143;  Baker  ».  Martin,  3 
Barb.  634. 

6  The  party  so  paying  may,  of  course,  recover  of  these  parties  tiie 
amount  he  has  paid  in  tlie  extinguishment  of  his  secondary  liability. 
.Johnson  v.  Kenuion,  2  Wils.  262;  .Jones  v.  Broadhurst,  9  C.  B.  173;  Cal- 
low V.  Lawrence,  3  M.  &S.  95;  Hubbard  v.  .Jackson,  1  M.  &  P.  (17  E.  C. 
I>.  R.)  11 ;  2  Parsons'  N.  &  B.  218  ;  but  the  drawer  or  indorser  must  pro- 
duce the  note  or  bill,  in  order  to  succeed  in  his  action  against  the 
acceptor  or  maker.  Jones  v.  Broadhurst,  supra;  Thornton  v.  Mayuard, 
10  Com.  PI.  L.  R.  695. 

646 


CH.  XIX.]  PAYMENT    AND    ITS    EFFECTS.  §    377 

this  reason  a  drawer  or  indorser  may,  under  these  ch'cum- 
stances,  after  cancelling  the  subsequent  indorsements,  re- 
issue the  paper,  and  transfer  his  rights  of  action  against  the 
other  parties. 1  But  the  transfer  of  a  negotiable  instrument 
after  dishonor  is  a  separate,  independent  contract;  and 
where  the  transfer  is  made  by  indorsement,  the  indorse- 
ment must  be  made  "  to  order"  or  "  to  bearer,"  in  order 
to  enable  any  subsequent  indorsee  to  recover  on  the  paper 
in  his  own  name,  where  the  common-law  prohibition  of  the 
assignment  of  choses  in  action  has  not  been  abolished.^ 

If  the  paper  is  surrendered  under  the  mistaken  notion 
that  the  whole  amount  had  been  paid,  instead  of  only  a  part, 
the  balance  may  be  recovered,  notwithstanding  the  surren- 
der. This  is  only  permissible,  however,  when  it  is  the  re- 
sult of  some  accident,  mistake  or  fraud. ^ 

§  377.  Appropriation  of  payment. — When  one  is 
indebted  to  another  on  two  or  more  accounts  or  instru- 
ments of  indebtedness,  and  payment  is  made  in  amounts 
not  sufficient  to  satisfy  all,  it  is  often  difficult  to  determine 
in  detail  to  which  debt  the  payment  should  be  appropriated. 
But  the  following  general  rules  may  be  deduced  from  the 
adjudications  upon  the  subject:  — 

1.  When  the  payment  is  voluntary,  and  is  not  made 
under  the  stress  of  legal  process,  the  debtor  has  the  right 
to  make  the  appropriation  to  whatever  item  or  account  he 
pleases,*  even  to  the  prejudice  of  one  who  is  security  for 

1  St.  Johu  V.  Roberts,  31  N.  Y.  441;  Kirksey  v.  Bates,  1  Ala.  303; 
Montgomery  R.  R.  Co.  v.  Trebles,  44  Ala.  258;  French  v.  Jarvis,  29 
Conn.  348;  Callow  v.  Lawrence,  3  M.  &  S.  95;  Williams  v.  James,  15 
Ad,  &  El.  (n.  s.)  499;  West  Boston  Savings  Inst.  v.  Thompson,  124 
Mass.  506.     See  Fenn  v.  Dugdale,  40  Mo.  63. 

-  Leavitt  v.  Putnam,  1  Sandf.  199. 

3  Banks  v.  Marshall,  23  Cal.  223;  Kent  v.  Reynolds,  15  N.  Y.  S.  C.  (8 
Hun)  559. 

4  Taylor  v.  Sandford,  7  Wheat.  13;  United  States  u.  January,  7  Crauch, 
572;  Miller  v.  Trevillian,   2  Rob.   1;  Hooper  v.  Keay,  1  Q.  B.  Div.  178; 

647 


§    377  PAYMENT    AND    ITS    EFFECTS.  [CH.    XIX. 

one  of  the  debts. ^  As  between  the  debtor  and  creditor, 
the  debtor  has  until  the  bringing  of  the  suit,  in  which  to 
make  the  appropriation;  but  as  to  third  parties,  he  must 
make  the  appropriation  within  a  reasonable  time.'* 

2.  If  the  debtor  does  not  make  the  appropriation,  the 
creditor  may  ap})ly  it  as  he  pleases. "^  But  it  has  been  held, 
with  much  show  of  reason  for  it,  that  if  the  debtor  has,  for 
any  reason,  not  had  an  opportunity  to  make  the  appropria- 
tion, the  creditor  cannot  exercise  the  right  of  appropria- 
tion.* It  is  likewise  denied  to  the  creditor  to  make  the 
apjjropriation  to  a  debt,  which  is  not  yet  due,  if  there  are 
debts  already  due;  ^  so,  also,  to  a  debt  whose  validity  has 
been  denied  by  the  debtor.*'  The  right  of  appropriation  is 
otherwise  unconditional,  and  in  the  exercise  of  the  right  the 
creditor  can   apply  the  payment  to  a  debt  barred  by  the 

Howard  v.  McCall,  21  Gratt.  205;  Lingle  v.  Cook,  32  Gratt.  272;  Whit- 
taker  v.  Pope,  48  Ga.  13;  Slmson  v.  lugliara,  2  B.  &C.  72;  Harding  r. 
Worralcy,  8  Baxt.  578;  Clarke  t?.  Scott,  45  Cal.  8G;  Spriukile  v.  Martiu, 
72.N.C.  92.  After  making  the  appropriation,  the  debtor  cannot  change- 
it.  Mayor  of  Alexandiia  v.  Patten,  4  Cranch,  317;  Hill  v.  Sutherland,  1 
Wash.  (Va.)  128;  Hubbell  v.  Flint,  15  Gray,  550. 

1  Goddard  ».  Cos,  2  Stra.  1194;  Kirby  v.  Duke  of  Marlborough,  2 
Maule  &  S.  18;  Chitty  on  Bills  [*402],  454. 

2  Philpott  V.  Jones,  2  A.  E.  41;  Mayor  of  Alexandria  v.  Patten,  4 
Cranch,  317;  United  States  v.  Kirkpatrick,  9  Wheat.  720;  Johnson  r. 
Johnson,  30  Ga.  857;  Pattison  v.  Hull,  9  Cow.  747. 

*  Woods  V.  Sherman,  71  Pa.  St.  100;  Allen  v.  Culver,  3  Den.  284;  Hard- 
ing V.  Wormley,  8  Baxt.  578;  Smith  v.  Screv'cn,  1  McCord,  368;  Chap- 
man V.  Commissioners,  25  Gratt.  721;  Lingle  v.  Cook,  32  Gratt.  272; 
Bennett  v.  Wilder,  C7  111.  327;  Bean  v.  Brown,  54  N.  H.  395;  Pattison  v. 
Hull,  9  Cow.  747,  The  creditor  cannot  change  the  appropriation  after 
having  once  made  it.  Mayor  of  Alexandria  v.  Patten,  4  C^ranch,  317; 
Bank  of  N.  A.  v.  Meredith,  2  Wash.  C.  C.  47;  Hill  v.  Southerlaud,  1 
Wash.  (Va.)  128;  White  v.  Trumbull,  3  Green  (N.  J.),  314;  Tooke  ?>. 
Bonds,  29  Tex.  419;  Harding  v.  Wormley,  8  Baxt.  578.  It  is  otherwise, 
if  the  debtor  has  not  been  notified.  Hankey  v.  Hunter,  Peakc  Ad.  Cas. 
107. 

*  2  Parsons  on  Contracts  [*f,31],  7G4;    Waller  v.  Lacy,  Man.  &  G.  54. 

5  Bobc  V.  Stickucy,  36  Ala.  482. 

«  Taylor  V.  Saudford,  7  Wheat.  13. 
048 


CH.  XIX]  PAYMENT    AND    ITS    EFFECTS.  §    377 

statute  of  limitations,  even  against  the  will  of  the  debtor. 
But  such  an  appropriation  will  not  take  the  debt  out  of 
the  statute  as  to  the  balance.^  The  creditor  cannot,  how- 
ever, apply  the  payment  to  an  illegal  debt,  i.e.,  one  which  is 
absolutely  void  in  law.- 

But  in  order  that  the  debtor  may  make  an  appropriation, 
it  is  not  nece'ssary  for  him  to  make  an  express  declaration 
to  the  creditor.  Any  facts  or  circumstances  which  show  an 
intention  to  make  an  appropriation,  will  be  binding  upon 
the  creditor,  and  deprive  him  of  the  right  to  make  the  ap- 
propriation,^ even  though  the  creditor  is  unwilling  to  ac- 
cede to  the  debtor's  wishes  or  receives  payment  with  a 
different  intention.* 

3.  When  neither  debtor  nor  creditor  has  made  the  ap- 
propriation, it  will  be  applied  by  law,  in  the  manner  which 
best  conforms  to  principles  of  equity,  and  to  the  prob- 
able intention  of  the  parties.  Where  principal  and  interest 
are  due,  the  payment  will  be  applied  first  to  the  interest 
and  then  to  the  principal.^ 

1  Mills  V.  Foulke,  5  Bing.  N.  C.  455;  Nash  v.  Hodgson,  6  DeG.  &  M. 
&  G.  474;  Pond  v.  Williams,  7  Gray,  630;  Williams  v.  Griffith,  5  M.  &  W. 
300;  Logan  v.  Mason,  6  Watts  &  S.  9;  Ayer  v.  Hawkins,  19  Vt.  26;  Liv- 
ermore  v.  Rand,  26  N.  H.  85;  Watt  v.  Hoch,  25  Pa.  St.  411;  Phillips  v. 
Moses,  65  Me.  70;  Brown  v.  Burns,  67  Me.  535. 

2  Caldwell  v.  Wentworth,  14  N.  H.  431;  Wright  v.  Laing,  3  B.  &  C. 
165;  Arnold  v.  The  Mayor,  etc.,  of  Poole,  4  Man.  &  G.  860;  Ex  parte 
Eandlesou,  2  Deacon  &  Ch.  534,  But  see  contra  Philpott  v.  Jones,  2  A. 
&  E.  41;  Cruickshanks  v.  Rose,  1  Moody  &  R,  100;  Treadwell  v.  Moore, 
34  Me.  112. 

3  Pickett  V.  Memphis  Bank,  32;Ark.  346 ;  Tayloe  v.  Sandiford,  7  Wheat. 
14;  Robert  v.  Garnie,  3  Caines,  14;  Scott  u.  Fisher,  4  T.  B.  Mon.  387; 
Newmarch  v.  Clay,  14  East,  231);  Shaw  v.  Picton,  4  B.  &  C.  715;  Mitchell 
V.  Dall,  2  Harr.  &  G.  159;  4  Gill  &  J.  361;  Fowke  v.  Bowie,  4  Harr,  & 
J.  5G6;  West  Branch  Bank  v.  Moorehead,  5  Watts  &  S.  542;  Stone  v. 
Seymour,  15  Wend.  19. 

*  Reed  v.  Boardraau,  20  Pick.  441;  Wetherell  v.  Joy,  40  Me.  325. 

5  Lash  V.  Edgerton,  13  Minn.  210.  Held^  otherwise,  if  payment  is 
made  before  maturity.  Starr  v.  Richmond,  30  111.  276.  If  the  interest 
also  boars  interest,  then  the  payment  raust  be  applied  to  the  interest  on 

049 


§    377  PAYMENT    AND    ITS    EFFECTS.  [cil.  XIX. 

Everything  else  being  equal,  the  law  will  apply  the  pay- 
ment to  the  debts  of  longest  standing.^  Ordinarily,  the 
payment  will  be  applied  to  those  debts  which,  on  account 
of  bearing  interest,  or  of  some  penalty  or  criminal  liability 
being  attached  to  it,  is  most  burdensome  to  the  debtoi'.^ 
But  it  will  not  be  applied  to  the  debt  which  is  secured,  in 
preference  to  the  unsecured  debt.  In  this  case  the  best 
interest  of  the  creditor  is  consulted,  and  payment  is  applied 
to  the  unsecured  debt.^  But  the  general  rule  is  that  the  law 
favors  the  surety,  and  will  apply  the  payment  to  the  debt 
on  which  the  surety  is  liable,*  that  is,  of  course,  if  the 
creditor  has  not  made  the  application.  The  creditor  has  the 
right,  if  he  chooses,  to  apply  the  payment  to  the  unsecured 
debt,  against  the  interest  of  the  surety.^  The  court  will 
not  ap})ly  it  to  a  debt  barred  by  the  statute  of  limitations^ 
in  preference  to  one  that  is  not  barred.^     But  if  one  of  two 

interest,  then  to   the  primary  interest,  and.  Anally,  to  the  principal. 
Auketol  V.  Converse,  17  Ohio  St.  11. 

1  United  States  v.  Kirkpatrick,  9  Wheat.  720;  Smith  v.  Loyd,  11  Leigh, 
512;  Ilorue  v.  Planters'  Bank,  32  Ga.  1;  Mills  v.  Fowlkes,  5  Biug.  N.  C. 
461;  Bobe  v.  Stickney,  3G  Ala.  482;  Wendt  v.  Ross,  33  Cal.  650. 

2  Meggot  V.  Mills,  1  Ld.  Raym.  286;  Spiller  v.  Creditors,  16  La.  Ann. 
292;  Wright  v.  Laing,  3  B.  &  C  165;  Peters  v.  Anderson,  5  Taunt.  596. 
But  see  Mills  v.  Fowlkes,  5  Bing.  N.  C.  455;  7  Scott,  444;  Stone  v.  Sey- 
mour, 15  Wend.  29. 

3  Lash  V.  Edgerton,  13  Minn.  210;  Foster  v.  McGraw,  64  Pa.  St.  464; 
Baine  v.  Williams,  10  Sm.  &  M.  113;  Staudford  Bank  v.  Benedict,  15 
Conn.  437 ;  Cole  v.  Withers,  33  Gratt.  204 ;  Moss  v.  Adams,  4  Ired.  Eq.  42 ; 
Field  V.  Holland,  6  Cranch,  8 ;  Biu'ch  v.  Tebbutt,  2  Stark.  74 ;  Trullinger 
V.  Kofold,  7  Ore.  228;  Anon.,  8  Mod.  235;  Chitty  v.  Naish,  2  Dowl.  511 ; 
Planters'  Bank  v.  Stockman,  1  Freem.  Ch.  502;  Hilton  v.  Burley,  2  N.  H. 
193;  Jones  v.  Kilgore,  2  Rich.  Eq.  64;  Moss  v.  Adams,  4  Ired.  Eq.  42; 
Ramsour  v.  Thomas,  10  Ired.  165.  See  contra  Pattison  v.  Hall,  9  Cow. 
747.     See  also  Dorsey  v.  Gassaway,  2  Harr.  &  J.  402;  Guinn  v.  Whitaker, 

1  Harr.  &  J.  754;  Robinson  v.  Doolittle,  12  Vt.  246. 

*  Marryatts  v.  White,  2  Stark.  101.     See  Kirby  r.  Duke  of  Marlborough, 

2  M.  &  S.  18;  Pierce  v.  Knight,  31  Vt.  701;  Ilausen  v.  Roun.savell,  74  HI. 
238;  Fridley  v.  Bowen,  103  111.  633. 

*  Harding  v.  Tifft,  75  N.  Y.  461;  Hauford  v.  Robertson,  47  Mich.  100. 
6  Nash  V.  Hodgson,  6  De.  G.  M.  &  G.  474. 


CH.  XIX.]  PAYMENT   AND    ITS    EFFECTS.  §    378 

or  more  debts  falls  under  the  bar  of  the  statute  after  pay- 
ment and  before  its  appropriation,  the  court  will  apply  it  to 
the  debt  that  has  thus  been  barred.^  And  where  the  sum 
paid  equals' the  amount  due  on  one  item,  it  will  be  applied 
to  that  item. 2 

If  one  is  indebted,  individually  and  as  a  partner,  to  the 
same  person,  a  payment  will  be  applied  to  the  individual  or 
partnership  debt,  according  as  the  money  paid  belongs  to 
the  individual  partner  ^  or  to  the  firm.*  If  it  is  doubtful 
whose  money  is  paid,  in  the  case  of  individual  and  joint 
liabilities,  the  creditor  may  apply  it  to  either  debt.^  And 
where  there  is  a  change  in  the  jjersonne?  of  the  firm  in  the 
midst  of  a  series  of  commercial  transactions  with  a  particu- 
lar creditor,  the  court  should  appl}'^  a  payment  to  the  debts 
of  the  old  firm.^ 

§   378.   Payment  supra  protest,  or  for  honor.  —  It  is  the 

general  rule,  already  stated,^  that  no  one  but  a  party  to  the 
paper  can  make  or  tender  payment,  without  the  consent  of 
the  holder.  But  an  exception  to  the  rule  is  to  be  found  in 
the  case  of  payment  supra  protest ^  or  for  the  honor  of 
some  party  or  parties  to  the  paper.  This  can  only  be  done 
after  protest  for  non-payment  or  non-acceptance  by  the 
acceptor.^  The  person  wishing  to  pay  for  the  honor  of 
some  one  or  more  of  the  parties,  must  be  ready,  on  the 
day  of  maturity,  and  oifer  to  pay  the  money  to  the  notary 

1  Robinson's  Admr.  v.  Allison,  36  Ala.  525. 

-  Robert?;.  Garuie,  3  Caiues,  14. 

3  Fairchild  v.  Holly,  10  Conn.  175. 

•*  Thompson  w.  Brown,  Moody  &  M.  40. 

*  Van  Rensselaer's   Exrs.  v.  Roberts,  5  Den.  570;  Baker  v.  Stackpole, 
9  Cow.  420. 

"  Simon  v.  Ingham,  5  B.  &  C.  72;  3  Dowl.  &  R.  249;  Hooper  v.  Keay, 
2  Q.  B.  Div.  178. 

'  See  ante,  §  372. 

8  Vandewall  v.  Tyrrell,  1  Moody  &  M.  87;  Chitty  on  Bills  [*508,  509], 
576. 

651 


§    378  PAY.MKXT    AM)    ITS    EFFECTS.  [CH.  XIX. 

public,  after  he  has  noted  it  for  protest;  and  he  must  go 
before  the  notary  and  dechire  that  he  makes  payment  for 
certain  parties,  naming  them.^  And  he  must,  within  a 
reasonable  time,  notify  the  party  or  parties  for  whose  honor 
he  has  made  payment^ 

The  party  so  paying  becomes  subrogated  to  all  the  rights 
of  the  party  or  parties,  for  whose  honor  he  pays,  and  can 
recover  the  amount  of  any  party  who,  as  prior  indorscr 
or  drawer,  is  liable  to  such  party  or  parties.^  But  he 
can  not  sue  any  subsequent  indorser.^  In  order  that 
he  may  recover  the  amount  of  any  of  the  parties,  he  should 
pay  for  the  honor  of  the  bill  in  general,  which  is  in  effect 
a  payment  in  honor  of  the  last  indorsee,  and  gives  to  the 
party  paying  the  right  of  action  against  all  the  indorsers, 
as  well  as  the  drawer  and  acceptor.*^ 

Even  the  drawee  may  make  payment  for  the  honor  of 
one  of  the  parties  to  the  bill,  if  he  has  not  himself  become 
a  party  to  it  by  acceptance.^ 

The  right  to  make  payment  for  honor  is  an  incident  of 
bills  of  exchange,  designed  to  facilitate  exchange,  and  does 
not  extend  to  promissory  notes. ^ 

If  the  signature  of  the  person  for  whose  honor  the  pay- 
ment is  made  is  a  forgery,  the  party  paying,  of  course,  has 
no  remedy  against  the  parties  to  the  bill ;  nor  can  he  recover 
back  the  money  so  paid  unless  he  discovers  the  mistake  in 

1  Cbittyon  Bills  [*509],  575,  576;  Geralopulo  v.  Wieler,  10  C.  B.  (70 
Eng.  C.  L.  R.)  GOG;  Deustou  v.  Henderson,  13  Johns.  322;  Vandewall  v. 
Tyi-rell,  1  Moody  &  M.   87. 

2  Woods  V.  Pugh,  7  Ham.  1G4. 

3  Chitty  on  Bills  [*509],  57G. 

4  Mertens  v.  Withington,  1  Esp.  112. 

5  Fairley  v.  Roch,  Lutw.  891;  Chitty  on  Bills  [*509],  576,  577;  Cox  v. 
Earle,  3  B.  &  Aid.  430;  Vandewall  v.  Tyrrell,  Moody  &  M.  87;  Smith  v. 
Nissen,  1  T.  R.  269. 

6  Chitty  on  Bills  [*508],  575. 

^  Smith  V.  Sawyer,  55  Me.  141;  Story  on  Notes,  §  453;  Byles  o:i 
Bills. 

652 


en.  XIX.]  PAYMENT    AXD    ITS    EFFECTS.  §    37i) 

time  to  enable  the  holder  to  notify  all  parties  to  the  bill  of 
the  dishonor,  according  to  the  requirements  of  the  law  of 
notice;  in  other  words,  he  must  discover  it  and  notify  the 
holder  on  the  day  of  payment.^ 

§  379.  Payment  by  note  or  bill,  when  absolute  or  con- 
ditional. —  This  has  been  a  much  mooted  question  in  the 
courts,  and,  as  is  usual  when  the  reasons  for  the  opposing 
theories  are  themselves  doubtful,  the  courts  are  found  to 
have  rendered  contradictory  decisions.  A  terse  statement 
will  be  given  of  the  various  conclusions  reached,  but  if  it 
is  at  all  possible  to  formulate  a  rule  that  will  approximately 
reconcile  the  otherwise  conflicting  decisions,  it  would  be  that 
a  private  bill  or  note,  —  excluding  bank-notes  and  govern- 
ment treasury  notes  which  are  currency  and  pass  as  and  for 
money, —  when  given  in  payment  of  a  debt,  does  not  consti- 
tute an  absolute  paj^ment,  until  it  itself  has  been  paid,  unless 
the  parties  have  expressly  or  imj)liedly  agreed  that  the  note 
or  bill  shall  be  taken  in  absolute  satisfaction  of  the  debt; 
and  this  is  true,  whether  the  bill  or  note  is  given  in  pay- 
ment of  a  debt  of  a  different  character,  such  as  an  open 
account,  or  a  judgment,  or  of  the  same  character.  But  the 
decisions  will  be  found  at  times  to  run  counter  to  this  rule. 

It  has  thus  been  decided  in  most  of  the  courts,  that  if  the 
debtor  gives  his  own  note  or  bill  in  liquidation  of  the 
debt,  it  will  be  a  conditional  payment,  whether  the  debt  is 
precedent, 2  or  contemporaneous,  as  where  one's  note   is 


1  Wilkiuson  v.  Johnson,  3  B.  &  C.  428;  5  Dow.  &  Ry.  403. 

2  Clark  V.  Young,  1  Crauch,  181 ;  Bank  of  United  States  v.  Daniel,  12 
Pet,  32;  Peters  v.  Beverley,  10  Pet.  532;  Downey  v.  Hicks,  14  How.  240; 
The  Kimball,  3  Wall.  45;  Sheehy  v.  Mandeville,  6  Cranch,  253;  McGuire 
V.  Gadsby,  3  Call,  324;  Middlesex  v.  Thomas,  5  C.  E.  Green,  39;  Clopper 
V.  Union  Bank,  7  Har.  &  J.  120;  McLaren  v.  Hall,  26  Iowa,  298;  Miller  v. 
Lumsden,  16  HI.  161;  Archibald  v.  Argall,  53  HI.  307;  Logan  v.  Attix,  7 
Iowa,  77;  Davis'  Estate,  5  Whart.  537;  Jones  v.  Strawhan,  4  Watts  &  S. 
261;  Mclntyre  v.  Kennedy,  29  Pa.  St.  448;  Merrick  v.  Boury,  4  Ohio  St. 

653 


§    0~i>  PAYMENT    AND    ITS    EFFECTS.  [CH.  XIX. 

given  in  immediate  settlement   of  some  purchase  or  other 
contract.^  « 

Where  a  stranger's  note  or  bill  is  transferred  in  satis- 
faction of  a  debt,  the  cases  are  still  more  at  variance. 
Where  such  a  note  or  bill  is  given  for  a  precedent  debt,  it 
is  ver}^  generally  held  to  be  only  a  conditional  payment, 
whether  the  paper  is  payable  to  order  and  indorsed,  or  is 

60;  Sutliffe  v.  Atwood,  15  Ohio  St.  186;  Cole  v.  Sackett,  1  Hill,  516;  Wiu- 
sted  Bank  v.  Webb,  39  N.  Y.  32i5;  Hawley  w.  Foote,  19  Wend.  516;  Frisbie 
V.  Lamed,  21  Wend.  450;  Smitli  v.  Miller,  43  N.  Y.  171;  Board  of  Educa- 
tion 17.  Fonda,  77  N.  Y.  350;  McNiel  v.  McCamley,  6  Tex.  163;  Marshall 
W.Marshall,  42  Ala.  149;  Myatts  v.  Bell,  41  Ala.  222;  Stara  v.  Kerr,  31 
Miss.  199;  Guion  y.  Doherty,  43  Miss.  538;  Smith  v.  Owens,  21  Cal.  11; 
Poole  V.  Rice,  9  W.  Va.  73;  Feamster  v.  Withrow,  12  W.  Va.  611;  Walsh 
V.  Lennou,  98  111.  27;  Crawford  v.  Roberts,  50  Cal.  236;  Brown  v.  Olm- 
sted, 50  N.  Y.  163;  Wilbur  v.  Jeruegan,  11  R.  I.  113;  Nightingale  v. 
Chafee,  11  R.  I.  609;  McCluny  v.  Jackson,  6  Gratt.  96;  Lewis  v.  Davison, 
29  Gratt.  226;  Armistead  v.  Ward,  2  Pat.  &  H.  515;  Glenn  v.  Smith,  2 
Gill  &  J.  512;  Walton  v.  Bcmiss,  16  La.  140;  McLaren  v.  Hall,  26  Iowa, 
298;  Steamboat  Charlotte  v.  Hammond,  9  Mo.  63;  Yaruell  v.  Anderson, 
14  Mo.  619;  Doebling  v.  Loss,  40  Mo.  150;  Dougal  v.  Cowles,  5  Day,  511 ; 
Burdick  V.  Grcenj  15  Johns.  249;  Gordon  v.  Price,  10  Ired,  385;  IJnion 
Bank  v.  Smiser,  1  Snced,  501;  Welch  v.  Allington,  23  Cal.  322;  Breituug 
«.Liudauer,'37  Mich.  217;  Smith  v.  Chester,  1  T.  R.  655;  Price  v.  Price, 
16  M.  &  W.  232;  Richardson  v.  Rickman,  5  T.  R.  517.  But  in  .several  of 
the  States,  it  is  held  that  the  taking  of  a  bill  or  note  Is  presumptively  an 
ab.solute  payment,  but  parol  evidence  is  admissible  to  rebut  this  pre- 
sumption. Ely  V.  James,  123  Mass.  36 ;  Parkham  Sewing  M.  Co.  v.  Brock, 
113  Mass.  194;  Mehlberg  u.  Fischer,  24  Wis.  607;  Gaskins  v.  Wells,  15 
Ind.  253;  Smith  v.  Bettger,  68  Ind.  254;  Hutchins  v.  Olcutt,  4  Vt.  549; 
Torrey  v.  Baxter,  13  Vt.  452;  Dickinson  v.  King,  28  Vt.  378;  Farr  ?'. 
Stephens,  26  Vt.  299;  Varncr  v.  Nobleborough,  2  Grecul.  124;  Gilmore 
V.  Busscy,  12  Me.  41  >;  Gooding  v.  Morgan,  37  Me.  619;  Ward  v.  Bourne, 
56  Me.  161;  Thatcher  V.  Dinsmoi-e,  5  Mass.  302;  Chapman  u.  Durant,  10 
Mass.  51 ;  Wood  v.  Bodwcll,  12  Mass.  289;  Dodge  v.  Emerson,  131  Mass. 
467;  Green  u.  Russell,  132  Mass.  536;  Morrison  u.  Smith,  81  111.  221; 
Hoodless  V.  Reid,  112  111.  105;  Tisdale  v.  Maxwell,  58  Ala.  40;  Rowe  v. 
Collier,  25  Tex.  252;  Hunt  v.  Boyd,  2  La.  109. 

1  2  Am.  Lead.  Cas.  263;  Sheehy  v.  Mandeville,  6  Cranch,  253;  Story  on 
Notes,  §  104.     But  sec  contra  2  Parsons'  N,  &  B.  157,  where  Mr.  Pai'sons 
pronounces  the  transaction  "to  be  substantially  selling  a  note  by  barter, 
or  exchanging  it  for  goods." 
654' 


CII.  XIX.]  PAYMENT    AND    ITS    EFFECTS.  §    379 

payable  to  bearer  and  imindorsecl,  by  the  debtor.^  But 
where  the  note  or  bill  of  a  stranger  is  given  in  satisfaction 
of  a  contemporaneous  debt,  it  is  held  to  be  an  absolute 
payment,  if  it  is  payable  to  bearer  and  is  transferred  with- 
out indorsement,^  and  a  conditional  payment,  if  it  is 
payable  to  order  and  is  transferred  by  indorsement;  the 
reason  for  this  distinctionbeingthat  the  conditional  liability 
of  an  indorser  is  inconsistent  with  the  presumption  of  an 
absolute  payment." 

So,  also,  where  a  new  note  or  bill  is  given  in  renewal  of 
an  old  one,  and  the  original  is  retained  by  the  payee,  the 
new  instrument  only  operates  as  a  suspension  of  the  payee's 
rights  in  the  original,  and  does  not  constitute  an  absolute 
payment  of  the  original  until  it  itself  is  paid.^     Where  the 

1  Camidge  v.  Allenby,  6  B.  &  C.  373;  Wart  v.  Woolley,  3  B.  &  C.  439; 
s,  c.  5  Dow.  &R.  374;  Swinyard  v.  Boyes,  5  M.  &  S.  62;  Ex  parte  Black- 
burne,  10  Ves.  204;  Leaugue  v.  Wasinn,  85  Pa.  St.  244;  M'Lughan  v. 
Bovard,  4  Watts,  315;  Downey  v.  Hicks,  14  How.  249;  Crane  v.  Mc- 
Donald, 45  Barb.  355;  Gibson  v.  Tobey,  53  Barb.  195;  Noel  v.  Murray,  8 
Kern.  1G9;  1  Duer,  388;  Gordon  v.  Price,  10  Ired.  L.  388;  Gallagher  v. 
Roberts,  2  Wash.  C.  C.  193.  But  see  contra'Denms  v.  Williams,  40  Ala. 
633.  In  Stain  r.  Ker,  31  Miss.  199;  So  ie  v.  Gallagher,  3  E.  D.  Smith,  507, 
held  to  be  absoliite  payment,  wncre  i.  is  transferred  with  indorsement. 
Contra  Cook  v.  Beech,  10  Humph.  413. 

2  Breed  v.  Cook,  15  Johns.  242;  Bank  of  England  v.  Newman,  1  Ld. 
Raym.  442;  Ex  parte  Blackburne,  10  Ves.  204;  Fydell  v.  Clarke,  1  Esp. 
447;  Tobey  v.  Barber,  5  Johns.  68;  Gibson  v.  Tobey,  53  Barb.  195;  Whit- 
beck  V.  Vanners,  11  Johns.  409;  Noel  v.  Murray,  1  Duer,  388;  Camidge 
r.  Allenby,  6  B.  &  C.  373;  2  Parsons'  N.  &  B.  156,  183.  But  presumption 
may  be  rebutted  by  parol  evidence.  Torrey  v.  Hadley,  27  Barb.  196; 
Porter  v.  Talcott,  1  Cow.  381;  Rew  v.  Barber,  3  Cow.  279;  Gordon  v. 
Price,  10  Ired.  L.  388. 

3  Monroe  v.  Huff,  5  Den.  369;  SofEe  v.  Gallagher,  3  E.  D.  Smith,  507; 
Boyd  V.  Hitchcock,  20  Johns.  76;  Shriner  v.  Keller,  25  Pa.  St.  61;  2  Am. 
Lead  Cas.  263;  2  Parsons'  N.  &B.  159. 

*  Keudrick  v.  Lomax,  2  C.  &  J.  405 ;  Cumber  v.  Wane,  1  Stra.  426 ; 
Bishop  V.  Rowe,  3  M.  &  S.  362;  Woods  v.  Woods,  127  Mass.  141;  East 
River  Bank  v.  Buttei'worth,  45  Barb.  476;  Waydell  v.  Luer,  5  Hill,  448; 
Cole  V.  Sackett,  1  Hill,  516;  Gregory  v.  Thomas,  20  Wend.  17;  Hobson 
V.  Davidson,  8   Mart.  (La  )  431.     But  see  contra  where  the  old  note  is 

655 


§    380  PAYMENT    AND    ITS    EFFECTS.  [CII.  XIX. 

old  note  or  bill  is  surreudered,  it  is  evidence  tcndiuir  to 
prove  an  intention  to  merge  the  old  note  in  the  new,  yet 
the  authorities  are  divided  upon  the  question,  whether  it 
does,  in  fact  and  alone,  prove  the  merger,  some  of  the 
authorities  maintaining  that  it  does  not,^  and  others,  that  it 
does. 2 

In  every  case,  where  the  new  «iote  or  bill  proves  to  be 
void,  on  account  of  forgery  or  alteration,  the  liability  on 
the  old  instrument  still  stands  or  revives,  according  to  the 
view  taken  of  the  effect  of  the  renewal.^ 

§  380.  Presumptions  in  respect  to  absolute  and  con- 
ditional payment,  how  rebutted.  —  It  has  been  already  in- 
timated that  the  presumption  of  law,  in  respect  to  the 
character  of   the  payment,  when  it  is  made  by  a  note  or 

held  to  be  merged  ia  the  new  one.  Slaymaker  v.  Gundacker,  10  S.  &  R. 
75;  Nicholv.  Bate,  10  Yerg.  429;  Hill  v.  Bostick,  10  Humph.  410;  Bank 
of  Commonwealth  v.  Letcher,  3  J.  J.  Marsh.  195,  But  the  parties  may 
always  expressly  agree  that  the  old  note  be  merged  in  the  liability  of  the 
new.  Crockett  v.  Trotter,  1  Stew.  &  P.  446;  Weakly  v.  Bell,  9  Watts, 
273;  Morris  v.  Harvey,  75  Va.  726. 

1  Olcott  V.  Rathbone,  5  Wend.  490;  Jagger  Iron  Co.  v.  Walker,  76 
N.  y.  52-2;  Pan-ott  v.  Colby,  71  N.  Y.  597,  overruling  Fisher  v.  Mar- 
vin, 47  Barb.  159.  Even  when  the  new  note  has  been  reduced  to 
judgment,  as  long  as  there  has  been  no  satisfaction.  First  Nat.  Bank  v. 
Morgan,  13  N.  Y.  S.  C.  (6  Hun)  348;  Cole  v.  Sackett,  1  Hill,  516;  El- 
Avood;??.  Deidendorf,  5  Barb.  398;  Pratt  v.  Foote,  12  Barb.  212,  213; 
Farriugtou  v.  Frankfort  Bank,  24  Barb.  562;  Olcott  v.  Rathbone,  5  Wend. 
490;  Corn  Exchange  Ins.  Co.  v.  Babcock,  57  Barb.  231;  Davis  v.  Anable, 
2  Hill,  339;  Bates  v.  Rosekrans,  37  N.  Y.  409;  Winsted  Bank  v.  Webb, 
39  N.  Y.  325. 

-  Smith  V.  Harper,  5  Cal.  329;  Morgan  v.  Creditors,  1  La.  527, 
Morris  u.  Harvey,  75  Va.  726.  In  New  York  it  was  held  lately  that  a  re- 
newal in  a  l)ank  is  by  cominou  banking  custom  treated  as  an  extinguish- 
ment of  the  old  note,  and  that  tlie  same  effect  to  it  should  be  given  by 
the  law.     Plioeuix  Ins.  Co.  v.  Church,  81  N.  Y.  226. 

3  Watkius  V.  Hill,  8  Pick.  522;  Hitter  v.  Singmaster,  73  Pa.  St.  400; 
Goodrich  v.  Tracey,  43  Vt.  314;  Sloman  v.  Cox,  1  C.  M.  &  R.  471.  See 
Pomeroy  v.  Rice,  16  Pick.  22;  Taft  v.  Boyd,  13  Allen,  84;  Dodge  v. 
Emerson,  131  Mass.  407. 

656 


CH.  XIX.]  rvYMEXT   AND    ITS    EFFECTS.  §    380 

bill,  is  not  couchisive,  but  may  be  rebutted  b}^  proof  of  a 
contrary  intention,  whether  the  presumption  was  in  favor 
of  its  absolute  or  conditional  character.  In  some  of  the 
cases  it  has  been  held  that  the  presumption  could  be  re- 
butted by  proof  of  an  express  agreement  to  the  contrary, 
especially  to  rebut  the  presumption  of  a  conditional  pay- 
ment.^ But  the  better  opinion  is  that  the  agreement  may 
be  implied  from  the  surrounding  circumstances.-  As  a 
rule,  however,  the  mere  acknowledgment  of  payment  in 
full,  or  of  payment  in  general,  could  not  be  sufficient  to 
rebut  the  presumption  of  conditional  payment  without  the 
aid  of  corroborating  circumstances.^  But  it  has  been  held 
that  the  words  "  received  and  accepted  in  satisfaction," 
coupled  with  the  giving  of  security  in  the  shape  of  an  in- 
dorsement by  a  third  person,  will  establish  the  presump- 
tion of   an   absolute  payment.*     The   mere  surrender  of  a 

1  Muldou  V.  Whitlock,  1  Cow.  290;  Hays  v.  Stoue,  7  Hill,  128;  Dougal 
V.  Cowles,  5  Day,  511  Glenn  v.  Smith,  2  Gill  of  J.  493;  Coukling  i\  King, 
10  Barb.  372.  See  Booth  v.  Smith,  3  Wend.  G6;  Boyd  v.  Hitchcock,  20 
Johns.  76;  Butts  v.  Dean,  2  Met.  76;  Appleton  v.  Parker,  15  Gray,  173; 
Toilette  V.  Steele,  10  Vt.  30;  Thompson  v.  "Wilson,  27  Ind.370;  Comstock 
V.  Smith,  22  Me.  262;  Shumway  v.  Reid,  34  Me.  560;  Iowa  Co.u.  Foster, 
49  Iowa,  676. 

2  Miller  v.  Lumsden,  16   111.  161;  Gordon  v.  Price,  10  Ired.  385;  Hart. 
V.  Boiler,  15  Serg.  &  R.  162;  Johnson  v.  Cleaves,  15  N.  H.  332;  Merrick 
I'.  Boury,   4   Ohio  St.  60;    Tulford  v.   Johnson,  15- Ala.  384;  Bei-ry  v. 
Griffin,  10  Md.  27;  Slocumb  v.  Holmes,   1  How.  (Miss.)  139;  White  v. 
Howard,  1  Sandf .  81 ;  Harris  v.  Lindsay,  4  Wash.  C.  C.  98,  271. 

3  Maillard  v.  Duke  of  Argyle,  6  Man.  &  G.  40;  Muldon  v.  Whitlock,  1 
Cow.  290;  Putnam  v.  Lewis,  8  Johns.  389;  Tobey  u.  Barber,  5  Johns. 
68;  McLughan  v.  Bovard,  4  Watts,  308;  Hotchin  v.  Secor,  8  Mich.  494; 
Dudgeon  v.  Haggart,  17  Mich.  273;  Burchard  v.  Frazer,  23  Mich.  228; 
Beriy  v.  Griffin,  10  Md.  27;  Glenn  v.  Smith,  2  Gill  &  J.  494;  Steamboat 
Charlotte  v.  Hammond,  9  Mo.  58;  Gardner  v.  Gorhara,  1  Dougl.  (Mich.) 
507;  Feamsterv.  Withrow,  12  W.  Va.  651;  Maze  v.  Miller,  1  Wash.  C.  C. 
328.  But  see  contra  Barron  v.  How,  13  Mart.  (La.)  144.  A  receipt  "  in 
full  when  paid,"  can  only  mean  conditional  payment.  Dayton  u.  Trull, 
23  Wend.  345. 

^  Morris  v.  Harvey,  75  Va.  726. 

42  657 


§    361  PAYMKNT    AND    ITS    KIFECTS.  [CII.   XIX. 

security  is  not  sufficient.^  If  a  «ieditoi-  accepts  the  })ill  of 
a  third  person  in  payment,  when  he  had  the  option  of  tak- 
ing cash  it  is  held  to  be  an  absolute  payment,  and  the 
original  debtor  is  discharged.^  But  it  is  only  a  conditional 
payment  if  the  creditor  has  not  the  option  of  taking  cash.'^ 
As  a  matter  of  course,  any  fraudulent  misrepresentation 
of  material  facts,  in  making  payments  with  bills  and  notes, 
will  render  the  transaction  entirely  void,  and  revive  the 
rights  and  liabilities  of  the  parties  on  the  original  debt.* 

§  381.  Right  of  action  suspended  by  taking  bill  or  note 
in  payment  of  debt.  —  Although  it  is  generally  held  that 
the  acceptance  of  a  bill  or  note,  in  satisfaction  of  a  debt, 
constitutes  only  conditional  payment,  it  suspends  all  right 
of  maintaining  actions  on  the  original  debt,  as  long  as  the 
note  or  bill  given  in  payment  is  not  matured;  the  object  of 
the  suspension  being  the  prevention  of  the  maintenance  of 
separate  actions  upon  both  debts,  and  a  recovery  on  both,  in 
case  the  note  or  bill  should  be  negotiated  before  maturity.^ 
When   the  note  or  bill  falls  due,  the  right  of  action  is  re- 


'  Butts  V.  Dean,  2  Met.  76;  Ponieroy  v.  Rice,  16  Pick.  22;  Fowler  r. 
Ludwig,  34  Me.  455. 

2  Strong  V.  Hart,  6  B.  &  C.  (13  C.  C.  L.  R.)  160. 

3  Marsh  v.  Pcclder,  4  Camp.  257;  Taylor  v.  Briggs,  M.  &  M.  28;  Rob- 
inson V.  Read,  9  B.  &  C.  (17  E.  C.  L.  R.)  444;  Swinyard  v.  Bowes,  5  M. 
&  S.  62. 

*  Hawse  v.  Crowe,  1  R.  &  M.  414;  Bayai-d  v.  Shunk,  1  Watts  &  S.  94; 
Lowrey  v.  Murrell,  2  Port.  280;  Long  v.  Sprull,  7  Jones  L.  9G;  Gurney 
V.  Woraersley,  4  E.  &  B.  (82  Eng.  C.  L.  R.)  133;  Popley  v.  Aslilin,  6  Mod. 
147;  Holt,  121;  Bridge  r.  Batclielder,  9  Allen,  394;  Pierce  u.  Drake,  15 
Johns.  475;  Martin  v.  Peunock,  2  Barr,  376;  Brown  v.  Montgomery,  20 
N.  Y.  287;  Delaware  Bank  v.  Janis,  20  N.  Y.  226;  Fenn  v.  Harrison,  3  T. 
R.  759;  Roget  v.  Merrill,  2  Cal.  117. 

5  Black  V.  Zacliarie,  3  How.  483;  Putnam  v.  Lewis,  8  Johns.  389; 
Stedman  v.  Gooch,  1  Esp.  3;  Griffith  v.  Owen,  13  M.  &  W.  58;  Price  v. 
Price,  16  M.  &  W.  231;  Arraistead  v.  Ward,  2  Pat.  &  H.  504;  Van  Epps  v . 
Dillaye,  5  Barb.  244;  Phoenix  Ins.  Co.  v.  Allen,  11  Mich.  501;  Kearslake 
V.  Morgan,  5  T.  R.  513;  Maier  v.  Cauovan,  57  How.  Pr.  504. 
658 


CH.  XIX.]  PAY3IENT   AND    ITS    EFFECTS.  §    381 

vived,  and  the  creditor  has  the  right  to  elect  on  which 
liability  to  bring  suit.^  But  if  he  brings  suit  on  the  original 
debt,  he  must  either  produce  in  court  and  surrender  the 
note  or  bill  given  in"  payment  of  t«he  debt  sued  on,  or  satis- 
factorily account  for  its  absence,  in  order  to  protect  the 
debtor  agrainst  a  neijotiation  of  the  note  or  bill  before 
maturity,  and  a  consequent  liability  upon  it  to  some  innocent 
purchaser.^ 

In  order  that  the  taking  of  the  bill  or  note  may  operate 
as  a  suspension  of  the  right  of  action  on  the  original  debt, 
the  entire  agreement  in  respect  to  the  satisfaction  of  the 
debt  must  have  been  complied  with.  If  the  agreement  is 
in  part  unperformed,  as  where  the  agreement  was  to  give 
a  note  for  the  debt,  and  to  pay  the  costs  of  a  suit  begun  on 
the  original  debt,  the  failure  to  pay  the  costs  would  enable 
the  creditor  to  proceed  with  his  suit.^  Nor  will  there  be  any 
suspension  of  the  right  of  action  on  the  original  debt,  where 
it  was  under  seal,  and  the  new  obligation  was  not  under 
seal.^  Nor  will  the  taking  of  a  note  or  bill  for  rent  due  pre- 
vent the  lessor  from  proceeding  with  his  remedy  of  distress.^ 

<* 

'  Owenson  v.  Morse,  7  T.  K.  50;  Bank  of  Ohio  Valley  v.  Lockwood, 
13  W.  Va.  426;  Stedman  v.  Gooch,  1  Esp.  4;  Tobey  v.  Barber,  5  Johns. 
68;  Price  v.  Price,  16  M.  &  W.  231. 

-  Cole  V.  Sackett,  1  Hill,  516;  Tobey  r.  Barber,  5  Johns.  66;  Alcockv. 
Hopkins,  6  Cush.  484;  Miller  v.  Lumsdeu,  16  111.  161;  Jones  v.  Savage, 
6  Wend.  658;  Dayton  v.  Trull,  23  Wend.  345;  Smith  u.  Lockwood,  10 
Johns.  367;  Raymond  v.  Merchant,  3  Cow.  150;  Lazier  v.  Nevin,  3  Hag- 
ans  (W.  Va.),  622;  Bank  of  Ohio  Valley  w.  Lockwood,  13  W.  Va.  427; 
Matthews  v.  Dare,  20  Md.  248;  Hays  v.  McClurg,  4  Watts,  452;  Harris 
V.  Johnston,  3  Cranch,  311. 

3  Putnam  v.  Lewis,  8  Johns.  389.  The  same  conclusion  was  reached, 
notwithstanding  the  new  note  had  been  negotiated.  Norris  v.  Aylette,  2 
Camp.  328.  Of  course  payment  of  the  new  note  or  bill  would  satisfy  the 
debt  itself,     Dillon  v.  Rimraer,  1  Bing.  100. 

*  Drake  v.  Mitchell,  3  East,  251;   Curtis  v.  Rush,  2  Ves.  &  B.  416. 

^  Brown  v.  Gillmau,  4  Wheat.  256;  Harris  v.  Shipway,  BuJler  N.  P. 
182;  2  Parsons'  N.  &  B.  164;  Davis  v.  Gyde,  2  A.  &  E.  623;  4  N.  &  M.  462; 
Chipman  v.  Martin,  13  Johns.  241;  Palfrey  v.  Baker,  3  Price,  572. 

659 


§    382  PAYMENT    AND    IIS    EFFKCTS.  [CH.  XIX. 

§  382.  Duties  of  holder  of  bill  or  note  taken  in  pay- 
ment. —  Wherever  a  bill  or  note  is  given  in  payment  of  a 
debt,  whether  precedent  or  contemporaneous,  and  the  debtor 
becomes  liable  on  such  a  bill  or  note  as  a  drawer  or  in- 
dorser,  the  failure  to  exercise  due  diligence  in  the  present- 
ment for  payment,  and  the  giving  notice  of  dishonor,  will, 
according  to  the  weight  of  authority,  not  only  discharge  the 
debtor  of  his  liability  as  drawer  or  indorser,but,  also,  of  his 
liability  on  the  original  debt.^  But  there  are  some  author- 
ities which  maintain  that  the  debtor  should  not  be  dis- 
charged of  his  liability  on  the  original  debt,  unless  he  has 
suffered  an  actual  loss  in  consequence  of  the  laches  of  the 
creditor  in  respect  to  presentment  and  notice;^  applying  to 
that  case  the  same  rule  which  determines  the  liability  of 
the  debtor,  when  the  bill  or  note  is  payable  to  bearer,  and  is 
transferred  by  delivery  and  without  indorsement.  Tn 
every  such  case  the  liability  on  the  original  debt  is  extin- 
guished only  when  some  loss  occurs  from  the  negligence 
of  the  creditor  in  presenting  the  bill  or  note  for  payment,  and 
in  giving  notice  of  dishonor.^ 

•> 

1  Mauney  v.  Coit,  80  N.  C.  300;  Berry  v.  Bridges,  3  Taunt.  130;  Day- 
ton V.  Trull,  23  Wend.  315;  Snntli  v.  Miller,  43  N.  Y.  171;  s.  c.  52  N.  Y. 
546;  Betterton  v.  Roope,  3  Lea  (Tenu.),  220;  Pho^uix  Ins.  Co.  v.  Allen, 
11  Mich.  501;  Blancliard  v.  Tittavawassee  Boora  Co.,  40  Mich.  566; 
Mehlberg  v.  Fisher,  24  Wis.  607;  Allans.  Eldred,  50  Wis.  13(3;  Middle- 
sex V.  Thomas,  5  C.  E.  Green,  39;  Booth  v.  Smith,  3  Weud.  66;  Jeuui- 
son  V.  Parker,  7  Mich.  355;  Tobey  v.  Barber,  5  Johns.  68;  Peacock  v. 
Purcell,  14  C.B.  (n.  s.)  728 ;  Huston  v.  Weber,  3  T.  &  C.  147:  7  Hun,  120. 
The  same  conclusion  is  reached,  where  the  note  or  bill  is  transferred  as 
security  instead  of  in  payment  of  the  original  debt.  Peacock  v.  Purcell, 
supra;  Betterton  v.  Roope,  supra;  Haines  v.  Pcarce;  41  Md.  221;  Law- 
rence V.  McCalmont,  2  How.  426;  Lee  v.  Baldwin,  10  Ga.  208;  Roberts  v. 
Thompson,  14  Ohio,  1 ;  Hamilton  v.  Cunningham,  2  Brock.  350. 

2  Kephart  v.  Butcher,  17  Iowa,  240;  Gallagher's  Exrs.  v.  Roberts,  2 
Wash.  C.  C.  191 ;  2  Am.  Lead.  Cas.  250,  260.  See  Brooks  v.  Elgin,  6  Gill, 
254;  Hamilton  u.  Cunningham,  2  Brock.  350;  Cook  v.  Buck.  10  Humph.  412. 

3  Story  on  Bills,  §  109;  Story  on  Notes,  §  117;  Dayton w.  Trull,  23 
Wend.  345;  Tobey  v.  Barber,  5  Johns.  68.  The  burden  of  proof  is  on 
the  defendant  to  show  the  laches  and  the  damage  flowing  from  the  same. 
Bishop  V.  Rowe,  3  M.  &  Sel.  362;  Goodwin  v.  Coates,  1   M.  &  R.  221. 

660 


CHAPTER    XX. 

FORGERY  AND  ALTERATION  OF  COMMERCIAL   PAPER. 

Section  391.  Defluitiou  and  nature  of  forgery. 

392.  Forgery,  alteration  and  spoliation  distinguished. 

393.  Presumption  as  to  time  of  alteration  and  burden  of  proof. 

394.  What  are  material  alterations. 

395.  What  ai"e  immaterial  alterations  —  Correction  of  mistakes. 
896.  The  effect  of  authorized  alterations. 

397.  Rights  of  bona  fide  holder  of  altered  bill  or  note. 

398.  Effect  of  adoption  of  a  forged  signature  as  one's  own. 

399.  When  one  is  estopped  from  denying  the  genuineness  of 

another's  signature. 

400.  Recovery  of  money  paid  on  forged  instruments. 

§  391.  Definition  and  nature  of  forgery.  —  Forgery  is 
the  counterfeit  making  or  fraudulent  alteration  of  any  writ- 
ing; and,  although  the  more  common  kind  of  forgery  is  the 
signing  of  another's  name,  it  is  just  as  much  a  forgery,  if 
one  should  write  over  the  genuine  signature  of  another, 
what  he  was  not  authorized  to  write,  and  representing 
fraudulently  a  liability  as  a  party  to  a  commercial  instru- 
ment, which  does  not  exist.  ^  Even  the  negotiation  of  a 
paper,  with  a  genuine  signature,  but  with  the  fraudulent 
representation  that  it  is  the  obligation  of  another  person  of 
the  same  name,  is  held  to  be  a  forgery;  ^  and  a  fortiori, 
where  some  false  description  of  the  occupation  or  residence 
of  another  person  of  the  same  name  has  been  affixed  to  the 
otherwise  genuine  sio-nature.'^ 

1  Rex  V.  Hales,  17  State  Trials,  161;  Powell  v.  Commonwealth,  II 
Gratt.  822. 

2  Rex  V.  Parke,  2  Leach  Cr.  Law,  614;  Commonwealth  v.  Foster,  114 
Mass.  311.     But  see  Chitty  on  Bills,  [*780]. 

3  Rex  V.  Webb,  Russ.  &  R.  C.  C.  72;  Rex  v.  Rogers,  8  C.  &  P.  629;  Rex 
V.  Parke,  2  Leach,  775;  Mead  v.  Young,  4  T.  R.  28. 

661 


§    392  FORGERY    AND    ALTERATION    OF    PAPER.        [CH.  XX. 

r'      The  signature  of  a  fictitious  name  is  also  a  forgery,  if 
made  with  intent  to  defraud.^ 

The  "  utterance  "  or  transfer  of  the  falsely  executed  in- 
strument constitutes  the  gist  of  the  offense,  and  without 
such  utterance  there  is  no  crime  of  forgery.  A  mere  dis- 
pluy  of  the  counterfeit  paper,  or  its  delivery  to  another, 
without  any  intention  to  pass  it,  does  not  constitute  an  act 
of  forgery.^  But  any  delivery,  for  the  purpose  of  a  fraud- 
ulent transfer,  even  to  a  confederate  in  the  crime,  com- 
pletes the  crime. ^ 

§  392.  Forgery,  alteration  and  spoliation  distin- 
guished.—  Intent  to  defraud  is  an  essential  element  of 
forgery;  and  in  order  that  an  alteration  of  a  negotiable  in- 
strument may  amount  to  a  forgery,  it  must  be  done  frau  1- 
ulently.  It  is  as  much  forgery,  as  the  making  of  the  in- 
strument outright.*  These  fraudulent  alterations  no'  only 
avoid  the  instrument  itself,  but  also  extinguish  the  debt, 
which  constitutes  the  consideration  of  the  instrument.^ 

If  the  alterations  are  innocently  made,  they  do  not  con- 
stitute forgeries  ;  but  if  they  are  material,  they  will  never- 
theless avoid  the  instrument,  although  the  action  may  be 

*  Lockett's  Case,  1  Leach,  94;  Taft's  Case,  1  Leach,  172;  Commou- 
wealth  V.  Chandler,  Thatch.  Crira.  Cas.  187;  Chitty  on  Bills,  [*782] ;  State 
V.  Givens,  5  Ala.  747;  Brown  v.  People,  8  Hun,  502;  Rex  v.  Ballard,  1 
Leach,  97;  Rex  v.  Dunn,  1  Leach,  C8;  Schultz  v.  Astley,  2  Bing.  N.  C. 
544;  Rex  V.  Whiley,  R.  &  R.  G7;  Gibson  v.  Minet,  1  H.  Bl.  5fi9,  583. 

2  Rex  V.  Shukard,  Russ.  &  R.  200. 

3  Rex  V.  Palmer,  Russ.  &  R.  C.  C.  72.  Transfer  witliout  indorsement 
of  a  forged  note  payable  to  forger's  order  is  an  uttering  of  the  counter- 
feit.    Res  V.  Beckett,  Russ.  &  R.  86;  Rex  v.  Post,  Russ.  &  R.  101. 

*  Wheelocku.  Freeman,  13  Pick,  ir.5;  Belknap  v.  National  Bank,  100 
Mass.  379;  Rex  w.  Treble,  2  Taunt.  328;  Rex  u.  Post,  Russ.  &  Ry.  101; 
Res  V.  Atkinson,  7  Car.  &  P.  CG9. 

5  Wheelock  v.  Freeman,  13  Pick.  165;  Newell  v.  Mayberry,  3  Leigh, 
254;  Merrick  v.   Boury,  4  Ohio  St.  70;   Smith   v.  Mace,  44  N.   H.  553; 
Wallace  v.  Harmstad,  44  Pa.  St.  492;  Cluteu.  Small,  17  Wend.  238;  Meyer 
V.  Hunelie,  55  N.  Y.  412;  Booth  v.  Powers,  56  N.  Y.  31. 
662 


CH.  XX.]       FORGERY    AND    ALTERATION    OF    PAPER.  §    392 

maintained  on  the  consideration  of  the  instrument.  At 
least  this  is  the  ruling  of  some  of  the  English  and  American 
cases, ^  although  the  contrary  view  is  maintained  by  some 
of  the  authorities.^  But  the  authorities  are  unanimous  in 
holding  that  any  material  alteration  avoids  the  instrument 
itself,  and  prevents  the  maintenance  of  any  action  upon  it. ^ 
But,  as  long  as  no  one  has  been  materially  injured  b}"-  the 
innocent  alteration,  it  is  not  without  the  power  of  a  court 
of  equity  to  decree  a  restoration  of  the  instrument  to  its 
original  condition,  and  thus  enable  suit  to  be  maintained  on 
it.*  Whether  a  material  alteration  will  be  presumed  to  be 
fraudulent,  has  been  decided  both  in  the  affirmative  ^  and 
in  the  negative ;  ^  while  it  is  also  held  to  depend  upon  the 
facts  of  each  case  what  is  the  prevalent  presumption,  the  pre- 
sumptions shifting  with  slight  variations  of  the  facts.'     It 

1  Atkinson  v.  Hawden,  2  Ad.  &  E.  (29  E.  C.  L.  R.)  169;  Warren  v. 
Layton,  3  Harring.  404;  Clough  v.  Seay,  49  Iowa,  111;  Hunt  v.  Gray,  35 
N.  J.  L.  227;  Clute  v.  Small,  17  Wend.  288;  Meyer  v.  Hunecke,  55  N.  Y. 
412;  Booth  v.  Powers,  56  N.  Y.  31;  Vogle  v.  Ripper,  34  111.  100;  Sloraan 
V.  Cox,  1  C.  M.  &  R.  471;  Matteson  v.  Ellsworth,  33  Wis.  488;  State 
Sav.  Bank  v.  Shaffer,  9  Neb.  7.  But  if  any  one's  remedy  is  impaired  by 
the  alteration,  he  cannot  be  sued  on  the  debt  or  consideration.  Alder- 
son  V.  Langdale,  3  Barn.  &  Ad.  660. 

2  Bigelow  V.  Stephens,  35  Vt.  525;  Gillette  v.  Smith,  18  Hun,  10;  Mar- 
tendale  v.  Eollett,  1  N.  H.  99.     See  Toomer  v.  Rutland,  57  Ala.  379. 

3  State  Sav.  Bank  v.  Shaffer,  9  Neb.  1;  Angle  v.  N.  W.,  etc.,  Ins.  Co., 
92  U.  S.  342;  Booth  v.  Powers,  36  N.  Y.  31;  Harsh  v.  Klepper,  20  Ohio 
St.  200;  Evans  v.  Foreman,  60  Mo.  449;  Moore  v.  Hutchinson,  69  Mo. 
429. 

4  Chadwick  v.  Eastman,  53  Me.  16;  2  Parsons'  N.  &.  B.  570;  Kountz  v. 
Kennedy,  63  Pa.  St.  187;  Collins  v.  Makepiece,  13  lud.  448;  Nevius  «. 
DeGrand,  15  Mass.  436;  Horst  v.  Wagner,  43  Iowa,  373;  Rogers  v. 
Shaw,  59  Cal.  260.  See  Shepard  v.  Whetstone,  51  Iowa,  457;  Ames  v. 
Brown,  22  Minn.  257.  But  there  can  be  no  restoration  where  the  altera- 
tion was  fraudulent.     Citizens'  Nat.  Bank  v.  Richmond,  121  Mass.  110. 

^  Whitmer  v.  Frye,  10  Mo.  349;  Robinson  v.  Reed,  46  Iowa,  221; 
Wheelock  v.  Freeman,  13  Pick.  165. 

6  Gistu.  Evans,  30  Ark.  286;  Vogle  v.  Ripper,  34  111.  100. 

'  Kountz  V.  Kennedy,  63  Pa.  St.  190  •  Craighead  v.  McLoney,  99  Pa. 
St.  211. 

663 


§    393  FORGEKV    AND    ALTERATION'    OF    PAPER.       [CH.   XX. 

has  also  been  held  ^  and  likewise  doubted,^  that  a  fraudulent 
alteration  avoids  the  instrument,  whether  it  be  material  or 
not. 

If  any  change  is  made  in  the  terras  of  a  paper  by  a 
stranger  to  it,  the  act  is  called  by  some  of  the  authorities 
a  spoliation,  and  not  an  alteration.  And  while  the  English 
and  Scotch  cases  do  not  recognize  any  difference  in  the 
effect  of  an  alteration  and  spoliation,  holding  that  every 
such  material  act,  whether  committed  by  a  stranger  or  by 
a  party  to  the  paper,  avoids  it ;  ^  in  the  United  States  the 
more  liberal  rule  prevails  that  a  spoliation  has  no  effect 
upon  the  liability  of  the  parties  to  the  instrument,  so  long 
as  the  original  words  reraam  legible,  and  free  from  doubt.* 

§  393.  Presumption  as  to  time  of  alteration  and  burden 
of  proof. —  Where  the  alteration  is  so  well  done,  that  it  does 
not  appear  on  the  face  of  the  instrument,  the  burden  of 
proof  is  on  the  party  alleging  the  alteration  ;  ^  and  the  law 
presumes  it  to  have  been  made  contemporaneously  with  the 
execution  of  the  instrument.^ 

1  1  Greenl.  on  Evidence,  568;  Lubberiug  v.  Kohlbrecher,  22  Mo.  598; 
Turner  v.  Billagram,  2  Cal.  523. 

2  Moge  V.  Herndon,  30  Miss.  120  ("  an  iraniaterial  alteration  may  be 
treated  as  no  altei^ation  "). 

3  Master  v.  Miller,  4  T.  R.  320;  2  H.  Bl.  140;  Davidson  v.  Cooper,  11 
M.  &  W.  778;  13  M.  &  W.  243;  Murchie  v.  Macfarlane,  cited  in  Thomson 
on  Bills,  110. 

*  Crockett  v.  Thomason,  5  Sneed,  342 ;  Terry  v.  Hazlewood,  1  Durall 
101;  Ford  v.  Ford,  17  Pick.  418;  Waring  v.  Smitli,2  Barb.  Ch.  119;  Vogle 
V.  Ripper,  34  III.  lOG;  Laugenberger  v.  Kroeger,  48  Cal.  147;  United 
States  V.  Spalding,  2  Mason,  478;  Piersol  v.  Grimes,  30  Ind.  129;  Bigelow 
V.  Stephen,  35  Vt.  521;  Medlin  v.  Platte  &  Co.,  8  Mo.  235;  Lubberiug  v. 
Kolilbrecher,  22  Mo.  596;  Cochran  v.  Nebeker,  48  Ind.  459;  Buckler  v. 
Huff,  53  Ind.  474;  Lee  v.  Alexander,  9.B.  Mou.  25;  Blakey  v.  Johnson,  13 
Bush,  197;  Davis  v.  Carlisle,  5  Ala.  707;  Union  Nat.  Bank  v.  Roberts,  45 
Wis.  373. 

s  Meckel  v.  State  Sav.  Inst.,  36  Ind.  357. 

6  Brooke  v.  Smith,  Mor.  679.  But  see  contra  Emerson  v.  Murray,  4 
N.  H.  171. 

664 


CH.  XX.]       FORGERY    AND    ALTERATION    OF    PAPER.  §    393 

If  the  alteration  is  apparent  on  the  face,  we  find  the 
authorities  giving  contrary  rulings,  and  some  of  the  courts 
are  disposed  to  hold  that  "  it  is  impossible  to  fix  a  cast-iron 
rule  to  control  in  all  cases,"  and  that  the  conclusion  in  each 
case  must  depend  upon  the  surrounding  circumstances  and 
the  facts  of  each  case;  a  question  of  fact,  therefore,  for 
the  jury.^ 

Some  of  the  cases  hold  that  the  alteration  i-s  presumed  in 
any  case  to  have  been  made  at  the  time  of  execution  of  the 
instrument;  at  any  rate,  they  throw  the  burden  of  proof  on 
the  defendant. 2    But  the  preponderance  of  authority  casts 

i  Neil  V.  Case,  25  Kan.  510  (37  Am.  Rep.  259),  Horton,  C.  J.,  saying: 
<'  This  is  a  vexed  question,  and  the  books  are  full  of  diverse  decisions. 
Four  different  rules  are  generally  stated.  First.  That  an  alteration  on 
the  face  of  the  writing  raises  no  presumption  either  way,  but  the  ques- 
tion is  for  the  jury.  Second.  That  it  raises  a  presumption  against  the 
•writing,  and  requires  therefore  some  explanation  to  render  it  admissible. 
Third.  That  it  raises  such  a  presumption  when  it  is  suspicious,  other- 
wise not.  Fourth.  That  it  is  presumed  in  the  absence  of  explanation  to 
have  been  made  before  delivery,  and  therefore  requires  no  explanatiooi  in 
the  first  instance  *  *  *  Generally  the  instrument  should  be  given 
in  evidence,  and  in  a  jury  case  should  go  to  the  jury  upon  ordinary  proof 
of  its  execution,  leaving  the  parties  to  such  explanatory  evidence  of  the 
alteration  as  they  may  choose  to  offer.  If  there  is  neither  intrinsic  nor 
extrinsic  evidence  as  to  when  the  alteration  was  made,  it  is  to  be  pre- 
sumed, if  any  presumption  is  said  to  exist,  that  the  alteration  was  made 
before,  or  at  the  time  of,  the  execution  of  the  instrument.  Perhaps  there 
might  be  cases  when  the  alteration  is  attended  with  such  manifest  cir- 
cumstances of  suspicion  that  the  court  might  refuse  to  allow  the  instru- 
ment to  go  befoi-e  the  jury  until  some  explanation;  but  this  case  is 
not  of  that  character."  See,  in  support  the  text,  Admrs.  of  Beaman  v. 
Russell,  20  Vt.  210;  Bailey  «.  Taylor,  11  Conn.  531;  Kountz  u.  Kennedy, 
63  Pa.  St.  190;  Davis  v.  Jenney,  1  Met.  221. 

2  Sedgwick  v.  Sedgwick,  5  Cal.  213;  Gooch  v.  Bryant,  13  Me.  386; 
Stoner  v.  Ellis,  6  lud.  161 ;  Patterson  v.  Pagan,  38  Mo.  70;  Smiths.  Terry, 
69  Mo.  142;  Dodge  v.  Haskell,  G9  Me.  429;  Cochran  v.  Nebeker,  48  Ind. 
459;  Cumberland  Bank  v.  Hall,  1  Halst.  215;  Baileys.  Taylor,  11  Conn. 
531;  Davis  v.  Jenney,  1  Met.  221;  Famsworthw.  Sharp,  4  Sneed,  55;  Sayre 
V.  Reynolds,  J  South.  737.  See  also  Corcoran  v.  Dale,  32  Cal.  89;  Wil- 
son V.  Harris,  35  Iowa,  507.  In  Paramore  v.  Lindsey,  63  Mo.  57,  the 
court  said:     "  If  nothing  appears  to  the  contrary,  the  alteration  will  be 

665 


§    304  FORGERY    AXD    ALTERATION    OF    PAPER.       [CH.  XX. 

the  burden  of  proof  upon  the  plaintiff ,  and  presumes  the 
alteration  to  have  been  made  after  negotiation  of  the  in- 
strument, whenever  the  alteration  is  apparent  on  the  face; 
on  the  ground  that  a  prudent  indorsee  would  not  have 
taken  the  paper  without  inquiry,  if  the  alteration  had  been 
made  before  its  transfer  to  him  ;  and  at  least  it  is  incum- 
bent on  him  to  prove  that  it  had  been  altered  before  he  re- 
ceived it,^ 

§  394.  What  are  material  alteratious.  —  Any  alteration 
is  material  which  changes  the  liability  of  the  parties  in  any 
way ;  and  the  alteration  avoids  the  paper,  whether  it  is 
favorable  or  unfavorable  to  the  party  making  the  alteration. 
The  alteration  in  any  such  event  affects  the  identity  of  the 
paper  and  avoids  it.^ 

presumed  to  be  contemporaneous  with  the  execution  of  the  instrument. 
But  if  any  ground  of  suspicion  is  apparent  on  tlie  face  of  tlie  instrument, 
the  law  presumes  nothing,  but  loaves  the  question  of  the  time  when  it 
was  done,  as  well  as  the  person  by  whom,  and  the  interest  with  which 
the  alteration  was  made,  as  matters  of  fact  to  be  ultimately  found  by  the 
jury  upon  proof  to  be  adduced  by  the  party  offering  the  instrument  in 
evidence  " 

1  "The  very  fact  that  he  received  it  is  presumptive  evidence  that  it 
was  unaltered  at  the  time;  and,  to  say  the  least,  his  folly  or  his  knavery 
raised  a  suspicion  which  he  ought  to  remove."  Gibson,  C.  J.,  in  Simpson 
V.  Stockhouse,  9  D«irr,  186.  See  to  same  effect.  Hill,  v.  Barnes,  11  N.  H. 
395 ;  Fontaine  v.  Guuter,  31  Ala.  258 ;  White  v.  Haas,  32  Ala.  430 ;  Daniel  v. 
Daniel,  Dudley  239;  McMicker  v.  Beauchamp,  2  La.  (O.  S.)  290;  Wilde  v, 
Armsby,  G  Cusli.  314;  Ruunion  v.  Crane,  4  Blackf.  460;  Walters  v.  Short, 
5Gilm.  252;  Piercy  r.  Piercy,  5  W.  Va.  199;  Heuman?;.  Dickinson,  5  Biug. 
(15  E.  C.  L.  R.)  183;  Kennedy  v.  Lancaster  Co.  Bank,  18  Pa.  St.  347, 
Heffner  v.  Wenrick,  32  Pa.  St.  423;  Wheat  v.  Arnold,  36  Ga.  480;  Willett 
V.  Slicpard,  34  Mich.  106;  Chism  v.  Tooiner,  27  Ark.  109;  Warren  v.  Lay- 
ton,  3  Harr.  404;  Elbert  u.  McClelland,  8  Bush,  577.  But  see  Simpson  v. 
Davis,  119  Mass.  269. 

2  Coburn  v.  Webb,  56  Ind.  100  (postponing  the  accruraeut  of  interest)  ; 
Wood  V.  Steele,  6  Wall.  80  (prolonging  the  time  of  payment)  ;  to  same 
effect,  Lewis  v.  Kramer,  3  Md.  265;  Miller  t'.  Gillelaud,  19  Pa.  St.  119; 
Uuthwaite  v.  Luntley,  4  Camp.  179;  Bathe  v.  Taylor,  15  East,  412;  Lesler 
V.  Rogers,  18  B.  Mon.  528.     The  lessening  of  the  principal  and  interest, 

606 


CH.  XX.]       FORGERY    AND    ALTERATION    OF  RAPER.  §    394 

The  following  are  held  to  be  material  alterations :  Fimt^ 
any  change  in  the  date  of  the  instrument,^  but  not  in  the 
date  of  the  indorsement. ^  Secondly^  any  change  in  the 
time  of  paj'ment.^  TJiird,  any  alteration  in  the  amount  of 
principal  and  interest.*  Fourth,  any  alteration-  in  the 
medium  of  payment,  such  as  making  it  payable  in  gold  or 
specie,^  or  in  the  denomination,  as  from  pounds  to  dollars, 

Stevens  v.  Graham,  7  S.  &  E.  505;  Hewins  v.  Cargill,  67  Me.  554;  JEtua 
Baiik  U.Winchester,  43  Conn.  391;  State  Sav.  Bank  v.  Schaffer,  9  Neb.  7; 
Whitmer  V.  Frye,  10  Mo.  348;  Moore  v.  Hutchinson,  69  Mo.  429. 

1  Master  v.  Miller,  4  T.  R.  320;  2  H.  Bl.  140;  Britton  v.  Dierkes,  46  Mo. 
592;  Overton  v.  Matliews,  35  Ark.  147;  Wood  v.  Steele,  6  Wall.  80;  Wal- 
ton V.  Hastings,  4  Camp.  223;  Outhwaite  v.  Luutley,  4  Camp.  179;  Jacob 
V.  Hart,  2  Stark.  45;  Brown  v.  Straw,  6  Neb.  536;  Owings  v.  Arnott,  33 
Miss.  406.  And  this  is  true,  althougli  the  actual  time  of  payment  has 
not  been  changed,  in  consequence  of  the  day  of  maturity  according  to 
the  original  date  being  Sunday,  and  necessitating  payment  on  the  Satur- 
day previous,  "which  is  the  day  of  maturity  after  the  change  in  the  date. 
Stevens  v.  Graham,  7  Serg.  &  R.  505;  99  Pa.  St.  211. 

2  Griffith  V.  Cox,  1  Tenn.  210. 

3  Miller  v.  Gilleland,  19  Pa.  St.  119 ;  Outhwaite  v.  Luntley,  4  Camp.  179; 
Bathe  v.  Taylor,  15  East,  412;  Lesler  v.  Rogers,  18  B.  Mon.  528;  Wyman 
V.  Yeomans,  84  111.  403;  Murdoch  v.  Lee,  4  Pat.  Ap.  Cas.  (Scotch)  261; 
Long  V.  Moor,  3  Esp.  155,  note;  Anderson  v.  Langdale,  3  B.  &  Ad.  660; 
Lewis  V.  Kramer,  3  Md.  265. 

■*  Bank  of  Commerce  v.  Union  Bank,  3  Corns.  230;  Stevens  v.  Gi'aham, 
7  Serg.  &  R.  505;  Hewins  v.  Caigill,  67  Me.  554;  ^tna  Bank  v.  Winches- 
ter, 43  Conn.  391;  Ogle  v.  Graham  2  Pa.  132;  Harsh  v.  Klepper,  .28  Ohio 
St.  200;  Craigliead  v.  McLoney.  99  ^a.  St.  211;  Sutton  v.  Toomer,  7  B.  & 
C.  416;  Waterman  v.  Vose  43  Me,  504;  Neff  v.  Horner,  63  Pa.  St.  327; 
Dewey  v.  Reed,  40  Barb.  16;  McGrath  v.  Clark,  56  N.  Y.  36;  Schwarz  v. 
Opphold,  74  N.  Y.  307;  Glover  v.  Robbins,  49  Ala.  219;  Boalt  v.  Brown, 
13  Ohio  St.  364;  Lee  v.  Staroird,  55  Me.  491;  Lamar  v.  Brown,  56  Ala. 
157;  Franklin  Life  Ins.  Co.  v.  Courtney,  60  Ind.  349;  Dietz  v.  Harder,  72 
Ind.  208;  Ivoi^  v.  Michael,  33  Miss.  398;  Whitmer  v.  Frye,  10  JIo.  348; 
Moore  v.  Hutchinson,  69  Mo.  429;  Patterson  v.  McNeely,  16  Ohio  St.  348; 
Goodman  v.  Eastman,  4  N.  H.  455;  State  Sav.  Bank  v.  Shaffer,  9  Neb.  7; 
Schnewiud  v.  Hacket,  54  Ind.  248;  Reeves  v.  Pierson,  23  Hun  (30  N.  Y. 
S.  C),  187;  Warrington  v.  Early,  2  El.  &  Bl.  763;  Brown  v.  Jones,  3  Port. 
CAla.)  420;  Fay  v.  Smith,  1  Allen,  477;  Draper  v.  Wood,  112  Mass.  315; 
Kilkelly  v.  Martin,  34  Wis.  525. 

'"  Darwin  v.  Rippey,  63  N.  C.  318;  Church  v.  Howard,  24  N.  Y.  S.  C. 

667 


§    394  FORGERY    AND    ALTERATION    OF    PAPER.        [CH.  XX. 

etc.^  FiftJiy  any  alteration  in  the  personality ,2  number,' 
and  relations  of  the  parties.^  Sixth,  any  change  in  the 
liability  of  the  parties,  as  where  words  are  added  to  make 
the  paper  a  joint,  or  a  joint  arud  seveiral  obligation;  ^  the 
erasure  or  addition  of  words  of  negotiability,^  of  the  words 
♦'  without  recourse"  to  an  indorsement;  '  any  alteration  in 
the  terms    of   the   consideration,  as  by  the  addition  of  a 

(16  Huu)  5;  Auglc  v.  N.  W.,  etc.,  Ins.  Co.,  92  U.S.  330;  Bogarth  v. 
Breedlove,  39  Tex.  561. 

1  Stevens  v.  Graham,  7  S.  &  R.  505.  See  Martendale  v.  Follett,  1  N. 
H.  95;  State  v.  Cilley,  quoted  in  1  N.  H.  97;  Schwalm  v.  Mclntyre,  17 
Wis.  232. 

2  Maliaiwe  Bank  i\  Douglass,  31  Conn.  170;  Brou^ton  v.  Fuller,  9 
Vt.  373;  Davis  v.  Coleman,  7  Ired.  424;  State  v.  Polk,  7  Blackf.  27;  Sraitli 
V.  Weld,  2  Barr.  54;  Macara  v.  Watson,  Thompson  on  Bills,  114;  Rich- 
mond Mfg.  Co.  V.  Davis,  7  Blackf.  412. 

3  Dickermau  v.  Miner,  43  Iowa,  508;  Hamilton  v.  Hooper,  46  Iowa 
516;  Hall  v.  McIIenry,  19  Iowa,  521;  Gardner  v.  Welsh,  5  El.  &  B.  82 
overruling  Catton  v.  Simpson,  8  Ad,  &  El.  136;  Lunt  v.  Silver,  5  Mo.  App 
186;  Mouson  v.  Drakcly,  40  Conn.  552;  Mason  v.  Bradley,  11  M.  &  W 
590;  Cumberland  Bank  v.  Hall,  1  Halst.  215;  Callandar  v.  Kirkpatrick 
Thompson  on  Bills,  112;  McCramer  v.  Thompson,  21  Iowa,  244;  Wallace 
V.  Jewell,  21  Ohio  St.  163;  Gillett  v.  Sweat,  1  Gilm.  475. 

*  Haskell  v.  Champion,  30  Miss.  136;  Lamb  v.  Paine,  46  Iowa,  551. 
In  Vance  v.  Collins,  it  is  held  that  the  erasure  of  the  word  "surety" 
after  one  of  the  signatures  is  not  a  material  alteration.  But  sec  contra 
Rogers  v.  Tapp,  supra;  Lamb  v.  Paine,  siq^ra. 

s  Persiug  V.  Hone,  2  Car.  «Sb  P.  401;  4  Biug.  28;  Humphreys  v.  Guillow, 
13N.  H.  385;  Hemmenway  ?;.  Stone,  7  Mass.  58;  Clark  v.  Blackstock, 
Holt  N.  P.  474.  But  not  so,  if  the  ru'.es  of  procedure  make  all  joint  con- 
tracts joint  and  several.  Miller  v.  Reed,  27  Pa.  St.  244 ;  Gordon  v.  Suth- 
erland, Thompson  on  Bills,  113. 

6  Johnson  v.  Bank  of  United  States,  2  B.  Mon.  310;  State  v.  Stratton, 
27  Iowa,  424;  McAuley  v.  Gordon,  64  Ga.  221;  Scott  v.  Walker,  Dudley 
(Ga.)  243;  Union  N.  B.  v.  Roberts,  45  Wis.  373;  Bruce  v.  Westcott,  3 
Barb.  274;  Pepoon  v.  Stagg,  1  Nott  &  McC.  102;  Brown  v.  Straw,  6  Neb. 
536.  But  not  if  the  words  of  negotiability  were  added  for  ihe  purpose 
of  correcting  a  mistake.  Byron  v.  Thompson,  11  Ad.  &  p]l.  31 ;  Kershaw 
V.  Cox,  3  Esp.  246;  10  East,  437.  See  Cariss  v.  Tattersall,  2  Man.  &  G. 
89u. 

7  Luth  V.  Stewart,  6  Vict.  R.  383. 

6G8 


CH.  XX.]       FORGERY    AXD    ALTERATION    OF    PAPER.  §     394 

specific  consideration/  or  any  other  change  in  the  liability 
of  the  parties,  as  by  making  or  obliterating  memoranda,^ 
or  in  any  other  way.^  So,  also,  the  addition  of  attesting 
witnesses,  whenever  attestation  by  witnesses  affects  the  rights 
of  parties.*  Seventh ^  alterations  in  the  place  of  payment 
either  by  inserting,  changing,  or  erasing  a  specific  place  of 
payment.^  And  this  is  also  true,  even  under  the  statutory 
provisions,  which  dispense  with  the  necessity  of  proving 
presentment  at  the  specific  place  of  payment,  leaving  to  the 
acceptor  or  maker  the  right  to  recover  whatever  dq,mages 
he  may  have  suifered  by  the  failure  to  present  at  the 
named  place  of  payment.*^  But  it  is  held  that  the  drawee 
has  the  right,  on  accepting  a  bill,  to  specify  on  the  bill  a 
place  of   payment  in  the  city  to  which  the  bill  was    ad- 

1  Kuill  V.  Williams,  10  East,  413;  Low  v.  Argrove,  30  Ga.  129;  2  Par- 
sons' N,  &  B.  5G2 ;  Reeves  v.  Piersou,  23  Huu,  185.  But  see  Herich  v. 
Merchants'  Nat.  Bank,  34  Ind.  380;  Bank  of  Commerce  v.  Barrett,  38  Ga. 
126,  where  it  is  held  that  in  the  mere  insertion  of  the  statement  of  a 
specific  consideration  is  not  a  material  alteration. 

2  Warrington  v.  Early,  2  El.  &  Bl.  763;  Woodworth  v.  Bank  of  Amer- 
ica, 19  Johns.  381 ;  Benedict  v.  Cowden,  49  N.  Y.  396;  Wheelock  v.  Free- 
man, 13  Pick.  165;  Wait  v.  Pomeroy,  20  Mich.  425;  Johnson  v.  Heagan, 
23  Me.  329.  • 

3  Commonwealth  v.  Ward,  2  Mass.  397;  Blake  v.  Coleman,  22  Wis. 
415.  See  Warner  v.  Spencer,  7  J.  J.  Marsh.  340;  Muldrow  v.  Baldwell, 
7  Mo.  587;  2  Parsons'  N.  &  B.  545. 

4  Eddy  V.  Bond,  19  Me.  461;  Brackett  v.  Mountfort,  11  Me.  115.  See 
Homer  v.  Wallis,  11  Mass.  309;  Adams  v.  Frye,  3  Mete.  107. 

s  Nazro  v.  Fuller,  24  Wend.  374 ;  Whitesides  v.  Northern  Bank,  10 
Bush,  501;  Townsend  v.  Star  Wagon  Co.,  10  Neb.  615;  Bank  of  Ohio 
Valley  v.  Lockwood,  13  W.  Va.  392;  Tidmarsh  v.  Grover,  1  Maule  &  S. 
735;  Cowie  v.  Halsall,  4  B.  &  Aid.  197;  Rex  v.  Treble,  2  Taunt.  328; 
Burchfield  v.  Moore,  25  L.  &  Eq.  123;  5  El.  &  B.  683;  Sudler  v.  Collins,  2 
Houst.  538;  Morehead  v.  Parkersburg  Nat.  Bank,  5  W.  Va.  74. 

6  Mackintosh  v.  Haydon,  Ry.  &  M.  362;  Cowie  v.  Halsall,  4  B.  &  Aid. 
497;  Gardner  v.  Walsh,  5  El.  &  B.  83;  Burchfield  v.  Moore,  5  El.  &  B. 
683;  Desbrowe  v.  Weatherby,  1  M.  &  Rob.  438;  Hill  v.  Cooley,  46  Pa.  St. 
259;  White  v.  Haas,  32  Ala.  430;  Nazro  v.  Fuller,  24  Wend.  375;  Oakey 
V.  Wilcox,  3  How.  (Miss.)  330,  where  it  constitutes  a  memorandum. 
But  see  contra  Am.  Nat.  Bk.  v.  Bangs,  42  Mo.  454. 

669 


§    3L»5  FORGERY    AND    ALTERATION    OF    TAPER.        [fll.  XX. 

dressed,  the  i)laeo  designated  1)V  him  beiue:  considered 
mereh'  as  a  substitute  for  his  residence  or  place  of  busi- 
ness.^ But  he  cannot  designate  a  phice  of  payment  in  any 
other  city  or  town.- 

§  395.  What  are  immaterial  alterations  —  Correction 
of  mistakes. — An  alteration  is  immaterial,  whenever  it 
does  not  change  the  legal  effect  of  the  instrument,  as  where 
words  are  added  which  arc  implied  by  law,  or  where  words 
of  no  legal  importance  are  either  stricken  out  or  added. 
Thus  the  writing  out  of  the  name  of  the  bank  after  its 
cashier's  signature  as  ''cashier,"  is  an  immaterial  altera- 
tion.' Of  the  same  character  is  changing  the  marginal 
figures  to  conform  to  the  written  statement  of  the  amount ;  ^ 
any  change  in  the  names  of  the  i)arties,  which  does  not 
affect  their  legal  personalities ;  ^  and  any  other  change  in 
phraseology,  which  does  not  affect  the  legal  liability  of  the 
parties.®     Immaterial  memoranda   are  placed  on  the  same 

1  Troy  City  Bank  v.  Laumau,  19  N.  Y.  480;  Niagara  Dist.  Bank  v. 
Fairraan,  31  Barb.  405;  Shuler  v.  Gillette,  19  N.  Y.  S.  C.  (12  Hun)  280. 
And  tliis  is  permitted,  even  tliougli  tlie  bill  is  made  payable  at  a  partic- 
ular counting-house  or  office  in  the  city.  Troy  City  "Bank  v.  Laumau, 
supra. 

2  Rowe  v.  Young,  2  B.  &  B.  105;  Walker  v.  Bank  of  State  of  N.  Y.,  13 
Barb.  637;  Niagara  Dist.  Bank  v.  Fairmau,  31  Barb.  404.  But  see  Todd 
V.  Bank  of  Ky.,  3  Bush,  606;  Rogers  v.  Posters,  1  Mete.  (Ky.)  G45. 

3  Folger  V.  Chase,  18  Pick.  63 ;  Bank  of  Genesee  v.  Patchin  Bank,  3 
Kern,  309. 

4  Smith  V.  Smith,  1  R.  I.  398.     See  ante,  §  28. 

»  Blair  v.  Bank  of  Tennessee,  11  Humph.  84;  Arnold  v.  Jones,  2  R.  I. 
345;  Manchetv.  Cason,  1  Brew.  307;  Farquhar  v.  Southey,  M.  &  M.  14: 
Desby  ?7.  Thrall,  44  Vt.  414;  Cole  v.  Hill,  44  N.  H.  227.  This  is  tnie 
where  the  change  consists  in  the  addition  or  su))traction  of  a  mere  de- 
scnptio  personce.  Manufacturers',  etc.,  Bank  w.  Follett,  11  R.  I.  92;  Bur- 
lingame  v.  Brewster,  79  111.  515;  Hayes  v.  Mathews   63  Ind.  412. 

6  Holland  v.  Hatch,  15  Ohio  St.  464;  Cushing  v.  Field,  70  Me.  50; 
Houghton  V.  Francis,  29  111.  244  (the  insertion  of  dollar  mark  before  the 
numerals) ;  Leonard  v.  Phillips,  39  Mich.  782  (inserting  tlie  word  "  annu- 
ally" after  interest  clause  in  a  note  which  was  made  payable  at  a  cer- 
670 


CH.  XX.]       FORGERY    AND    ALTERATION    OF    TAPER.  §    396 

footing,  and  where  they  do  not  affect  the  legal  liability, 
they  may  be  changed  or  erased  at  pleasure.^  Thus,  the 
fio-ures  in  the  margin,  which  denote  the  number  of  the  in- 
strument  in  a  particular  series,  the  number  of  the  check, 
note  or  bond,  may  be  changed  without  constituting  a  ma- 
terial alteration.^ 

Of  the  same  character  are  any  changes  in  phraseology, 
which  are  intended,  in  correcting  the  mistakes  of  the  par- 
ties, to  conform  the  instrument  to  the  intentions  of  the 
parties.  They  are  held  to  be  no  alterations,  although  they 
do  work  a  material  chansre  in  the  instrument.^ 

§  396.  The  effect  of  authorized  alterations. — If  the 

alteration  is  made  with  the  consent  of  the  parties,  it  has 
the  effect  of  making  a  new  contract,  and  substituting  the 
new  for  the  old.  If  all  the  parties  consent  to  the  altera- 
tion, all  are  bound;  but  if  only  a  portion  of  them  give  their 
assent  to  the  change  they  will  be  bound,  while  those  whose 
consent  is  not  obtained  will  be  discharged.^ 

tain  time),  Cooley,  J.,  saying  tliat  in  such  a  note  "  ttie  rate  of  interest  to 
be  paid  annually  must  be  understood  as  naming  only  the  rate  to  be  paid 
for  the  yearly  period."  Leonard  v.  Wilson,  2  Cromp.  &  M.  589  (correct- 
ing a  misspelling) ;  Reed  v.  Roark,  14  Tex.  329  (writing  over  in  ink  a 
word  written  in  pencil) ;  Dunn  v.  Clements,  7  Jones  L.  58  (retracing  with 
darker  ink  a  faded  name  or  word) ;  Hanson  v.  Crawley,  41  Ga.  308  (the 
insertion  of  a  statement  of  the  specific  consideration). 

1  Bachellor  v.  Priest,  12  Pick.  399;  Struthers  v.  Kendall,  5  Wright, 
214;  Walter  v  Cubley,  2  Cr.  &  M.  151. 

2  City  of  Elizabeth  v.  Force,  29  N.  J.  Eq.  591,  overruling  «.  c.  28  N.  J. 
Eq.  587;  Berdsell  v.  Russell,  29N.Y.  220;  Commonwealths.  Industrial 
Sav.  Bank,  98  Mass.  12;  State  ex  rel.  PJocku.  Cobb.  64  Ala.  158. 

3  Bruttu.  Piccard,  R.  &  M.  273;  McRaven  v.  Crissler,  53  Miss.  542; 
Duker  i?.  Franz,  7  Bush,  273;  Waugh  v.  Russell,  1  C.  Marsh.  214;  5 
Taunt.  707 ;  Boyd  v.  Brotherson,  10  Wend.  93 ;  Hunt  v.  Adams,  6  Mass. 
519;  Kershaw  v.  Cox,  3  Esp.  246;  10  East,  437;  Jacobs  v.  Hart,  2  Stark. 
45;  Clute  v.  Small,  17  Wend.  242;  Pease  v.  Dwight,  6  How.  190;  Connor 
V.  Routh,  7  How.  (Miss.)  176. 

*  Wilson  V.  Jamison,  7  Barr,  126;  Crimstead  v.  Briggs,  4  Iowa,  559; 
Bank  of  Ohio  Valley  v.  Lockwood,  13  W.  Va.  392;  Broughtou  v.  Fuller, 

671 


§    397  FORGERY    AND    ALTERATION    OF    PAPER.       [CH.   XX. 

Whether  the  alteration  is  material,  is  a  question  of  law 
for  the  court ;  ^  but  it  is  a  question  for  the  jury  whether  it 
was  made  with  the  consent  of  the  parties. ^ 

The  alteration  may  be  authorized  in  advance,  or  it  may 
subsequently  be  ratified. "^  It  may  be  express  or  implied 
from  commercial  custom,^  or  from  the  acts  of  the  parties.^ 
But  the  subsequent  act  cannot  amount  to  a  ratification, 
except  as  to  bona  fide  holders  without  notice,  if  the  party 
so  acting  did  not  at  the  time  know  of  the  alteration.^ 

§  397.  Rights  of  bona  fide  holder  of  altered  bill  or 
note.—  If  the  party,  whose  liability  has  been  changed  by 
the  alteration,  could  not,  by  the  exercise  of  reasonable 
diligence,  have  prevented  it,  he  is  not  liable  on  the  paper, 
even  to  a  bona  fide  holder.  But  if  he  has  so  executed  the 
paper,  viz. :  by  leaving  blank  and  uncancelled  spaces,  as 
to  enable  alterations  to  be  made  in  such  a  way  as  not  to 
excite  the  suspicions  of  a  reasonably  prudent  man,  such  a 
party  is  guilty  of  negligence,  which  renders  him  liable  on 

9  Vt.  373;  Wills  v.  Wilson,  3  Ore.  308;  Myers  v.  Nell,  84  Pa.  St.  369. 
Under  English  stamp  acts  it  is  held  that  no  change  can  be  made  after  the 
issue  of  the  instrument  even  with  the  consent  of  the  parties.  Bowman 
V.  Nichol,  5  T.  R.  547;  DoTvnes  v.  Richardson,  5  B.  &  Aid.  Q,74;  Bathe  v. 
Taylor,  15  East,  412. 

1  Stevens  v.  Graham,  7  Serg.  &  R.  505;  Jones  v.  Ireland,  4  Iowa,  63; 
Bowers  v.  Jewell,  2  N.  H.  543. 

2  Stahl  V.  Berger,  10  Serg.  &  R  170;  Stout  v.  Cloud,  5  Lit.  205;  Over- 
ton V.  Mathews,  35  Ark.  147. 

3  Morrison  v.  Smith,  13  Mo.  234;  National  State  Bank  v.  Rising,  11  N. 
Y.  S.  C.  (4  Hun)  793;  Cariss  v.  Tattersall,  2  Man.  &  G.  890;  Humphreys 
r.  Guillow,  13N.  H.  385. 

*  Woodworth  v.  Bank  of  America,  19  Johns.  391. 

5  Bowers  v.  Jewell,  2  N.  H.  543;  Clute  v.  Small,  17  Wend.  238;  Ker- 
shaw f.  Cox,  3  Esp.  246  (subsequent  indorsement  of  an  instrument  to 
which  words  of  negotiability  had  been  added)  ;  Cariss  v.  Tattersall,  2 
Man.  &  G.  890  (subsequent  payment  of  interest  with  knowledge  of  alter- 
ation) ;  Humphreys  v.  Guillow,  13  N.  H.  385  (promise  to  pay  after  know- 
ing of  the  alteration.) 

6  Fraker  v.  Cullom,  21  Kan.  555. 

672 


CH,  XX.]       FORGERY    AND    ALTERATIOX    OF    PAPER.  §    397 

the  altered  iustrument  to  a  bona  fide  holder. ^  The  same 
conclusion  is  reached,  where  a  part  of  the  instrument  had 
been  written  in  pencil,  and  had  subsequently  been  erased. ^ 
But  the  authorities  are  not  in  harmony  on  this  question, 
and  a  number  of  authorities  are  to  be  found,  which  deny 
that  the  bona  fide  holder  has  a  right  of  action  in  any  case 
against  the  parties  to  an  instrument,  which  has  been 
altered  without  their  consent.^ 

It  has  also  been  held  that  where  one  writes  on  the  paper 
a  memorandum  in  such  a  way  that  it  can  be  detached 
Avithout  leaving  marks  of  suspicion,  he  will  be  liable  on 
the  instrument,  without  the  memorandum,  to  a  bona  fide 
holder,  who  takes  it  without  notice.* 

But  in  order  that  the  party  may  still  be  bound  to  the 
bona  fide  holder,  the  alteration  must  have  been  made  so 
as  not  to  arouse  the  suspicion  of  a  prudent  man ;    and  it 

1  "  It  is  the  duty  of  the  maker  of  the  note  to  guard  uot  only  himself, 
but  the  public,  against  frauds  and  alterations  by  refusing  to  sign  nego- 
tiable paper  made  on  such  a  form  as  to  admit  of  fraudulent  practices 
upon  them  with  ease  and  without  ready  detection."  Zimmerman  v.  Rote, 
7.1  Pa.  St.  188.  See  also  to  the  same  effect,  Brown  v.  Reed,  79  Pa.  St.  370 ; 
Blakey  v.  Johnson,  13  Bush,  20-t;  Van  Duzer  v.  Howe,  21  N.  Y.  538; 
Isnard  v.  Tawes,  10  La.  Ann.  103;  Young  v.  Lehman,  G3  Ala.  519;  Toomer 
r.  Rutland,  57  Ala.  379;  Garrard  v.  Hadden,  67  Pa.  St.  82;  Yocum «. 
Smith,  63  111.  321;  Raiubolt  v.  Eddy,  34  Iowa,  440;  Vischerw.  Webster,  8 
Cal.  109;  Redlich  v.  Doll,  54  N.  Y.  237;  Kitchen  v.  Place,  41  Barb.  465. 
But  see  McGrathw.  Clark,  56  N.  Y.  36;  Young  v.  Grate,  4  Bing.  253,  which, 
however,  has  been  questioned,  if  not  overruled  in  Bank  of  England  v. 
Evans,  5  H.  of  L.  Gas.  389;  Bazeudale  v.  Bennett,  L.  R.  3  Q.  B.  D.  525; 
47  L.  J.  Q.  B.  624;  26  W.  R.  899;  33  Am.  Rep.  137;  40  L.  T.  R.  23,  Bram- 
well,  L.  J. 

-  Harvey  v.  Smith,  55  111.  224,  Seibel  v.  Vaughn,  69  111.  257.  See  also 
Elliott  V.  Levings,  55  lU.  214. 

3  Holmes  v.  Trumper,  22  Mich.  427;  Washington  Sav.  Bank  v.  Ekey, 
51  Mo.  273;  Greenfield  Sav.  Bank  v.  Stowell,  123  Mass.  196.  See  linox- 
ville  Nat.  Bank  v.  Clark,  51  Iowa,  264;  Abbott  v.  Rose,  62  Me.  194. 

*  Noll  V.  Smith,  64  lud.  511 ;  Carnell  v.  Nebeker,  58  Ind.  425;  Phelan  v. 
Moss,  67  Pa.  St.  59;  Zimmerman  v.  Rote,  75  Pa.  St.  188.  But  see  contra 
Wait  V.  Pomcroy,  20  Mich.  425;  Benedict  v.  Cowden,  49  N.  Y.  396;  Ger- 
rish  V.  Glines,  56  N.  H.  9. 

43  .     673 


§    398  FORGERY    AND    ALTERATION    OF    PAPER.        [CH.   XX. 

must  have  become  possible  through  the  negligence  of  the 
party  to  the  obligation.  If  the  alteration  is  unconcealed,^  or 
the  obligor  has  not  been  guilty  of  negligence,  the  bona 
fide  holder  cannot  recover. ^ 

§  398.  Effect  of  adoption  of  a  forged  signature  as  one's 
own, — What  effect  the  adoption  of  a  forged  signature  as 
one's  own  will  have,  depends  upon  the  attending  circum- 
stances. If  a  bona  fide  holder  takes  the  paper  in  reliance 
upon  the  adoption  or  acknowledgment  of  the  signature,  the 
party  acknowledging  it  will  be  bound  by  the  forged  signa- 
ture.^ If  no  one  is  misled  by  the  acknowledgment,  and 
it  is  made  under  the  mistaken  belief  that  the  signature  was 
genuine,  the  party  so  acknowledging  is  not  bound  by  it, 
after  he  discovers  his  error.*     But  the  authorities  are  divided 

1  Angle  V.  N.  W.,  etc.,  Ins.  Co.,  92  U.  S.  324;  Paramore  v.  Lindsey,  63 
Mo.  63. 

2  Hall  V.  Fuller,  5  Bam.  &  C.  750;  Garrard  v.  Hadden,  67  Pa.  St.  82; 
Worrall  v.  Greeu,  3  Wright,  388;  Trigg  v.  Taylor,  27  Mo.  245.  A  good 
example  of  an  alteration  for  which  the  maker  is  not  responsible  is  the 
somewhat  common  fraud  of  patent  vendors  in  agricultural  communities, 
practiced  by  inducing  the  victim  to  sign  the  following  instrument,  under 
the  impression  that  it  was  a  written  appointment  as  agent: — 

North  East,  April  3,  1871. 

Six  months  from  date  I  promise  to  pay  to  J.  B.  Smith  or  *    bearer  fifty  dollars   when  I  sell  by 

order.     Two     Hundred     and     Fifty     Dollars  worth  of  hay  and  harvest  grinders, 

for    value    received,    with    legal     interest,     without  appeal     and     also    without 

defalcation   or  stay   of   execution.  ,    ,    . 

T.  H.  Brown.    *    Agent  for  Hay  &  Harvest  Grinders. 

The  paper  was  so  written  that  no  suspicion  was  aroused ;  but  after  its 
execution  it  was  cut  into  two  parts  where  the  asterisks  aie  placed,  and 
the  one  part  becomes  a  complete  promissory  note,  but  it  was  held  that 
even  a  bona  fide  holder  could  not  recover  on  it.  Brown  v.  Reed,  79  Pa. 
St.  370. 

3  Workman  v.  Wright,  33  Ohio  St.  405  (31  Am.  Rep.  546) ;  CascoBank 
V.  Keene,  53  Me.  104;  Dow  v.  Sperry,  29  Mo.  390;  Beeman  v.  Duck,  11 
M.  &  W.  251;  Leach  v.  Buchanan,  4  Esp.  226;  Woodruff  u.  Munroe,  33 
Md.  158;  Greenfield  Bank  u.  Crafts,  4  Allen,  447;  Crout  v.  DeWolf,  1  R.  I. 
393;  Rndd  v.  Mathews,  79  Ky.  479  (37  Am.  Rep.  704)  ;  Hefner  v.  Dawson, 
63  111.  403. 

*  Woodruff  77.  Munroe,  33  Md.  158. 

674 


CH,  XX.]       FORGERY    AND    ALTERATION    OF    PAPER.  §    399 

as  to  the  effect  of  a  deliberate  adoption  of  a  forged  signa- 
ture, when  no  one  is  misled,  some  holding  that  the  party 
is  bound  by  it  as  a  ratification  of  an  unauthorized  agency;^ 
while  others  deny  his  liability,  on  the  ground  that  there  is 
no  consideration  for  the  adoption,  which  amounts  to  a 
promise,  except  possibly  the  express  or  implied  promise  to 
refrain  from  criminal  prosecution,  which  would  be  a  void 
consideration.^ 

If  it  can  be  shown  that  the  drawee  or  acceptor  was  in  the 
habit  of  paying  bills,  on  which  his  acceptance  was  forged 
by  a  certain  individual,  he  will  be  held  liable  by  adoption 
on  all  such  acceptances.^  But  he  will  be  liable  only  when 
he  has  by  his  conduct  induced  the  person  taking  the  paper 
to  believe  that  the  acceptances  were  genuine.* 

§  399.  When  one  is  estopped  from  denying  tlie  genu- 
ineness of  another's  signature.  —  The  maker  of  a  note  is 
never  estopped  from  denying  the  genuineness  of  the  other 
signatures,  unless  some  one  or  more  of  them  were  already 
on  the  note,  when  the  maker  negotiated  it.  In  that  case, 
the  maker  guarantees  the  genuineness  of  those  signatures,^ 
and  the  same  rule  holds  good  of   the  drawer.^     But    the 

1  Ashpitel  V.  Bryan,  3  B.  &  S.  492;  32  L.  J.  Q.  B.  91;  7  L.  R.  T.  (n. 
s.)  706;  Howard  v.  Duucan,  3  Lansing  175;  Gi'eenfield  Bank  v.  Crafts,  4 
Allen,  447;  Wellington  v.  Jackson,  121  Mass.  157;  Casco  Bank  v.  Keene, 
53  Me.  103;  Forsythe  v.  Bonta,  5  Bush,  547. 

2  Shisler  v.  Van  Dyke,  92  Pa.  St.  449  (31  Am.  Rep.  553) ;  Brook  v. 
Hook,  L.  R.  6  Exch.  89  (31  Am.  Rep.  549);  McKeuziev.  British  Linen  Co. 
44  L.  T.  R.  431 ;  Kernau  v.  London  Discount  &  M.  Bank,  4  Vict.  R.  279; 
Workman  v.  Wright,  32  Ohio  St.  405  (31  Am.  Rep.  547)  ;  McHugh  v. 
Schuylkill  County,  7  P.  F.  Smith,  391  (5  Am.  Rep.  447)  ;  Pearsall  v. 
Chapin,  8  Wright,  9;  Negley  v.  Lindsay,  17  P.  F.  Smith,  217. 

3  Barber  v.  Gingell,  3  Esp.  60;  Grout  v.  De  Wolf,  1  R.  I.  393. 

*  Morris  v.  Bethell,  L.  R.  5  C.  P.  47;  Mather  v.  Lord  Maidstone,  18  C. 
B.  (^N.  s.)  273;  37  Eng.  L.  &  Eq.  335. 

5  Hortsraan  v.  Henshaw,  11  How.  177;  Meacher  v.  Fort,  3  Hill  (S.  C), 
227;  Beaman  v.  Duck,  11  M.  &  W.  251. 

"  Coggill  V.  Am.  Esch.  Bank,  1  Corast.  113;  Hortsman  v.  Henshaw,  11 
How.  177;  Meacher  v.  Fort,  3  Hill  (S.  C.),'227. 

675 


§    3119  FORGERY    AND    ALTERATIOX    OF    PAPER.        [cil.   XX. 

drawee,  by  acceptiug  the  bill,  giuirautees  the  genuhieness 
of  the  drawer's  signature,  and  is  bound,  whether  the  holder 
received  the  bill  before  or  after  acceptance  ;  ^  although  some 
of  the  authorities  are  disposed  to  question  the  power  of  one 
who  takes  the  bill  before  acceptance  to  hold  the  drawee  on 
his  acceptance,  wdiere  the  drawer's  signature  is  forged,  on 
the  ground  that  the  payee  or  holder  is  himself  guilty  of 
neo-lio-ence  in  not  inquiring  after  the  genuineness  of  the 
drawer's  signature. ^  It  has,  however,  been  said  that  there 
are  two  exceptions  to  this  general  rule,  that  the  drawee  is 
estopped  from  denying  the  signature  of  the  drawer :  firsts 
when  the  payee  demands  payment ;  ^  and  seconriZy,  where 
both  parties  are  mutually  in  fault.* 

The  drawee  only  guarantees  the  genuineness  of  the  sig- 
nature, and  not  of  the  contents  of  the  bill.  If  the  forgery 
consisted  of  an  alteration  of  the  contents,  the  acceptor 
would  not  be  liable  on  the  bill  to  the  holder.^  Nor  does 
the  drawee  by  his  acceptance  guarantee  the  genuineness  of 
the  indorsements.^     And  this  is  true,  even  though  one  of 

1  National  Park  Bank  v.  Ninth  National  Bank,  46  N.  Y.  81;  Bank  of 
Commerce  v.  Union  Bank,  3  Comst.  235;  Goddard  v.  Merchants'  Bank, 
4  Comst.  149;  Gloucester  Bank  v.  Salem  Bank,  17  Mass.  43;  Canal  Bank 
V.  Bank  of  Albany,  1  Hill,  239;  Stout  v.  Benoist,  39  Mo.  280;  Bernheimer 
V.  Marshall,  2  Minn.  81.  See  also  National  Bank  of  Commerce  v.  Nat. 
M.  B.  Assn.,  55  N.  Y.  213;  White  v.  Cent.  Nat.  Bank,  64  N.  Y.  322;  Price 
V.  Neal,  3  Burr.  1355;  Smith  v.  Mercer,  6  Taunt.  70;  1  Marsh.  453;  Bank  of 
United  States  v.  Bank  of  Georgia,  10  Wheat.  333.  But  see  Allen  v. 
Fourth  Nat.  Bank,  59  N.  Y.  12. 

2  Ellis  V.  Ohio  Life  Ins.  etc.,  Co.,  4  Ohio  St.  632,  McKleroyw.  Southern 
Bank  of  Ky.,  14  La.  Ann.  458 ;  Canal  Bank  v.  Bank  of  Albany,  1  Hill,  287; 
•2  Daniel's  Negot.  In.st.,  §§  1361,  1362. 

3  Redfield  &  Bigelow's  Lead.  Cas.  664. 

4  Redfield  &  Bigelow's  Lead.  Cas.  665;  Ellis  v.  Ohio  Life  Ins.  Co.,  4 
Ohio  St.  028;  National  Bank  of  N.  A.  v.  Bangs,  100  Mass.  441. 

5  White  V.  Continental  Nat.  Bank,  04  N.  Y.  317;  Kingston  Bank  v. 
Eltinge,  40  N.  Y.  323;  Bank  of  Commerce  v.  Union  Bank,  3  Comst.  230; 
Young  V.  Lehman,  63  Ala.  519. 

e  White  v.  Continental   Bank,  64  N.  Y.  320;  Johnson  v.  First  Nat. 

676 


CH.  XX.]       FORGERY   AND    ALTERATION    OF    PAPER.  §    400 

the  indorsements  is  by  the  drawer,  where  the  bill  had  been 
njade  payable  to  the  order  of  the  drawer.^  If,  however, 
the  drawee  accepts  and  negotiates  a  bill  with  the  knowl- 
edge that  a  forged  indorsement  is  on  the  bill,  he  cannot 
deny  the  genuineness  of  that  indorsement.^  Nor  can  he 
recover  back  the  money  paid  on  a  forged  indorsement 
where  the  indorsement  was  on  the  bill  when  it  was  drawn 
and  accepted.^  But  the  indorser,  as  well  as  the  transferrer 
by  delivery,  is  estopped  from  denying  the  validity  of  the 
signature  of  any  party  to  the  instrument,  whose  name 
was  on  the  paper  when  he  transferred  it.  He  guarantees 
the  validity  of  his  title  in  every  respect,  which  would  be 
invalidated  if  any  of  the  signatures  had  been  forged.* 

§  400.  Recovery  of  money  paid  on  forged  instru- 
ments.—  In  conformity  with  the  general  rule  of  law,  that 
money  paid  under  a  mistake  of  fact  may  be  recovered 
back,^  any  party  to  a  forged  negotiable  instrument  may 
recover  back  money  paid  on  it  under  the  mistaken  belief 

Bank,  13  N.  Y.  S.  C.  (6  Huu)  124;  Talbot  v.  Bank  of  Rochester,  1  Hill, 
295;  Smith  v.  Chester,  1  T.  R,  654;  Canal  Bank  v.  Bank  of  Albany,  I 
Hill  (N.  y.),  287;  United  States  v.  Nat.  Park  Bank,  6  Fed.  Rep.  852. 

1  Beaman  v.  Duck,  11  M.  &  W.  251;  Robinson  v.  Yarrow,  7  Taunt. 
455;  "Williams  v.  Drexel,  14  Md.  566,  But  see  contra  Cooper  v.  Meyer, 
10  B.  &  C.  468,  5  Man.  &  G.  387,  where  the  signature  of  the  drawer  and 
of  the  first  indorsement  was  of  a  fictitious  name. 

2  Beaman  v.  Duck,  11  M.  &  W.  251. 

3  Hortsraan  v.  Henshaw,  U  How.  177;  Coggill  v.  Am.  Exch.  Bank,  1 
Comst.  113. 

4  MacGregor  v.  Rhodes,  6  El.  &  B.  266;  State  Bank  v.  Flaring,  16 
Pick.  533;  Smith  v.  McNair,  19  Kan.  330;  White  v.  Continental  Nat. 
Bank,  64  N.  Y.  320;  Burgess  v.  Northern  Bank  of  Ky.,  4  Bush,  600; 
Cabot  Bank  v.  Morton,  4  Gray,  157;  Lyons  v.  Millery,  6  Gratt.  439.  See 
ante  chapters  on  Transfer  in  General,  and  by  Indorsement. 

*  Louisiana  V.  "Wood,  102  "U.  S.  298;  Carpenter  v.  Northborough  Nat. 
Bank,  123  Mass.  69;  Nat.  Bank  of  N.  A.  v.  Bangs,  106  Mass.  441;  Boyl- 
ston  Nat.  Bank  v.  Richardson,  101  Mass.  287;  Welch  v.  Goodwin,  123 
Mass.  71;  Merriam  v.  Wolcott,  3  Allen,  258;  Moses  v.  McTerlar,  2  Burr. 
1005;  Young  v.  Lehman,  63  Ala.  523. 

677 


§    400  FORGERY    AND    ALTERATION    OF    PAPER.       [CH.  XX. 

in  its  genuineness,  provided  he  is  not  guilty  of  any  negli- 
gence in  notifying  the  payee  of  his  discovery  of  the 
forgery,  which  results  in  damage  to  others.^  According 
to  the  English  law,  the  notice  of  the  forgery  must  be  given 
soon  enouofh  to  enable  the  holder  to  give  the  notice  of  dis- 
honor  required  in  order  to  hold  the  indorsers  ;  in  other 
words,  the  forgery  must  be  discovered  and  notice  given  to 
the  payee  within  twenty-four  hours  after  payment,  where 
there  are  intermediate  indorsers.'^  But  a  more  liberal  rule 
prevails  in  the  United  States,  and  all  that  is  required  in 
order  to  recover  back  the  money  paid  is  to  give  notice  to 
the  payee  within  a  reasonable  time  after  the  discovery  of 
the  forgery.^  And  the  same  rule  has  been  applied  to  the 
payment  of  money  by  banks  on  the  forged  checks  of  their  de- 
positors.* The  notice  must  be  given  within  a  reasonable  time 
after  thediscovery  of  the  forgery,  whether  there  are  indorsers 
or  not.^  Where  the  instrument  is  an  utter  forgery,  it  is 
not  necessary  to  return  it  with  a  demand  for  the  repayment 
of  the  money  paid  on  it ;  but  if  there  are  some  genuine  signa- 
tures on  it,  it  must  be  returned,  so  that  the  payee  may  pro- 
ceed against  the  other  parties,  whose  signatures  are  genuine.^ 

1  Allen  V.  Sharpe,  37  Tiul.  73;  2  Parsons'  N.  &  B.  597;  United  States 
V.  Nat.  Park  Bank,  6  Fed.  R.  852;  Lawrence  v.  Am.  Nat.  Bank,  54  N.  Y. 
435;  National  Bank  of  Commerce  v.  Nat.  M.  B.  Assn.,  55  N.  Y.  211; 
Fraker  v.  Little,  24  Kan.  599;  Young  v.  Lehman,  63  Ala.  523;  Welch  v. 
Goodwin,  123  Mass.  77. 

2  Cocks  V.  Masterman,  1  B.  &  C.  (17  Eng.  C.  L.  R.)  902. 

3  Allen  ?;.  Fourth  Nat.  Bank,  59  N.  Y.  12;  Third  Nat.  Bank?;.  Allen, 
59  Mo.  310;  Koontz  v.  Central  Nat.  Bank,  51  Mo.  275;  Canal  Bank  v. 
Bank  of  Albany,  1  Hill,  291;  Goddard  v.  Merchants'  Ba-nk,  4  Comst.  149; 
Ellis  V.  Ohio  Life  Ins.  Co.,  4  Ohio  St.  658. 

*  Weisser  v.  Dennison,  10  N.  Y.  69;  Welsh  v.  German-American 
Bank,  73  N.  Y.  424;  Hardy  v.  Chesapeake  Bank,  51  Md.  562;  National 
Bank  v.  Tappan,  6  Kan.  465. 

5  Smith  V.  Mercer,  6  Taunt.  76;  Davies  v.  Watson,  2  Nev.  &  M.  709: 
Gloucester  Bank  v.  Salem  Bank,  17  Mass.  .33. 

6  Brewster  v.  Burnett,  125  Mass.  68;  First  Nat.  Bank  v.  Peck,  8  Kan. 
660;  Smith  v.  McNair,  19  Kan.  382. 

678 


CHAPTER    XXI. 

EXCHANGE  AND  RE -EXCHANGE,  AND  DAMAGES. 

Section  405.  Exchange  aud  re-exchange  explained. 

406.  Statutoi'y  damages  in  lieu  of  re-exchange. 

407.  Indorsers  liable  for  re-exchange  or  damages. 

408.  Is  acceptor  liable  for  re-exchange. 

409.  What  law  determines  liability  for  re-exchange. 

410.  Re-exchange  and  damages  upon  promissory  notes. 

411.  Effect  of  part  payment  on  claim  for  re-exchange. 

412.  Interest  —  what  rate  recoverable. 

§  405.  exchange  and  re-exchange  explained.  —  As  was 
explained  in  a  previous  paragraph  [§  3],  the  object  of  a 
bill  of  exchange  was  to  facilitate  the  transfer  of  money,  in 
the  settlement  of  commercial  transactions  between  differ- 
ent places,  without  the  transportation  of  the  money  itself . 
For  example,  a  New  Yorker,  in  debt  to  some  one  in  Liver- 
pool, will  pay  that  debt  by  a  bill  of  exchange  drawn  by  a 
New  York  creditor  on  his  Liverpool  debtor.  If  New  York 
owes  as  much  to  Liverpool  as  Liverpool  owes  to  New  York, 
there  will  be  equal  demand  for  exchange  on  both  places. 
But  if  there  are  more  liabilities  in  one  place  than  there  are 
in  the  other,  an  inequality  of  demand  arises,  which  results  in 
making  the  exchange  cheaper  in  one  place  aud  dearer  in  the 
other.  If  New  York  owes  more  to  Liverpool,  exchange  in 
New  York  on  Liverpool  will  be  at  a  premium,  while  ex- 
change in  Liverpool  on  New  York  will  be  at  a  discount. 
This  premium  or  discount  is  called  the  exchange  or  rate  of 
exchange.  Under  these  circumstances,  a  bill  of  exchange 
in  Liverpool  for  one  thousand  dollars  will  cost  in  New  York 
one  thousand  dollars  plus  the  premium.     If  the  Liverpool 

679 


§    40»J       EXCHANGE  AND  Ri:-EXCHAXGE;    DAMAGES.     [CH.  XXI.. 

drawee  should  refuse  payment,  when  the  bill  was  presented 
to  him,  the  drawer  and  indorsers  are  of  course  liable  on  the 
bill,  for  they  guarantee  payment  in  Liverpool.  But  if  the 
payee  or  holder  can  only  recover  of  the  drawer  in  New 
York  the  face  value  of  the  bill,  viz. :  one  thousand  dollars, 
he  will  lose  the  premium  which  he  or  his  indorse r  had  to 
pay  for  the  bill.  Inasmuch  as  the  drawer  guarantees  com- 
plete indemnity  against  loss  in  consequence  of  dishonor  of 
the  bill,  it  became  a  rule  of  the  law  merchant  that  the 
holder  may,  in  the  place  of  payment  of  the  original  bill, 
draw  a  bill  on  the  original  drawer  for  an  amount  of  money, 
which  will  be  worth,  in  the  original  drawer's  domicile,  the 
face  value  of  the  original  bill  in  its  place  of  payment.  Or, 
to  return  to  the  specific  example  given  above,  should  the 
Liverpool  drawee  refuse  to  honor  the  bill,  the  holder  is 
authorized  to  draw  on  the  New  York  drawer  for  one  thou- 
sand dollars  j^lus  the  ruling  premium  of  exchange.  This 
second  bill  is  called  a  bill  of  re-exchange. 

As  a  matter  of  fact,  this  bill  of  re-exchange  is  seldom 
drawn,  but  the  principle  of  re-exchange  is  recognized 
everywhere  in  the  commercial  world,  and  forms  the 
basis  for  the  claim  of  damages  for  the  dishonor  of  a 
bill.i 


1  "The  doctrine  of  re-exchange  is  founded  upon  equitable  principles. 
A  bill  is  drawn  in  this  country,  payable  in  Paris,  France.  The  payee 
gives  a  premium  for  it,  under  the  expectation  of  receiving  the  amount 
at  the  time  and  place  where  the  bill  is  made  payable.  It  is  protested  for 
non-payment.  Now  the  payee  and  holder  is  entitled  to  the  amount  of 
the  bill  in  Paris.  The  same  sum  paid  in  this  country,  including  costs  of 
protest  and  other  charges,  is  not  an  indemnity.  The  holder  can  only  be 
remunerated  by  paying  to  him,  at  Paris,  the  principal,  with  costs  and 
charges;  or  by  paying  to  him  in  this  country  those  sums,  together  with 
the  difference  in  value  between  the  whole  sum  at  Paris  and  the  same 
amount  in  this  country.  And  this  difference  in  value  is  ascertained  by 
the  premium  on  a  bill  drawn  in  Paris,  and  payable  in  this  country,  which 
should  sell  at  Paris  for  the  sura  claimed."  Bank  of  the  tTnited  States 
V.  United  States,  2  How.  737. 
680 


CH.  XXI.]    EXCHANGE  AND  RE-EXCHANGE  ;    DAMAGES.       §    407 

§  406.   Statutory  damages  in  lieu  of  re-exchange. —  la 

almost  all  parts  of  the  civilized  world,  however,  the  claim 
for  re-exchange,  the  rate  of  which  has  to  be  computed  on 
each  bill,  and  which  would  vary  with  the  fluctuations  of  the 
money  market,  —  is  now  superseded  by  statutory  provis- 
ions for  the  recovery  of  liquidated  damages.  The  matter 
being  now  regulated  minutely  by  statute,  the  whole  doc- 
trine of  re-exchange  has  ceased  to  be  of  any  practical 
importance,  except  for  the  purpose  of  explaining  the 
fundamental  principle,  underlying  the  claim  for  the  statu- 
tory damat^es.  Nothing  could  be  desired  in  this  matter  in 
the  way  of  its  simplification,  if  there  was  a  national  statute 
governing  all  such  cases  arising  within  the  United  States. 
As  it  is  now,  each  of  the  forty-two  States  of  the  Union 
has  its  own  statute  on  the  subject,  and  each  statute 
differs  in  its  provisions.  For  this  reason,  also,  it  would 
be  diflScult,  if  at  all  possible,  to  give  any  concise  state- 
ment of  the  provisions  in  an  elementary  work  like  the 
present. 

§  407.  ludorsers  liable  to  re-exchange  or  damages.  — 

Indorsers  are  themselves,  in  every  essential  respect,  draw- 
ers of  a  bill  of  exchange ;  so  that  if  the  indorsed  bill  is 
dishonored  by  the  drawee  or  acceptor,  the  indorsers,  as 
well  as  the  drawer,  are  liable  to  re-exchange,  or  to  damages 
in  lieu  thereof.  And  if  the  holder  should  demand  re-ex- 
change of  his  immediate  indorser,  he  can  in  turn  recover 
of  the  next  indorser,  not  only  the  amount  paid  by  him  by 
way  of  exchange  between  the  place  of  dishonor  and  the 
place  of  the  last  indorsement;  but  also  the  re-exchange 
between  the  places  of  the  last  and  next  indorsement.  And 
each  successive  indorser  has  the  same  claim  against  the  party 
next  to  him,  until  the  drawer  is  reached,  who  will  be  com- 
pelled to  pay  all  the  sums  which  the  successive  indorsers  have 
had  to  pay  out  by   way  of   re-exchange.     Although  this 

681 


§    408       EXCHANGE  AND  RE-EXCHANGE;    DAMAGES.     [CH.  XXI. 

has  been  doubted,^  the  rule  may  be  considered  as  definitely 
settled  in  conformit}'  with  the  text.'^ 

§  408.  Is  acceptor  liable  to  re-exchange.  —  It  has  been 
held  that  the  acceptor  is  liable  to  vc-exchange,  as  well  as 
the  drawer  and  indorsers.^     But  the  better  opinion  is,  per- 

1  Story  on  Bills,  §  402,  quoting  Jousse  Coraras.  Sur.  L'Ord,  1673,  tit. 
C,  art.  4,  pp.  139,  140;  Forbes,  151;  Glen,  274. 

2  "  It  has  been  said  that  the  drawer  ought  not  to  be  liable  for  any  but 
the  direct  re-exchange  between  the  place  of  drawing  and  the  place  of 
payment,  unless  he  has  given  permission  to  negotiate  the  bill  in  other 
places.  But  such  a  permission  is  implied  by  the  drawer  issuing  a 
negotiable  document,  since  the  holder  for  the  time  is  entitled  to  indorse 
it  to  any  person  he  pleases;  and,  on  the  other  hand,  the  last  holder, 
being  entitled,  in  case  of  its  dishonor,  to  redraw  on  any  previous 
indorser,  in  order  to  make  good  his  recourse  against  such  indorser, 
who  again  has  a  right  to  do  the  same  with  any  prior  indorser,  the 
drawer,  as  he  is  liable  for  all  the  consequences  of  dishonor,  must  be 
liable  for  the  accumulated  re-exchauge  arising  on  the  successive  re- 
drafts, because  that  results  from  the  negotiability  of  the  document 
which  he  has  issued."  See  also  to  same  effect  D'Astet  v.  Baring,  11 
East,  205;  Mellish  v.  Simeon,  2  II.  Bl.  379;  Crawford  v.  Branch  Bank,  6 
Ala.  (X.  s.)  15. 

3  Francis  v.  Rucker,  Ambler,  672;  In  re  General  So.  Am.  Co.,  7  Ch. 
Div.  L.  R.  645;  Walker  v.  Hamilton,  1  D.  F.  &  J.  502;  Prehn  ?j.  Royal 
Bank  of  Liverpool,  L.  R.  6  Exch.  92;  Riggs  v.  Lindsay,  7  Cranch,  500, 
Livingston,  J.,  saying:  "  As  Lindsay  was  expressly  authorized  to  draw, 
he  certainly  had  a  right  to  do  so ;  and  whether  the  defendants  accepted 
his  bill  or  not,  so  as  to  render  themselves  liable  to  the  holders  of  them, 
there  can  be  uo  doubt,  that,  as  between  Lindsay  and  them,  it  was  their 
duty,  and  that  they  were  bound  in  law  to  pay  them.  Not  having  done  so, 
and  Lindsay,  in  consequence  of  their  neglect,  having  taken  them  up,  he 
must  be  considered  as  paying  their  debt,  and  as  this  was  not  a  voluntary 
act  on  his  part,  but  resulted  from  his  being  their  surety  (as  he  may  well 
be  considered  from  the  moment  he  drew  the  bills) ,  it  may  well  be  said 
that  in  paying  the  amount  of  these  bills,  which  ought  to  have  been  paid, 
and  was  agreed  to  be  paid  by  the  drawees,  he  paid  so  much  money  for 
their  use.  Nor  can  any  good  reason  be  assigned  for  distinguishing  the 
damages  from  the  principal  sum,  for  if  it  were  the  duty  of  the  defend- 
ants to  pay  such  principal  sum,  it  is  as  much  so  to  re-imburse  Lindsay 
for  the  damages,  which,  by  the  law  of  South  Carolina,  he  was  compelled 
to  pay,  and  which  may,  therefore,  also  be  considered  a  part  of  the  debt 
due  by  the  defendants  in  consequence  of  the  violation  of  their  promise." 

M82 


CH.  XXI.]    EXCHANGE  AND  RE-EXCHAXQE  ;    DAMAGES.       §    410 

haps,  that  the  acceptor  is  not  liable  for  re-exchauge,  prop- 
erly so-called,  although  he  would  be  liable  to  the  drawer 
for  all  the  damages  he  was  obliged  to  pay  on  account  of  the 
dishonor  of  the  bill,  if  he  was  under  any  legal  obligation 
to  honor  it.^ 

§  409.  What  law  determines  liability  for  re-exchange. — 

Although  the  drawer' s  guaranty  is  that  the  drawee  shall  pay 
the  bill  according  to  its  tenor  at  the  designated  place  of 
payment,  or  at  the  domicile  of  the  drawee  ;  yet,  if  the  bill 
be  dishonored,  his  liability  for  re-exchang.e  will  be  deter- 
mined, not  by  the  law  of  the  place  of  payment  or  of  the 
drawee's  domicile,  as  the  case  might  be,  but  by  the  law  of 
the  place,  where  the  bill  was  drawn.^  And  the  indorser's 
liability  is  determined  by  the  law  of  the  place,  where  he 
indorses.^  But  he  would  also  be  liable  for  whatever  re- 
exchange  any  subsequent  indorsee  had  been  obliged  to  pay.* 

§  410.  Re-exchange  and  damages  upon  promissory 
notes. — Promissory  notes  do  not,  according  to  the  law 
merchant,  come  within  the  rule  concerning  the  claim  for 
re-exchange.     But  where  the  note  expressly  provides  for 


^  Tramwell  v.  Hudmon,  56  Ala.  237;  Hanrick  v.  Farmers'  Bank,  8  Port. 
(Ala.)  539;  Newmau  v.  Gozo,  2  La.  Ann.  642;  Watt  v.  Riddle,  8  Watts, 
545;  Boweu  v.  Stoddard,  10  Met.  377,  Hubbard,  J.,  saying:  "  In  cases 
where  the  drawers  have  been  obliged  to  take  up  bills,  and  pay  damages, 
because  the  acceptors  suffered  them  to  be  protested  when  they  had  funds 
of  the  owners  in  their  hands,  and  were  as  between  themselves  and  the 
drawers  bound  to  accept,  they  may  recover  such  damages  of  the  accept- 
ors, because  the  loss  is  occasioned  by  their  default  and  neglect.  This 
rests,  however,  on  the  relations  existing  between  them,  and  not  on  the 
ground  that  the  acceptor  as  such  is  liable  to  pay  damages  by  reason  of 
his  acceptance."  See  also  Napier  tJ.  Schneider,  12  East,  420;  Woolsey 
V.  Crawford,  2  Camp.  445;  Dawson  v.  Morgan,  9  B.  &  C.  618. 

-  Allen  V.  Kemble,  6  Moore  P.  C.  314;  Gibbs  v.  Fremont,  9  Excli.  25; 
20  Eng.  L.  &  Eq.  555. 

3  Story  on  Bills,  §  153. 

*  2  Daniel's  Negot.  Inst.,  §  1452. 

683 


§411       EXCHANGE  AND  RE-EXCHANGE  ;    DAMAGES,     [CH.  XXI. 

payment  "  with  exchange,"^  and,  also,  after  the  note  has 
been  indorsed,  since  the  indorsement  of  a  promissory  note 
is  but  a  bill  of  exchange  on  the  maker ,^  the  rule  is  said  to 
apply  to  notes  as  well  as  to  bills. 

But  whether  this  be  technically  correct  or  not,  it  is  the 
rulinof  of  both  English  and  American  courts,  that  the  holder 
of  a  promissory  note  is  entitled  to  recover,  in  addition  to 
principal,  interest  and  costs  of  protest,  whatever  may  be 
necessary  to  replace  the  money  in  the  country  where  it 
ought  to  have  been  paid.^  But  the  correctness  of  this  rul- 
ing is  denied  by  respectable  authorities.*  Probably  every- 
where now  this  matter  is  dependent  upon  the  provisions  of 
the  statute,  which  governs  the  particular  case  under  in- 
quiry. 

§  411.  Effect  of  part  payment  on  claim  for  re-ex- 
change.—  It  has  been  held  in  a  number  of  cases  that  part 
payment  of  the  bill  and  a  protest  for  the  residue  will  reduce 
the  claim  for  re-exchange,  or  the  substitute  statutory 
damages,  proportionately.  In  other  words,  the  amount  of 
damages  recoverable  is  proportioned  to  the  loss  sustained 
by  the  dishonor.''     But  if  the  part  payment  occurs  subse- 

1  Pollard  V.  Ilerries,  3  ,Bos.  &  P.  335;  Grutacap  v.  Woulluise,  2 
McLean,  584. 

2  Howard  v.  Central  Bank,  3  Kelly,  375. 

3  Grant  v.  Healey,  3  Sumn.  523;  Lee  v.  Wilcocks,  5  Serg.  &  R.  48; 
Scott  V.  Bevan,  2  Barn.  &  Ad.  78;  Smith  v.  Shaw,  2  Wash.  C.  C.  167; 
Bank  of  Missouri  v.  Wright,  10  Mo.  719;  Cash  v.  Reunion,  11  Ves.  314. 
In  Lee  v.  Wilcocks,  supra,  the  payment  was  to  be  in  Turkish  piastres, 
and  It  was  held  to  be  the  settled  rule  "  where  money  is  the  object  of  the 
suit,  to  fix  the  value  according  to  the  rate  of  exchange  at  the  time  of  the 
trial." 

^  Adams  v.  Cordis,  8  Pick.  260;  Lodge  v.  Spooner,  8  Gray,  166;  Mar- 
tina. Franklin,  4  Johns.  124;  Day  v.  Scofield,  20  .Johns.  102. 

e  Laing  v.  Barclay,  3  Stark.  38;  Chitty  on  Bills  [*687],  768;  Bangor 
Bank  v.  Hook,  5  Greenl.  174;  Warner  r.  Combs,  20  Me.  139;  Story  on 
Bills,  §  399. 
684 


CH.  XXI.]    EXCHANGE  AND  RE-EXCHAXGE  ;    DAMAGES.        §    412 

quent  to  a  protest  for  nou-ptwmcnt  of  the  whole  1)ill,  it 
will  not  cut  down  the  claim  for  damaofes.^ 


§412.  Interest — What  rate  x'ecoveral>le.  —  Where  the 
law  prescribes  a  certain  rate  of  interest  to  be  recovered  in 
the  absence  of  an  express  contract  for  another  rate,  and 
permits  the  recovery  of  a  higher  rate  of  interest,  it  is 
always  a  doubtful  question  whether  the  contract  for  a  dif- 
ferent rate  of  interest  determines  the  .rate  of  in^terest  to  be 
claimed  of  the  debtor  after  as  well  as  before  maturity,  or 
whether  the  legal  rate  should  then  prevail.  Although  there 
are  many  cases  which  hold  that  only  the  legal  rate  can  in 
any  case  be  recovered  after  maturity ,2  the  better  opinion  is 
that  the  conventional  rate  is  recovered  after  as  well  as  be- 
fore maturity.^  In  the  United  States  Supreme  Court  the 
minority  rule  is  followed  in  all  cases  where  the  judgment  is 
not  controlled  by  local  law  ;  ^  but  when  a  case  comes  up 
from  one  of  the  States,  the  question  is  considered  a  matter 


1  Hargous  v.  Lahens,  o  Sau.  21,  Sauford,  J.,  sayiug:  "The  liability 
for  damages  becomes  perfect  ou  the  return  of  tlie  protested  bill.  A  sub- 
sequent part  payment  by  the  acceptor  can  have  no  greater  influence  than 
in  a  similar  part  payment  by  the  drawer  or  any  other  party.  It  is  as 
lixed  and  determinate  an  obligation  as  the  debt  represented  by  tlie  sum 
expressed  in  the  bill  itself." 

2  Duran  V.  Ayer,  67  Me.  115;  Eaton  v.  Boissonault,  67  Me.  5iO;  Mc- 
Comber  v.  Dunham,  8  Wend.  550;  Henry  v  Thompson,  Minor,  209; 
Perry  v.  Taylor,  1  Utah,  63;  Ludwick  v.  Hutsinger,  5  Watts  &  Serg.  5i  ; 
NeAvton  v.  Kennerly,  31  Ark.  626. 

3  Seymour  V.  Continental  Life  Ins.  Co.,  44  Conn.  300;  Pridgeu  v.  An- 
drews, 7  Tex.  461;  Hopkins  v.  Crittenden,  10  Tex.  189;  Hand  v.  Arm- 
strong, 18  Iowa,  324;  Thompson  v.  Pickel,  20  Iowa,  490;  Briscoe  v. 
Kenealy,  8  Mo.  App.  77;  Kohler  v.  Smith,  2  Cal.  597;  Foulay  v.  Hall, 
12  Ohio,  615;  Morgan  v.  Jones,  20  Eng.  L.  &  Eq.  454;  Cecil  v.  Hicks,  29 
Gratt,  1;  Overton  v.  Balton,  9  Heisk.  7G2;  Phiuney  v.  Baldwin,  16  111. 
108;  Coxr.  Smith,  1  Nev;  171;  Pruyne  v.  Milwaukee,  18  Wis.  568.  See 
Cromwell  v.  County  of  Sac,  96  U.  S.  61;  Payne  v.  Caswell,  68  Me.  .SO; 
Andrew  v.  Keeler,  19  Hun,  87. 

•*  Holdeu  y.  Trust  Co.,  100  U.  S.  72. 

685 


§    412       EXCHANtH:  AM)  ];K-KXCirAXGE  ;    DA.MAtiKS.     [CH.    XXI. 

of  local  law,  and  the  court  follows  the  decisions  of  the 
State  from  which  the  case  comes. ^ 

Of  course  such  a  question  cannot  be  raised  where  the  con- 
tract expressly  provides  for  the  recovery  of  the  con- 
tractual rate  after  maturity.^  And  it  is  even  permissible 
for  the  parties,  by  exi)ress  agreement,  to  provide  for  a 
higher  rate  of  interest  after  maturity,  as  liquidated  dam- 
ages for  the  dishonor.^ 

1  Ohio  V.  Frank,  103  U.  S.  698;  Cromwell  v.  County  of  Sac,  96  U.  S. 
61,  explaining  Brewster  v.  Wakefield,  22  How.  118. 

-  Eaton  V.  Boissonault,  67  Me.  540;  Cecil  v.  Hicks,  29  Gratt.  1. 
3  Bane  v.  Griclley,  67  111.  388. 
68G 


CHAPTER     XXTL 


1/ 


THE    RIGHTS    AND  LIABILITIES    OF   SURETIES  AND  GUAR- 
ANTORS. 

Section  415.  Suretyship  aud  guaranty  distinguished. 

416.  Forms  and  kinds  of  guaranties. 

417.  The  consideration  of  guaranties. 

418.  How  affected  by  the  statute  of  frauds. 

419.  Negotiability  of  guaranties. 

420.  Notice  of  acceptance  of  guaranty. 

421.  Necessity  for  demand  of  principal  aud  notice  of  default  to 

guarantor. 

422.  Concealed  sureties  as  accommodation  parties  —  Nature  of 

their  liability  —  Admissibility  of  parol  evidence  to  prove 
real  character. 

423.  Wliat  acts  will  discharge  guarantors  and  sureties. 

424.  Continued  —  Surrender  of  securities  and  extension  of  time 

of  payment. 

425.  Presumption  of  indulgence,  arising  from  receipt  of  secu- 

rities. 

426.  The  remedies  of  the  surety  —  Contribution. 

§  415.  Suretyship  and  guaranty  distinguished,  — Both 
the  surety  and  the  guarantor  promise  to  answer  for  the 
debt  or  default  of  another ;  or,  to  be  perhaps  more  accu- 
rate, both  in  the  case  of  the  default  of  another  are  obliged 
to  pay  the  debt  or  render  the  service.  Surety  may  be 
called  a  species  of  guaranty ,  if  the  subject  is  considered  gen- 
erally; and  guaranty  may  be  considered  as  a  species  of 
surety,  if  one  considers  alone  the  bearing  of  the  subject  on 
commercial  paper.  The  surety  is  a  guarantor  of  the  pay- 
ment of  the  face  value  of  the  note,  who  assumes  this  lia- 
bility by  becoming  a  regular  party  to  the  paper,  as  drawer 
or  indorser,  but  usually  as  co-maker  of  a  promissory  note. 
Where  the  surety  is  co-maker,  the  obligation  to  pay  becomes 

637 


§    415  THE    KIGHTS    AM)    LIABILITIES  [CH.  XXII. 

his  own  immediately  upon  failure  of  the  principal  to  pay, 
without  any  previous  demand  on  the  principal  or  notice  of 
his  default.^  But  where  he  signs  as  accommodation  drawer 
or  indorser,  he  assumes  the  peculiar  contingent  liability  of 
these  parties  which  depends  upon  the  previous  presentment 
of  the  palmer  to  the  primary  obligor  for  payment,  and  the 
giving  of  notice  of  dishonor.  But,  with  a  proper  recogni- 
tion of  that  point  of  distinction,  it  may  be  useful,  in  dis- 
cussing what  acts  will  discharge  a  surety  or  guarantor,  to 
state,  in  conformity  with  numerous  decisions,  that  the 
drawer  of  a  bill  of  exchange  and  the  indorsers  of  bills  and 
notes  are  sureties  of  the  acceptor  or  maker  to  the  holder. - 
And  one  indorser  may  be  said  to  be  surety  for  all  prior  par- 
ties to  a  subsequent  indorser.^ 

The  guarantor  is  never  a  regular  party  to  the  commercial 
instrument,  and  his  liability  depends  upon  an  independent, 
collateral  agreement,  which  provides  for  the  payment  of  the 
debt  by  the  guarantor  in  case  the  primary  debtor  fails  to 
pay.  The  liability  of  the  indorser  is  somewhat  similar,  but 
differs  in  this,  that  the  indorser  is  discharged  from  liability, 
if  there  has  not  been  due  presentment  and  notice.*     The 

1  2  Parsons'  N.  &  B.  118;  Perry  t>.  Barrett,  18  Mo.  140.  Such  a  surety 
is  said  to  be  "  an  insurer  of  the  debt;  the  guarantor  is  the  insurer  of  the 
solvency  of  the  debtor."  Crampt's  Exrx.  v.  Ilatz'  Exrs.,  52  Pa.  St.  525; 
Reigart  v.  White,  52  Pa.  St.  438 ;  Arents  v.  Commonwealth,  18  Gratt.  770. 

2  Wallace  v.  McConnell,  13  Pet.  136;  English  v.  Darley,  2  Bos.  &  P. 
CI ;  Clark  v.  Devlin,  3  Bos.  &  P.  363;  Blair  v.  Bank  of  Tenn.,  11  Humph. 
.si;  Gould  V.  Robson,  8  East,  57G;  Bank  of  U.  S.  v.  Hatch,  6  Pet.  250; 
LobdeU  ?;.  Niphler,  4  La.  295;  Hefford  v.  Morton,  11  La.  117;  Wood  v. 
.Tcffjrson  Co.  Bank,  9  Cow.  194;  Hubblyt;.  Brown,  16  Johns.  70;  Veazie 
r.  Cavr,  3  Allen,  14;  Burrill  v.  Smith,  7  Pick.  291;  Priest  v.  Watson,  7 
Mo.  App.  578;  Millandon  v.  Arnous,  15  Mart.  59(>.  But  see  Trimble  v. 
Thorn,  16  Johns.  152;  Beardsley  v.  Warner,  6  Wend.  613,  where  it  is 
held  that  the  indorser  cannot  be  considered  a  surety  so  far  as  to  enable 
him  to  take  advantage  of  a  statutory  provision,  giving  to  sureties  the 
right  to  call  upon  the  creditor  to  prosecute  the  principal. 

3  Newcomb».  Ravnor,  21  Wend.  108. 

<  See  chapters  on  rresentment,  Protest  and  Notice  of  Dishonor. 
(588 


CH.   XXII.]  OF    SURETIES    AND    GUARANTORS.  §    416 

guarantor  is  bound  to  pay  if  he  receives  notice  of  the  prin- 
cipal's default  within  a  reasonable  time  after  maturity,  and 
his  liability  is  not  affected  by  the  failure  to  make  present- 
ment and  i^rotest  exactly  on  the  day  of  maturity,  unless  he 
can  show  that  he  has  been  damaged  by  the  delay .^ 

It  is  held  that  the  same  person  may  be  both  guarantor 
and  indorser,  so  that  he  may  still  be  liable  as  a  guarantor, 
although  he  has  been  discharged  of  his  liability  as  an 
indorser .2  And  where  one  writes  his  name  on  the  back  of 
a  negotiable  instrument,  without  being  payee  or  indorsee, 
and  without  indicating  on  the  paper  the  character  in  which 
he  signed,  it  is  exceedingly  difficult  to  say,  in  the  light  of 
the  authorities,  what  is  the  nature  of  his  liability.  This 
subject  has  been  fully  discussed,  and  the  authorities  cited 
elsewhere  ;^  and  it  will  not  be  necessary  to  make  any  further 
reference  to  it  in  this  connection. 

§  416.  Forms  and  kinds  of  guaranties. —  The  guaranty 
is  not  required  to  assume  any  particular  form.  It  may  be 
a  separate  instrument ;  or  it  may  be  written  on  or  across 
the  commercial  paper,  whose  payment  is  guaranteed.  The 
guaranty  may,  as  to  the  liability  to  pay,  be  absolute,  or 
conditional  upon  the  happening  of  some  other  contingency 
than  the  default  of  the  principal  debtor.*  It  may  also  be 
limited  or  unlimited  in  respect  to  the  amount  as  well  as  to 
time,  and  the  number  of  the  transactiohs.  And  it  depends, 
altogether,  upon  the  language  of  the  guaranty  which  con- 

1  Axents  v.  Commonwealth,  18  Gratt.  770;  Camden  v.  Doremus,  3 
How.  515;  Jones  v.  Ashford,  79  N.  C.  176;  Dickerson  v.  Derrickson,  39 
111.  577;  Montgomery  v.  Kellogg,  43  Miss.  486;  Clay  v.  Edgerton,  19 
Ohio  St.  553.     But  see  posi,  §  421, 

2  Deck  V.  Works,  57  N.  Y.  Pr.  292. 

3  See  ante,  chapter  on  Transfer  by  Indorsement. 

*  Dickerson  v.  Derrickson,  39  111.  575;  Cumpston  r.  McNair,  1  Wend. 
457;  Curtis  v.  Sraallman,  14  Wend.  231;  Loveland  v.  Shepherd,  2  Hill, 
139;  Moakley  v.  Riggs,  19  Johns.  69. 

689 


§     417  TlIK    niGIITS    AND    LIABILITIES  [CH.   XXII. 

struotion  will  prevail.  la  reference  to  the  giuirunty  of 
commercial  paper,  these  questions  do  not  cause  the  same 
difficulty,  as  they  do  in  application  to  guaranties  in  general. 
The  only  point,  at  which  any  difficulty  may  be  experienced, 
is  to  determine  when  a.  guaranty  authorizes  the  loan  of 
"  any  sum  "  within  a  certain  figure,  whether  it  was  a  con- 
tinuing guaranty,  or  whether  it  is  exhausted  by  the  first 
loan.  It  is  held  to  be  exhausted  where,  in  speaking  of-the 
loan,  the  language  used  is  singular  in  number. ^  But  where 
language  was  used  in  the  plural,  and  indicated  the  author- 
ity for  repeated  loans  within  the  limit  as  to  amount,  it 
would  be  held  to  cover  any  loan  or  loans  while  keeping 
within  the  stipulated  amount.^ 

§  417.  The  consideration  of  guaranties. — When  the 
guaranty  is  contemporaneous  with  the  creation  of  the 
original  liability,  the  same  consideration  will  support  the 
guaranty  which  supports  the  principal  contract.  In  such  a 
case  the  credit  is  given  to  both,  and  not  to  one  alone, 
although  only  one  may  derive  any  substantial  benefit  from 
the  transaction.^     But  where  the  guaranty  is  given  after 

1  Cremer  v.  Higgiuson,  1  Mason,  323  ("  the  object  of  the  present 
letter  is  to  request  you,  if  couveuieut,  to  furnish  them  (S.  &  H.  H.) 
with  any  sum  they  may  loant,  as  far  as  flfty  thousand  dollars  ").  See  also 
Ranger  v.  Sargent,  36  Tex.  26. 

2  Sansome  v.  Bell,  2  Calnp.  39  C"  to  the  amouut  of  £10,000,  on  certain 
acceptances,  or  any  other  account  thereafter  to  subsist  between  A.  & 
B.");  Merle  v.  Wells,  2  Camp.  413  ("any  debt  A.  B.  may  contract  in 
his  business  as  jeweller,  not  exceeding,"  etc.)  ;  Mayer  v.  Isaacs,  6  M.  & 
W.  605  ("  any  bills  you  may  draw  on  hira  on  account,  etc.,  to  the 
amount,"  etc.);  Douglass  v.  Reynolds,  7  Pet.  113  (the  bearer  "might 
require  your  aid  from  time  to  time  "  and  the  guarantor  promises  "  to  be 
responsible  at  any  time  for  a  sum,"  etc.)  See  also  to  same  effect  Mason 
V.  Pritchard,  2  Camp.  436;  Barton  v.  Bennett,  3  Camp.  220;  Gates  v. 
McKee,  3  Keen.  237. 

3  Draper  v.  Snow,  20  N.  Y.  331;  Bickford  v.  Gibbs,  8  Cush.  184; 
Snively  v.  Johnson,  1  Watts  &  S.  309:  Campbell  r.  Knapp,  15  Pa.  St.  27; 
Gillighan  r.  Boardraan,  29  Me.  79;  Colburu  v.  Arerill,  30  Me.  310;  Park- 

690 


CH.  XXII.]  OF    SURETIES    AXD    GUARANTORS.  §    418 

the  principal  contract  is  made,  the  guaranty  must  be  sup- 
ported by  a  new  and  independent  consideration,^  unless  it 
was  given  subsequently,  in  pursuance  of  a  contempora- 
neous agreement  to  that  effect. ^ 

§  418.   How  affected  by  the  statute  of  frauds. — One 

of  the  provisions  of  the  statute  of  frauds  is  that  "  no 
action  shall  be  brought  whereby  to  charge  the  defendant 
upon  any  special  promise  to  answer  for  the  debt,  default 
or  miscarriages  of  another  person,  unless  the  agreement 
upon  which  such  action  shall  be  in  writing,"  etc.  The 
general  conclusion  from  this  provision  is  that  a  guaranty, 
which  is  a  promise  to  answer  for  the  debt  of  another,  must 
be  in  writing  and  signed  by  the  party  to  be  charged  there- 
with. But  there  are  several  minor  questions  which  in  this 
connection  require  explanation:  hi  the  first  place^  is  it 
necessary  for  the  guaranty  to  contain  an  acknowledgment 
and  statement  of  the  consideration?  On  the  ground  that 
the  consideration  is  a  part  of  the  agreement"  it  has  been 
held  that  it  should  be  expressed  in  the  writing,  in  order  to 
satisfy  the  requirement  of  the  statute.^  But  the  word 
"agreement"  is  held  by  other  authorities  to  mean  the 
thing  agreed  upon,  and  not  to  include  every  term  or  pro- 
hurst  r.  Vail,  73  III.  323;  Maurow  v.  Durham,  8  Hill,  584;  Leggett  v. 
Eaymoud,  6  Hill,  639;  Hopkins  v.  Richardson,  !)  Gratt.  494. 

1  Tenney  v.  Prince,  4  Pick.  385;  Howe  v.  Merrill,  5  Cush.  80;  Klein  v. 
Currier,  14  HI.  237;  Parkhurst  v.  Vail,  73  111.  323.  See  Green  v.  Shep- 
herd, 5  Allen,  570;  Williams  v.  Williams,  67  Mo.  667;  Ewing  v.  Clarke, 
8  Mo.  App.  570. 

2  Hawkes  v.  Phillips,  7  Gray,  284;  Moles  v.  Bird,  II  Mass.  436. 

s  Wain  V.  Walters,  5  East,  10;  Henderson  v.  Johnson,  6  Ga. — ;  Rigbyu. 
Norwood,  34  Ala.  129;  Sears  v.  Brink,  3  Johns.  210;  Jenkins  v.  Reynolds, 
3  Brod.  &  Bing.  14;  Newbury  v.  Armstrong,  6  Biug.  201;  Leonard  ?7. 
Vredenburg,  8  Johns.  29;  Saunders  v.  Wakefield,  4  Barn.  &  Aid.  595; 
Orderaan,  Lawson,  49  Md.  135;  Morley  v.  Boothby,  3  Bing.  107;  Elliott  v. 
Giese,  7  Harris  &  J.  457;  Alnutt  v.  Asherdeu,  5  Man.  &  G.  392;  Simmons 
r.  Steele,  36  N.  H.  73;  Nichols  v.  Allen,  23  Minn.  543;  Parry  v.  Spkes, 
49  Wis.  385. 

691 


§    418  THE    KIGHTS    AND    LIABILITIES  [CH.  XXII. 

vision  of  the  coiitract.  Hence,  these  cases  bold  tluit  it  is 
not  necessary  to  express  the  consideration  in  the  writing.^ 
But  even  when  it  is  held  that  the  consideration  must  appear 
in  the  writing,  it  is  never  held  that  it  must  be  stated  at  lenirtli, 
with  a  full  explanation  of  particulars.  The  rule  is  satisHed, 
if  the  consideration  appears  in  the  writing  by  reasonable 
intendment. 2 

In  New  York,  it  was  formerly  held  to  be  unnecessary  to 
state  the  consideration  in  the  written  guaranty  ;^  but  sub- 
sequently, the  statute  was  amended  in  that  State,  so  as  to 
require  the  consideration  to  be  expressed  in  writing,  and  it 
is  now  accordingly  required  to  be  in  writing;  whether  the 
guaranty,  being  contemporaneous,  is  based  upon  the  same 
consideration,  or,  being  subsequent,  it  is  supported  by  an 
independent  consideration.* 

Where  the  statute  only  requires  the  "  promise  "  to  be  in 
writing,  the  consideration  need  not  be  expressed.^ 

In  the  second  ylace^  in  those  States  where  the  considera- 
tion is  not  required  to  be  expressed,  it  is  held  that  the  mere 

1  Packard  v.  Richardson,  17  Mass.  22;  Gilligliau  v.  Boardman,  29  Me. 
79;  Reed  v.  Evaus,  17  Ohio,  128;  Ashford  v.  Robinson,  8  Ired.  lU; 
Little  V.  Nabb,  10  Mo.  3;  Smith  v.  Ide,  3  Vt.  390;  Sage  v.  Wilcox,  (J 
Conn.  81;  Buckley  v.  Beardsley,  2  South.  570;  Wren  y.  Pierce,  4  Sra.  & 
M.  91. 

2  Russell  y.  Moseley,  3  B.  &  B.  210  ("I  hereby  guarantee  the  present 
account  of  Miss  H.  M.  due  to  B.  &  Co.,  of  £112,  4,  4,  and  what  she  may 
contract  from  this  date  to  80th  of  September,  next");  Shortrede  i'. 
Cheek,  1  Ad.  &  El.  57;  Emmatt  v.  Kearns,  5  Bing.  N.  C.  559;  Haigh  v. 
Brooks,  10  Ad.  &  El   309. 

3  Leonard  v.  Vredeuburgh,  8  .Johns.  29 ;  Barley  v.  Freeman,  1 1  Johns. 
221;  Nelson  w.  Dubois,  13  Jolius.  175. 

■»  Brewster  v.  Silence,  11  Barb.  144;  4  Seld.  207;  Glen  Cove  Mut.  Ins. 
Co.  V.  Harrold,  20  Barb.  298;  Draper  v.  Snow,  20  N.  Y.  331.  But  the 
consideration  need  not  be  minutely  or  specifically  defined;  the  words 
"value  received"  being  held  a  sufficient  compliance  with  the  statute. 
Brewster  v.  Silence,  supra;  Douglass  v.  Howland,  24  Wend.  35;  Watson 
V.  McLaren,  26  Wend.  425. 

5  Violett  V.  Patten,  5  Cranch,  142;  Taylor  v.  Ross,  3  Yerg.  330;  Colgin 
V.  Henley,  6  Leigh,  8.5;   Pearce  v.  Wren,  4  Sm.  &  M.  91. 
692 


CH.  XXII.]  OF    SURETIES    AND    GUARANTORS.  §    419 

signature  of  the  guarantor  on  some  part  of  the  principal 
obligation  is  a  sufficient  compliance  with  the  statute  of 
frauds,  as,  for  example,  where  one  not  a  payee  or  indorsee 
writes  his  name  on  the  back  of  commercial  paper. ^ 

Finally^  in  order  that  the  requirement  of  the  statute 
should  apply,  the  agreement  must  in  fact,  as  well  as  in 
form,  be  a  promise  to  answer  for  the  debt  of  another.  If 
the  transaction  be  nothing  more  than  an  indirect  way  of 
guaranteeing  the  payment  of  one's  debt,  it  need  not  be  re- 
duced to  writing.  Thus,  if  one,  in  paying  his  own  debt, 
transfers  to  his  creditor  the  note  of  another  which  is  pay- 
able to  himself,  with  a  guaranty  that  this  third  person's  note 
will  be  paid,  the  .guaranty  is  substantially  that  the  guaran- 
tor's original  debt  will  be  paid  by  the  collection  of  this 
third  person's  note;  and,  for  this  reason,  the  guaranty  need 
not  be  in  writing. ^ 

§  419.  Negotiability  of  guaranties.  —  In  determining 
whether  the  guaranty  of  a  commercial  instrument  is  so  far 
negotiable  as  to  enable  any  subsequent  indorsee  or  holder 
to  sue  on  it,  we  find  a  contrariety  of  opinion  on  all  points, 
except  one.  Jt  is  very  generally  agreed  that  where  the  guar- 
anty is  written  on  a  separate  paper,  it  will  not  be  negotiable, 
so  far  as  to  pass  as  appurtenant  of  the  bill  or  note  to  asub- 

1  Perkins  17.  Catlin,  11  Coun.  213;  Moies  u.  Bird,  11  Mass.  436;  Nelson  v. 
Dubois,  13  Johns.  175.  But  tliis  doctrine  is  not  universally  accepted, 
many  cases  holding  that  in  every  case  of  guaranty  there  must  be  some- 
thing more  in  wanting  than  the  signature  of  the  party  to  be  charged. 
See  ante^  §270  271,  in  the  chapter  on  Transfer  by  ludorsement. 

2  Brown  v.  Curtis,  2  N.  Y.  225.  See  to  same  effect  Cardell  v.  Mc- 
Niell,  21N.  Y.33U;Beatyv.  Grim,  18Ind.  131;  Dyerv.  Gilson,  16  Wis.  557; 
Thurston  v.  Island,  6  E.  I.  103;  Hall  v.  Rodgers,  7  Humph.  536;  John- 
son V.  Gilbert,  4  Hill,  178;  Sheldon  v.  Butler,  24  Minn.  513;  Fowler  v. 
Clearwater,  35  Barb.  143;  Dauber  v.  Blackney,  38  Barb.  432;  Meech  w. 
Smith,  7  Wend.  315;  Milks  w.  Rich,  80  N.  Y.  269;  Hunt  v.  Adams,  5 
Mass.  358;  Malone  v.  Keener,  44  Pa.  St.  107;  Huntington  v.  Wellington, 
12  Mich.  10;  Hopkins  u.  Richardson,  'J  Gratt.  485;  Rowland  v.  Rorke,  4 
Jones  (.N.  C),  337. 

693 


§    41i>  THE    RIGHTS    AND    LIABILITIES  [CH.   XXII. 

sequent  holder,  unless  the  words  of  negotiability  are  incor- 
porated in  the  guaranty.^ 

When  the  guaranty  is  written  upon  the  negotiable  instru- 
ment contemporaneously  with  its  execution,  the  authorities 
are  divided,  some  holding  it  to  be  negotiable,'^  and  others 
claiming  that  it  is  not  negotiable.^  So,  also,  where  the 
guaranty  is  written  on  the  paper  by  a  transferrer  in  the  act 
of  transferring  it,  some  of  the  authorities  hold  the  gruar- 
anty  to  be  negotiable,*  and  others  that  it  is  not.^ 


^  McLaren  v.  Watson's  Exrs.,  10  Wend.  559;  s.c.  26  Wend.  41)5:  2 
Am.  Lead.  Cas.  314;  Story  on  Notes,  §  484.  But  see,  dissenting  opinion 
of  Verplanck,  Senator,  in  McLaren  v.  Watson's 'Exrs.,  supra. 

2  Cooper  y.  Dedrick,  22  Barb.  516;  McLaren  v.  Watson's  Exrs.  2G  Wend. 
430;  Webster  v.  Cobb,  17  111.  466;  Cole  v.  Merchant's  Bank,  60  Ind.  3.50; 
Story  on  Bills,  §  458:  •'  With  a  view  to  the  convenience  and  security  of 
merchants,  as  "well  as  the  free  circulation  and  credit  of  negotiable  paper, 
it  would  seem  that  such  a  guaranty  upon  the  face  of  a  bill  of  exchange, 
not  limited  to  any  particular  person.,  but  purporting  to  be  general,  with- 
out naming  any  person,  whatsoever,  or  purporting  to  be  a  guaranty  to 
the  payee  or  his  order,  or  to  the  bearer,  ouglit  to  be  held,  upon  the"  very 
Intention  of  the  parties,  to  be  a  complete  guaranty  to  every  successive 
person  who  shall  become  the  holder  of  the  bill." 

3  True  V.  Fuller,  21  Pick.  140;  Tinkers.  McCauley,  3  Mich.  188,  over- 
ruling Higgins  V.  Watson,  1  Mich.  420;  Small  v.  Sloan,  1  Bosw.  353; 
Northumberland  Co.  Bank  v.  Eger,  58  Pa.  St.  97.  Prof.  Parsons  (2  N.  .i 
B.  133,  134)  says:  "The  negotiability  of  paper  payable  to  order  is  es- 
tablished by  a  very  peculiar  exception  to  the  general  law  of  contracts ; 
and  this  exception  rests  upon  a  usage  so  ancient  and  universal  as  to 
show  a  distinct  and  urgent  need  of  it.  But  the  negotiability  of  a  guar- 
antor has  no  such  usage  in  its  favor,  and  is  not,  therefore,  within  the 
exception.  Moreover,  we  do  not  think  it  likely  to  be  brought  within  this 
usage,  or  on  other  grounds  established  by  adjudication,  because  all  ex- 
ce-ptious  are  to  be  limited  by  the  necessity  for  them ;  and  we  see  no  neces- 
sity for  any  such  rule,  inasmuch  as  all  the  good  which  could  be  gained  from 
making  guaranties  negotiable  may  be  derived,  and  is  in  part  derived, 
from  the  practice  and  the  law  of  indorsement." 

*  Gage  V.  Mechanics'  Bank,  79  111.  62;  Partridge  v.  Davis,  20  Vt.  500; 
Heard  v.  Dubuque  Co.  Bank,  8  Neb.  16;  Robinson  v.  Lain,  31  Iowa,  0. 
See  Deck  v.  Works,  57  N.  Y.  Pr.  292;  Johnson  v.  Mitchell,  50  Tex.  212; 
Heaton  v.  Hulbert,  3  Scam.  489. 

*  Trust  Co.  V.  National  Bank,  101  U.  S.  70;  Snevily  v.  Ekel,  1  Watts 

694 


CH,  XXII.]  OF    SURETIES    AND    GUARANTORS.  §    420 

It  is  to  be  observed,  however,  even  where  the  guaranty 
is  held  to  be  non-negotiable,  the  guarantee  may  expressly 
assign  the  right  of  action  ou  the  guaranty  to  the  transferee 
of  the  guaranteed  paper  ;  and  such  assignee  can  thereafter 
maintain  action  upon  the  guaranty  in  the  name  of  the 
assio;nor,  at  common  law,  and  in  his  own  name  under 
modern  rules  of  procedure.^ 

§  420.  Notice  of  acceptance  of  guaranty.  —  Like  every 
other  contract,  the  guaranty  is  not  complete,  until  there  has 
been  an  acceptance,  and  the  guarantor  has  been  notified  of 
the  acceptance.  If  the  negotiations  are  conducted  by  the 
principals  and  personally,  there  is  no  need  of  any  formal 
notification  of  acceptance,  since  the  acceptance  is  neces- 
sarily communicated  to  the  guarantor,  when  it  occurred.^ 
And  this  is  -also  true  where  the  guaranty  relates  to  only 
one  specific  liability.^  But  when  the  guaranty  relates  to  a 
future  continuing  credit,  the  rule  is  laid  down  as  follows: 
If  the  party  distinctly  and  absolutely  guarantees  a  certain 
line  of  credit,  it  presupposes  some  sort  of  a  proposition  for 
a  guaranty,  emanating  from  the  guarantee,  and  for  this 
reason,  no  formal  acceptance  by  the  guarantee  is  necessary; 
but  if  it  be  only  a  proposition  to  guarantee  the  credits,  and 
not  a  positive  promise  to  guarantee  them,  the  acceptance  of 
the  proposition   must  be   communicated,  before  the  guar- 

&  S.  203;  Miller  v.  Gaston,  2  Hill,  188;  Lamourieux  v.  Hewitt,  5  Wend. 
307;  Tuttle  v.  Bartholomew,  12  Met.  454;  Belcher  v.  Smith,  7  Cush.  482; 
Taylor  u.  Binney,  7  Mass.  481;  Nevins  v.  Bank  of  Lansiugburgh,  10  Mich. 
547;  Omaha  Nat;  Bank  v.  Walker,  5  Fed.  Rep.  399.  But  in  those  cases 
•  where  the  guaranty  itself  is  held  to  be  not  transferable,  the  writing  is 
nevertheless  held  to  operate  as  a  transfer  of  the  negotiable  instrument. 
Myrick  v.  Hasey^  27  Me.  12;  Upham  v.  Prince,  12  Mass.  15. 

1  Arents  v.  Commonwealth,  18  Gratt.  770;  Story  on  Bills,  §  457. 

2  Lent  V.  Padelford,  10  Mass.  230;  Walker  v.  Forbes,  25  Ala.  139; 
Wildes  V.  Savage,  1  Story,  22. 

3  Montgomery  v.  Kellogg,  43  Miss.  48G ;  Thrasher  v.  Ely,  2  Sm.  &  M. 
147, 

G95 


§    421  TH?:    RIGHTS    AND    LIABILITIES  [CH.  XXII. 

antor  can  be  held  liable  on  it.^  A  notice  of  acceptance  is 
always  necessary,  where  the  guaranty  takes  the  form  of  a 
general  letter  of  credit,  addressed  to  whom  it  may  concern, 
so  as  to  enable  the  guarantor  to  know  who  has  become  the 
guarantee. - 

The  guarantor  may,  in  the  guaranty,  waive  notice  of 
acceptance,  and  in  that  case  notice  may  be  dispensed  with.'^ 

§  421.  Necessity  for  demand  of  principal  and  notice  of 
default  to  guarantor. — The  authorities  are  agreed  that, 
where  the  liability  of  the  guarantor  depends  upon  a  con- 
tingency, it  is  necessary  that  notice  of  default  should  bo 
given  to  the  guarantor  within  a  reasonable  time  after  de- 
mand;  and  demand  should  be  made  of  the  principal  at  or 
very  soon  after  maturity.* 

But  where  the  guaranty  is  absolute,  the  authorities  are 

1  Jackson  v.  Yendes,  7  Blackf.  52G;  Sheurll  v.  Knox,  1  Dev.  404;  2  Am. 
Lead.  Cas.  104;  Davis  v.  Wells,  Fargo  &  Co.,  104  U.  S.  159;  s.  c.  2  Utah, 
411;  Norton  v.  Eastman,  4  Me.  521;  Tuckerman  v.  French,  7  Me.  115; 
Bradley  V.  Carey,  8  Me.  234;  Babcock  v.  Bryant,  12  Pick.  133;  Mussey  v. 
Rayner,  12  Pick.  223;  Lawson  v.  Towucs,  2  Ala.  373;  Walker  v.  Forbes, 
25  Ala.  139;  Taylor  v.  Wetmore,  10  Ohio,  490  (overruled  by  powers  v. 
Bumcranz,  12  Ohio  St.  284) ;  Kapelye  w.  Bailey,  3  Conn.  438;  Craft  «. 
Isham,  13  Conn.  28;  Kay  v.  Allen,  9  Barr.  320.  See  Montgomery  v.  Kel- 
logg, 43  Miss.  48G;  Kincheloe  v.  Holmes,  7  B.  Mon.  5;  Lowe  v.  Beck- 
■with,  14  B.  Mon.  184;  Hill  v.  Calvin,  4  How.  (Mii^s.)  231;  Rankin  v. 
Childs,  9  Mo.  674;  Central  Sav.  Bank  v.  Shine,  48  Mo.  461;  Oaks  v. 
Miller,  13  Vt.  106;  Lowry  v.  Adams,  22  Vt.  166  (overruling  Train  v. 
Jones,  11  Vt.  44).  But  see  contra  Douglass  v.  Hovrland,  24  Wend.  50; 
Powers  V.  Bumcranz,  12  Ohio  St.  284;  Smith  v.  Daun,  6  Hill,  543;  Catou 
V.  Shaw,  2  H.  &  Gill,  13;  Wilcox  v.  Draper,  12  Neb.  138. 

2  Russell  V.  Clarke,  7  Cranch,  69;  Edmundson  v.  Drake,  5  Pet.  624; 
Douglass  V.  Reynolds,  7  Pet.  113;  Adams  v.  Jones,  12  Pet.  207;  Lee  v. 
Dick,  10  Pet.  482;  Louisville  Man.  Co.  v.  Welch,  10  How.  461;  Widdes 
V.  Savage,  1  Story  C.  C.  22. 

3  Bickford  v.  Gibbs,  8  Cush.  154;  Worcester  Inst.,  etc.,  v.  Davis  13 
Gray,  531;  Wadsworth  v.  Allen,  8  Gratt.  174. 

*  Clay  V.  Edgerton,  19  Ohio  St.  553;  Dickerson  r.  Derricksou,  39  III. 
577;  Montgomery  v.  Kellogg,  43  Miss.  486. 
696 


CH.  XXII.]  OF    SURETIES    AND    GUARANTORS.  §    421 

divided,  some  holding  that  the  guarantor's  liability  becomes 
absolute  at  maturity,  without  any  demand  on  the  principal 
or  notice  of  default  to  himself ;  ^  and  others  clainainir  that 
in  order  to  make  sure  of  the  liability  of  the  guarantor  in 
any  case,  demand  must  be  made  of  the  principal,  and  notice 
of  default  sent  to  the  guarantor,  within  a  reasonable  time 
after  maturity.^ 

But  this  requirement  of  demand  and  notice  is  never 
considered  an  absolute  condition  precedent  to  the  liability 
of  the  guarantor.  The  guarantor  is  discharged  from  lia- 
bility, on  account  of  the  failure  of  demand  and  notice, 
only  when  such  failure  results  in  some  loss  or  damage  to 
the  guarantor,  which  he  could  have  avoided,  had  he  received 
notice  of  the  principal's  default  within  a  reasonable  time 
after  maturity.  If  he  has  sustained  no  loss,  he  is  liable, 
notwithstandino;  the  failure  of  demand*  and  notice.  For 
example,  the  guarantor  is  liable,  notwithstanding  the  want 
of  liotice,  if  the  principal  was  insolvent  at  and  before 
maturity  of  the  paper,  because  the  law  presumes  that  the 
guarantor  suffers  nothing  in  such  a  case.^ 

1  Brown  v.  Curtis,  2  N.  Y.  228;  Allen  v.  Rightraere,  20  Johns.  366; 
Heaton  v.  Hulbert,  S  Scam.  490;  Voltz  v.  Harris,  40  111.  159;  Wright  ■». 
Dyer,  48  Mo.  52(3;  Breed  v.  Hillhouse,  7  Conn.  523;  Read  v.  Cutts,  7 
Greenl.  186. 

2  Douglas  V.  Reynolds,  7  Pet.  126;  12  Pet.  523;  Oxford  Bank  v.  Haynes, 
8  Pick.  423;  Talbot  v.  Gay,  18  Pick.  535;  Newton  Wagon  Co.  v.  Diers,  10 
Neb.  285;  Second  Nat.  Bank  v.  Gaylord,  34  Iowa,  248;  Rodabaugh  v.  Pit- 
kin, 46  Iowa,  545 ;  Cannon  v.  Gibbs,  9  Serg.  &  R.  202. 

3  Reynolds  v.  Douglas,  12  Pet.  523;  Wilder  v.  Savage,  1  Story,  22; 
Van  Wartw.  Woolley,  3  B.  &  C.  439;  Bashford  v.  Shaw,  4  Ohio  St.  263; 
Hance  v.  Miller,  21  111.  636;  Rhett  v.  Poe,  2  How.  457.  See  Dickerson 
V.  Derrickson,  39  111.  577;  Voltz  v.  Harris,  40  111.  155;  Fuller  ?7.  Scott,  8 
Kan.  33;  Farmer's,  etc.,  Bank  v.  Kercheval,  2  Mich.  504.  .On  the  other 
hand,  damage  will  be  presumed  from  the  fact  that  the  pi'incipal  was 
solvent  at  maturity,  and  became  insolvent  before  demand  and  notice  of 
default.  Oxford  Bank  v.  Haynes,  8  Pick.  423;  Talbot  v.  Gay,  18  Pick. 
534;  Beeker  v.  Saunders,  6  Ired.  380;  Woodson  v.  Moody,  4  Humph. 
303;  Mayberry  v.  Boynton,  2  Harr.  24. 

697 


§    422  THE    RIGHTS    AND    LIABILITIES  [CH.   XXII, 

The  want  of  demand  and  notice  may  always  be  waived 
by  the  guarantor, ^  and  it  is  always  presumed  to  be  waived 
by  a  subsequent  promise  to  pay  the  debt.^ 

§  422.  Concealed  sureties  as  accomiuodatioii  parties  — 
Nature  of  their  liability. —  Admissibility  of  parol  evi- 
dence to  prove  real  character. —  If  the  accommodation 
party  to  commercial  paper  affixes  the  word  "surety"  to 
his  signature,  he  must  undoubtedly  be  treated  as  surety  by 
all  the  subsequent  holders  of  the  paper,  as  well  as  by  the 
original  parties  to  the  paper.^  And  so,  also,  will  one  be 
treated  by  all  as  principal,  who  describes  himself  as  such 
in  his  signature.*  But  where  the  party  signing  does  not 
expressly  indicate  in  what  character  he  does  sign,  the  au- 
thorities are  divided  as  to  what  is  the  proper  construction 
to  be  placed  upon  his  relation  to  the  other  parties.  The 
English  rule  is  that  where  one  who  appears  as  a  principal 
party  is  surety  for  another,  who  appears  to  be  a  secoruiary 
party,  drawer  or  indorser,  this  fact  may  be  shown  by  parol 
evidence,  and  the  party  who  is  in  fact  a  surety  will  be 
entitled  to  all  the  rights  and  privileges  of  a  surety,  as 
against  any  holder  who  knew  the  fact.  This  is  the  equit- 
able rule,  enforced  in  all  the  English  courts,  in  which 
equitable   pleas    are   admissible;  '^   but,    according   to   the 

1  Wadsworth  v.  Allen,  8  Gratt.  174;  Bickford  v.  Gibbs,  8  Gush.  154; 
Worcester  Co.  Inst.,  etc  ,  v.  Davis,  13  Gray,  531. 

2  Reynolds  v.  Douglas,  12  Pet.  523;  Louisville  Man.  Co.  w.  Welsh,  10 
How.  476;  Sigourney  v.  Wetherell,  6  Met.  563. 

3  Hunt  V.  Adams,  5  Mass.  358;  Robison  v.  Lyle,  10  Barb.  512;  Sayles 
V.  Sims,  73  N.  Y.  552,  the  last  case  holding  that,  where  there  are  three 
joint  makers,  and  one  signs  his  name  as  surety,  he  is  presumed  to  be 
surety  for  the  other  two,  in  the  absence  of  evidence  to  the  effect  that  one 
of  the  remaining  two  is  also  a  surety  for  the  third. 

*  Sprigg  V.  Bank  of  Mount  Pleasant,  10  Pet.  265. 

5  Erwin  v.  Lancaster,  6  Best  &  S.  Q.  B.  572;   Ilollier  v.  Eyre,  9  CI.  & 
F.  1,  45;  Pooley  v.  Harradine,  7  E.  &  B.  431,  435;  Strong  v.  Foster,  17 
C.  B.  201;  Taylor  v.  Burgess,  5  H.  6c  N.  1;  2  E.  &  E.  424,  429;  Bailey  v. 
Edwards,  4  B.  &  S.  761. 
698 


CH.  XXII.]  OF   SURETIES    AND    GUARANTORS.  §    422 

common-law  rule,  as  laid  down  by  Lord  Mansfield,  the 
parties  to  commercial  paper  sustain  the  liabilities  and 
enjoy  the  privileges  and  rights,  which  are  incident  to  their 
ostensible  characters,  and  no  others.  According  to  this 
rule,  it  is  not  permitted  to  show  by  parol  evidence  that  the 
drawer  or  indorser  is  the  principal  debtor,  and  that  the 
maker  or  acceptor  is  the  accommodation  party  or  surety,  in 
order  to  bind  the  subsequent  holder,  who  knows  the  fact.^ 
In  the  United  States,  a  few  highly  respectable  authori- 
ties have  adopted  the  English  equitable  rule.^  But  the 
weight  of  authority  in  this  country  favors  the  English 
common-law  rule.^  The  principal  reason  for  holding  to 
the  common-law  rule  is,  that  the  party  who  is  ostensibly 
the  primary  debtor  can  always  protect  himself  against  any 
act  of  indulgence  to  the  ostensibly  secondary,  but  actually 
primary  obligor,  by  paying  the  debt  himself,  and  recover- 
ing the  sum  so  paid  of  the  real  primary  debtor.^ 

1  Fentum  v.  Pocock,  5  Taunt.  192;  1  Marsh,  14;  Carstairs  v.  Rolles- 
ton,  5  Taunt.  551;  1  Marsh,  257;  Nichols  v.  Norris,  3  Barn.  &  Ad.  41; 
Price  V.  Edmunds,  10  B.  &C.  578;  Rolfe  v.  Wyatt,  5  C,  &  P.  181;  Harri- 
son V.  Cortauld,  3  Barn.  &  Ad.  37. 

2  Guild  V.  Butler,  127  Mass.  386;  Meggett  v.  Baum,  57  Miss.  22. 

3  Farmers',  etc.,  Bank  v.  Rathbone,  26  Vt.  19;  Stephens  v.  Mononga- 
hela,  88  Pa.  St.  157;  Wliite  v.  Hopkins,  3  Watts  &  S.  101;  Murray  w, 
Judah,  6  Cow.  484;  Yates  v.  Donaldson,  5  Md.  389;  Gano  v.  Heath,  36 
Mich.  441;  Hansborough  v.  Gray,  3  Gratt.  356;  Stiles  v.  Eastman,  1 
Kelly,  205;  Summerhill  v.  Tapp,  52  Ala.  227;  Bank  of  Montgomery  v. 
Walker,  9  Serg.  &  R.  229;  s.  c.  12  Serg.  &R.  382;  Lewis  v.  Hanchman,  2 
Barr.  416;  Clopper's  Admr.  v.  tJnion  Bank,  7  Har.  &  J.  92;  Lambert  v. 
Landlord,  2  Blackf.  137;  Cronise  v.  Kellogg,  20  HI.  13.  See  Parks  v. 
Ingram,  22  N.  H.  283;  Adle  v.  Metroger,  1  La.  Ann.  254. 

■*  Story  says  that  the  "  strong  tendency  of  the  more  recent  authorities 
is  to  hold  that,.in  all  cases,  the  holder  has  a  right  to  treat  all  the  parties 
to  a  note  as  liable  to  him  exactly  to  the  same  extent,  and  in  the  same 
manner,  whether  he  knows  or  not  the  note  to  be  an  accommodation  note; 
for,  as  to  him,  all  the  parties  agree  to  hold  themselves  primarily  or 
secondarily  liable,  as  they  stand  on  the  note;  and  that  they  are  not  at 
liberty,  as  to  him,  to  treat  their  liability  as  at  all  affected  by  an  accom- 
modation between  themselves."     Story  on  Promissory  Notes,  §  418. 

32  699 


§    423  THE    RIGHTS    AND    LIABILITIES  [CH.  XXII, 

But  where  there  are  two  or  more  joint  promisors  of  a 
promissory  note,  who  sign  ostensibly  as  joint  principals,  a 
different  phase  of  the  same  question  is  presented,  viz.  : 
whether  it  can  be  shown  by  parol  evidence  that  one  of  them 
is  surety,  and  has  the  privileges  of  a  surety  as  against  any 
holder  who  knows  his  real  character.  Here,  the  admission 
of  parol  evidence  to  prove  this  fact  would  not  result  in 
reversing  the  ostensible  relations  of  the  parties,  making 
the  apparent  obligor  a  secondary  obligor,  and  the  apparent 
secondary  obligor  primary.  As  to  the  substantial  claims  of 
the  holder,  there  would  be  no  change  in  consequence  of 
the  proof  of  the  real  relation  between  the  primary  obligors. 
The  only  difference  would  be  that  the  holder  cannot,  after 
learning  that  one  of  the  parties  is  a  surety,  do  anything  to 
the  prejudice  of  the  surety.  In  England  the  common-law 
rule  excludes  the  parol  evidence, ^  while  the  equity  rule 
admits  it.^  In  the  United  States  the  weight  of  author- 
ity is  in  favor  of  the  English  equity  rule,  and  admits 
parol  evidence  to  show  that  a  joint  promisor  is  in  fact  a 
surety. "^ 

§  423.  What  acts  will  discbarge  guarantors  and  sure- 
ties. —  In  the  first  place,  whatever    discharges  the   prin- 

1  Price  V.  Edmunds,  10  B.  &  C.  578;  Manley.  r.  Boycott,  2  El.  &  B.  40; 
Perfect  v.  Murgrave,  6  Price,  111;  Rees  v.  Berringtou,  2  Ves.  Jr.  540. 

2  Davies  v.  Stainback,  6  D.  G.  M.  &  G.  (179;  Greeuough  v.  McClel- 
land, 30  L.  J.  Q.  B.  15;  HoUier  v.  Eyre,  9  CI.  &  F.  45:  Pooley  v.  Har- 
radine,  7  El.  &  B.  431.  And  the  later  authorities  maintain  that  the  surety 
is  discharged  if  the  holder  knew  of  the  relation  of  suretyship  w  hen  he 
granted  an  indulgence  to  the  principal  debtor.  Baily  v.  Edwards,  4 
Best  &  S.  Q.  B.  761;  Ewin  v.  Lancaster,  6  Best  &  S.  Q.  B.  572;  Swire 
V.  Redman,  1  Q.  B.  Div.  536. 

3  Hubbard  v.  Gurney,  64  N.  Y.  460;  Sayles  v.  Sims,  73  N.  Y.  5.52; 
Grafton  Bank  v.  Kent,  4  N.  H.  221;  Irvine  v.  Adams,  48  Wis.  468;  Rose 
V.  AVilliams,  5  Kau.  489;  Garrett  v.  Ferguson,  9  Mo.  125;  Stillwell  r. 
Aaron,  69  Mo.  539;  Barron  v.  Cady,  40  Mich.  259;  Perry  v.  Hadnett,  38 
Ga.  104;    Harmon  v.  Hale,  1  Wash.  Ter.  423:  Wheat  c.  Kendall,  6  N.  H. 

700 


CM.  XXri.]  OF    SUIIETIES    AND    GUARANTORS.  §    423 

cipal  will  discharge  the  guarantor  or  surety,  whether  that 
discharge  arises  from  payment  or  release/  or  in  any  other 
way.^  Illegality  of  the  note  or  bill  will  ordinarily  dis- 
charge both  principal  and  surety;  ^  but  if  the  invalidity  of 
the  note  is  on  account  of  the  principal's  disability  as  a 
married  woman,  the  surety  is  nevertheless  bound,  if  his 
signature  has  not  been  procured  through  fraud. ^ 

For  the  reasons  heretofore  explained  the  discharge  of  a 
prior  indorser  works  a  discharge  of  the  subsequent  in- 
dorsers,  but  the  discharge  of  a  subsequent  indorser  has  no 
effect  upon  a  prior  indorser.^ 

In  the  second  place^  if  the  surety  has  been  induced  to 
sign  by  any  misrepresentation,  fraud  or  duress,  the 
surety  will  be  discharged  as  to  parties  guilty  of  these  of- 
fenses.^ 

In  the  third  place^  any  diversion  of  the  paper  from  its  in- 

504;  Branch  Bank  v.  James,  9  Ala.  94.  But  see  contra  Claremont  Bank 
y.  Wood,  10  Vt.  582;  Dunham  v.  Douney,  31  Vt.  249;  Benedict  v.  Cox,  52 
Vt.  250. 

1  Broadway  Sav.  Bank  v.  Schmucker,  7  Mo.  App.  171;  Eggemann  v. 
Heuschen,  56  Mo.  123 ;  Cowper  v.  Smith,  4  M.  &  W.  519.  But  tliis  would 
not  be  the  case,  where  in  the  release  there  is  an  express  reservation  of 
the  holder's  rights  of  action  against  the  secondary  obligors,  for  there 
would  be  in  such  a  case  an  implied  reservation  of  tlieir  remedies  against 
the  primary  debtor.  Gloucester  Bank  v.  Worcester,  10  Pick.  528; 
Stewart  v.  Edeu,  2  Cai.  121 ;  Tombeckbe  Bank  v.  Stratton,  7  Wend.  429. 

2  Sargent  v.  Appleton,  6  Mass.  85;  Couch  v.  Waring,  9  Conn.  261. 

3  Griffith  V.  Sitgreaves,  90  Pa.  St.  161;  Gill  v.  Morris,  11  Heisk.  614; 
Putnam  v.  Schuyler,  4  Hun,  168. 

*  Jones  V.  Crosthwaite,  17  Iowa,  393;  Allen  v. Berryhill,  27  Iowa,  531 ; 
Davis  V.  Staaps,  43  Ind.  103;  Hicks  v.  Randolph,  3  Baxter,  352;  Osbornu. 
Robbins,  36  N.  Y.  365. 

5  Newcomb  v.  Raynor,  21  Wend.  108;  English  v.  Darley,  2  Bos.  &  P. 
61 ;  Bank  of  U.  S.  v.  Hatch,  6  Pet.  250;  Lynch  v.  Reynolds,  16  Johns.  41; 
Claridge  v.  Daltou,  4  M.  &  S.  232;  Smith  v.  Knox,  3  Esp.  46;  White  v. 
Hopkins,  3  Watts.  &  S.  99. 

6  Hamilton  v.  Watson,  12  CI.  &  F.  109;  Anderson  v.  Warne,  11  111.  20; 
Solser  V.  Brock,  3  Ohio  St.  302;  Melick  o.  First  Nat.  Bank,  52  Iowa,  94; 
Harris  u.  Brooks,  21  Pick.  122. 

701 


§  424  TiiK   KKiiirs  am:)  liahii-itiks  [cir.  xxii. 

teutled  use'  or  alteration  of  its  terms  will  likewise  discharsre 
the  surety.^ 

§  424.  —  Surrender  of  securities  and  extension  of 
time  of  payment.  —  In  the  fourth  place,  the  surety  is 
also  discharged  where  the  interests  of  the  surety  have 
been  changed  or  damaged  by  the  surrender  of  securities 
for  the  debt,  or  by  extension  of  time  of  payment.  The 
sureties  are  entitled,  under  the  principle  of  subrogation,  to 
all  the  securities  and  all  the  remedies  which  the  creditor 
could  have  enforced  against  the  debtor.^  But  the  creditor 
is  under  no  obligation  to  make  use  of  the  remedies  against 
the  debtor;  and  his  delay  to  prosecute  the  debt,  however 
much  prolonged,  provided  it  be  not  for  the  statutory  period 
of  limitation,  would  not  involve  any  violation  of  the  rights  of 
the  sureties.*  In  the  absence  of  statute,  the  surety  cannot 
compel  the  creditor  to  bring  suit  against  the  debtor.^  And  it 
is  even  permissible  for  the  creditor  to  discontinue  proceedings 
already   begun  against  the    debtor,   without  affecting  the 

'  Dewey  v.  Cochrane,  4  Jones  184;  Southerlaud  v.  Whitaker,  5  Jones, 
5;  1  Parsons  N.  &  B.  23tj. 

2  As  to  effect  of  alterations  see  chapter  on  Forgeries  and  Alterations. 

3  Williams  v.  Price,  1  Sim.  &  St.  581;  King  v.  Baldwin,  2  Johns.  Ch* 
317;  Hayes  v.  Ward,  4  Johns.  Ch.  123;  Smith  v.  Jay,  23  Vt.  656;  Hurd  v. 
Spencer,  40  Vt.  581;  Treanor  v.  Yingling,  37  Md.  491;  Ex  parte  Mure,  1. 
Coxe,  93;  Humphrey  v.  Hitt,  6  Gratt.  509;  Sullivan  u.  Morrow,  4  Ind.  425; 
Kirkpatrick  v.  Hawke,  80  HI.  122;  Dillon  v.  Russell,  5  Neb.  484;  Muir- 
head  v.  Kirkpatrick,  9  Harris,  237. 

*  Page  V.  Webster,  15  Me.  249;  Berry  v.  Pullen,  69  Me.  101;  Veazie  v. 
Carr,  3  Allen,  14;  Powell  v.  Waters,  17  Johns.  176;  Bank  of  S.  C.  v.  Mey- 
ers, 1  Bailey,  412;  Freeman's  Bank  v.  Rollins,  13  Me.  202;  English  v.  Dar- 
ley,  2  B.  &  P.  61;  Wood  v.  Jefferson  Cow.  Bank,  9  Co.  194;  Sterling  v. 
Marietta  Co.,  11  Serg.  &  R.  179;  Worsham  v.  Goar,  4  Port.  (Ala.)  441. 

5  Croughton  v.  Duvall,  3  Call,  73;  Humphrey  v.  Hitt,  6  Gratt  509.  In 
New  York,  the  surety,  who  is  a  joint-maker  or  promisor,  is  di.scharged 
if  the  creditor  does  not  sue  the  debtor  within  a  reasonal)le  time,  and  the 
debtor  becomes  insolvent  in  the  meanwhile.  Pain  v.  Packard,  13  Johns. 
174;  17  Johns.  384. 
702 


CH.  XXII.]  OF    SURETIES    AND    GUARANTORS.  §    424 

liability  of  the  surety.^  But  while  the  surety  cannot  com- 
pel the  creditor  to  do  anything  affirmatively  for  his  benefit, 
he  will  be  discharged  if  there  is  any  surrender  of  securities, 
such  as  a  pledge  or  mortgage,  a  judgment  lien  or  levy ,2  or 
any  extension  of  time  or  forbearance  of  suit,  which  is  bind- 
ing upon  the  creditor,  and  which  consequently  deprives  the 
surety  of  his  right  to  sue  the  principal. 

But  in  order  that  the  indulgence  may  work  a  discharge 
of  the  surety,  it  must  rest  upon  a  binding  contract,  which, 
presupposes  a  sufficient  consideration.  Without  a  consid- 
eration the  promise  to  forbear  is  not  binding  on  the  creditor, 
and  hence  does  not  discharge  the  surety.^  Any  valuable, 
independent  consideration  will  be  sufficient  to  make  the 
agreement  binding.  The  promise  of  an  usurious  premium 
is  held  to  be  sufficient,  where  it  has  been  executed  by  pay- 
ment and  forbearance  ;  ^  but  not  where  the  promise  is  still 


1  Bellows  V.  Lovell,  5  Pick.  307;  Commissioners  v.  Ross,  3  Bin.  250; 
Moutpelier  Bank  v.  Dixon,  4  Vt.  399;  Lawson  v.  Saycler,  1  Md.  171, 
Withdrawal  of  execution  before  a  levy  is  permissible.  Lenox  v.  Front,  3 
Wheat.  520;  M'Kenny  v.  Waller,  1  Leigh,  434;  Morrison  u.  Hartman,  2 
Harris,  416;  Humplirey  v.  Hitt,  (i  Gratt.  509 ;  Alcock  v.  Hill,  4  Leigh,  622; 
Savvyer  v.  Bradford,  6  La.  572.  Discontinuance  of  steps  to  foreclose  a 
mortgage.  Butter  v.  Gambs.  1  Mo.  App.  466.  Failure  to  revive  judg- 
ment. United  States  v.  Simpson,  3  Pa.  437;  Farmers'  Bank  v.  Reynolds, 
13  Ohio,  84. 

^  Farmers'  Bank  v.  Reynolds,  13  Ohio,  84;  Ferguson  v.  Turner,  7  Mo. 
497 ;  Mayhew  v.  Crickett,  2  Swans.  193 ;  Woodward  v.  Walton,  7  Heisk. 
50;  Commonwealth  v.  Haas,  16  Serg.  &  R.  2.52;  Mayhew  v.  Boyd,  5  Md. 
102 ;  Sneod,  v.  White,  3  J.  J.  Marsh.  525 ;  Winston  v.  Yeargin,  50  Ala.  340 ; 
Clopton  V.  Spratt,  52  Miss.  251 ;  Case  ■;;.  Hawkins,  53  Miss.  702.  Neglect 
to  record  a  mortgage,  where  such  failure  destroys  its  value.  Barr  v. 
Boyer,  2  Neb.  265. 

2  McLemore  v.  Powell,  12  Wheat.  554;  Crawford  v.  Millspaugh,  13 
Johns.  87;  Galbraith  r.  Fullerton,  53  111,  126;  Buckalew  v.  Smith,  44  Ala. 
638;  And  t;.  Magruder,  10  Cal.  282;  Parkhurst  r.  Vail,  73  111.  343;  Bank 
of  Utica  V.  Ives,  17  Wend.  501;  Davis  v.  Graham,  29  Iowa,  514;  Payne  v. 
Commercial  Bank,  6  Sm.  &  M.  24;  Hazard  w.  White,  26  Ark.  155;  Ex  parte 
Balch.  2  Low,  440. 

*  Whittemore  v.  Ellison,  72  HI.  301;   Scott  v.  Harris,  76  N.  C.  205  (36 

703 


§    424  THE    RIGHTS    AND    LIABILITIES  [CH.  XXII. 

executory.^  So,  also,  will  the  surety  be  discharged,  where 
the  promise  to  forbear  rests  upon  the  giving  of  a  bonus,  in 
the  shape  of  an  increased  rate  of  interest, ^  or  the  payment 
of  a  regular  rate  in  advance.^  Whether  an  agreement  to 
pay  the  same  rate  of  interest  would  be  a  sufficient  con- 
sideration has  been  decided  both  in  the  aiBrmative*  and 
in  the  negative.^     Part  payijient  is  also  insufficient.*' 

^Aiu.  Rep.  871)  ;  Billiugton  v.  Wagoner,  33  N.  Y.  31;  Kyle  r.  Bostwick,  10 
Ala.  589;  Harbert  v.  I)umout;3  Iiid.  346;  Redraau  v.  Deputy,  26  Incl.  338; 
Cross  V.  Wood,  30  lud.  378;  Abel  v.  Alexander,  45  Iiid.  523;  Armistead 
V.  Ward,  2  Pat.  &  H.  504;  Hamilton  v.  Prouty,  50  Wis.  592;  Austin  v. 
Dorwin,21  Vt.  38;  People's  Bank  v.  Pearson,  30  Vt.  711;  Miller  v.  Mc- 
Cann,  7  Paige,  451;  Vilas  v.  Jones,  10  Paige,  7G. 

1  McCorab  V.  Kittridge,  14  Ohio,  348;  Braman  v.  Hawk,  1  Blackf.  392; 
Naylor  v.  Moody,  3  Blackf.  92;  Coman  v.  The  State,  4  Blackf.  241 ;  Meis- 
winkle  v.  Jung,  30  Wis.  3G1;  Church  v.  Maloy,  70  N.  Y.  63;  Smith  v. 
Hyde,  36  Vt.  306;  Burgess  v.  Dewey,  36  Vt.  618 ;  Vilas  v.  Jones,  1  N.  Y. 
274;  Halstead  y.  Brown,  17  Ind.  202;  Abel  v.  Alexander,  45  Ind.  523;  St. 
Maries  v.  Polleys,  47  Wis.  78;  Tudor  v.  Goodloe,  1  B.  Mon.  324;  Scott  v. 
Hall,  6  B.  Mon.  127;  Patton  v.  Shauklin,  14  B.  Mon.  17;  Irvine  v.  Adams, 
48  Wis.  468.  But  see  contra  Corielle  v.  Allan,  13  Iowa,  289;  Sraitli  v. 
Pearson,  52  Cal.  611;  Armistead  t'.  Ward,  3  Pat.  &  H.  504;  Wheat  v.  Ken- 
dall, 6  N.  H.  504.     See  Gates  v.  National  Bank,  100  U.  S.  248. 

2  Kittle  V.  Wilson,  7  Neb.  84.  But  the  surety  is  not  discharged  where 
the  increased  interest,  or  other  bonus,  is  by  statute,  or  by  agreement,  ap- 
plied as  part  payment  of  original  debt,  since  in  such  a  case  there  is  not 
actually,  though  ostensibly,  any  new  consideration.  Nightingale  v.  Me- 
ginuis,  34  N.  J.  461;    Schlus.sel  v.  Warren,  2  Ore.  18. 

^  2  Hare  &  Wallace  Lead.  Cas.  469.  But  the  promise  to  forbear  will  not 
be  presumed  from  the  payment  in  advance.  First  Nat.  Bank  v.  Leavitt, 
65  Mo.  563;  St.  Joseph  F.  &  M.  Ins.  Co.  v.  Hauck,  71  Mo.  466.  But  see 
contra  Crosby  v.  Wyatt,  10  N.  H.  322.  A  note  for  the  interest  has  the 
same  effect  as  payment  of  it  in  advance.  Gahn  v.  Niemcewicz,  11  Wend. 
312. 

4  Chute  v."Pattee,  37  Me.  102;  Fawcett  v.  Freshwater,  31  Ohio  St.  637 
(overruling  Jones  v.  Brown,  11  Ohio  St.  601,  and  affirming  McComb  v. 
Kittridge,  14  Ohio,  348,  which  had  been  overruled  by  Jones  v.  Brown) ; 
Blazer  v.  Bundy,  15  Ohio  St.  67;  Wood  v.  Newkirk,  15  Ohio  St.  295. 

a  Harter  v.  Moore,  5  Blackf.  367;  Abel  v.  Alexander,  45  Ind.  523  (over- 
ruling Pierce  v.  Goldberry,  31  Ind.  52);  Wilson  v.  Powers,  130  Mass. 
127;  Stuber  v.  Schack,  83  111.  192. 

6  Herbert  v.  Servin,  41  N.  J.  L.  225;  Jenness  v.  Cutler,  12  Kan.  500; 
704 


Cli.  XXII.]  OF    SURETIES    AND    GUARANTORS.  §    424 

In  the  next  place,  the  agreement  for  indulgence  must  be 
absolute^  and  the  time  of  forbearance  definite.  An  in- 
definite forbearance  does  not  so  bind  the  creditor  as  to  work 
a  discharge  of  the  sureties. ^  The  shortness  of  the  time 
does  not  matter  if  it  is  definite.'  But  it  must  be  for  a 
longer  time  than  what  is  required  to  obtain  judgment.*  A 
promise  to  forbear  for  one  of  two  periods  in  the  alternative, 
is  definite  as  to  the  shorter  period  and  discharges  the  surety.'' 
"Until  after  threshing"  has  been  held  to  be  sufficiently 
definite,"  while  "  after  harvest  time,"  was  elsewhere  de- 
clared to  be  too  indefinite  to  discharge  the  surety.^ 

It  is  hardly  necessary  to  state  that  an  unaccepted  offer 
of  forbearance  to  sue  is  insufficient.^ 

Here,  as  well  as  elsewhere,  the  surety  and  guarantor  are 
only  discharged  when  the  indulgence  or  surrender  of 
securities  would  result  in  injury  to  him  if  he  is  held  bound; ' 

Royal  V.  Lindsay,  15  Kan.  291;  Halderman  v.  Woodward,  22  Kan.  734; 
Pratlier  v.  Gannon,  25  Kan.  379;  Andrews  v.  Hagadon,  54  Tex.  571; 
Carraway  u.  Odeuhall,  56  Miss.  223.  But  see  Jaffray  w.  Crane,  50  Wis. 
oi9,  wliere  talking  a  note  for  part  of  a  debt,  tlie  other  part  having  been 
paid,  was  held  to  discliarge  the  surety. 

^  As  long  as  tlie  condition  of  a  conditional  agreement  to  forbear  is 
not  performed,  there  is  no  forbearance,  and  consequently  no  discharge 
of  the  sureties.  Hausberger  v.  Geiger,  3  Gratt.  144;  Norris  v.  Cum- 
miug,  2  Rand.  323. 

2  Gardner  v.  Watson,  13  III.  347;  Blackstone  Bank  v.  Hill,  10  Pick.  133; 
Menifee  v.  Clark,  35  Ind.  304;  Abel  v.  Alexander,  45  Ind.  523;  Alcock  v. 
Hill,  4  Leigh,  622;  Miller  v.  Stern,  2  Pa.  St.  286;  Parnell  v.  Price,  3  Rich. 
121. 

3  Fellows  V.  Prentiss,  3  Deuio,  512 ;  Smith  v.  Sheldon,  35  Mich.  42. 

4  Hallett  V.  Holmes,  18  Johns.  28 ;  Sizer  v.  Peacock,  23  Wend.  81 ; 
Price  V.  Edmunds,  10  Barn.  &  C.  578;  Isaac  v.  Daniel,  8  Ad.  &  El.  (n.  s.) 
500;  Loe  v.  Levi,  4  Barn.  &  C.  390;  1  C.  &  P.  553;  Fentum  v.  Pocock,  5 
Taunt.  192;  Bank  of  U.  S.  v.  Hatch,  6  Pet.  250. 

5  Scott  V.  Harris,  76  N.  C.  205. 

«  Moulton  V.  Posten,  52  Wis.  169. 

"  Findley  v.  Hill,  8  Ore.  248. 

8  Badnall  v.  Samuel,  3  Price,  521;  Hewet  v.  Goodrich,  2  C.  &  P.  468. 

»  Smith  V.  Harper,  5  Cal.  330. 

4.-,  705 


§    424  THE    RIGHTS    AND    LIABILITIES  [CH.   XXII. 

ill  the  latter  case  only  to  the  extent  of  the  securities  which 
have  been  surrendered.^  For  the  same  reason,  the  surety 
is  not  discharged  by  an  indulgence,  if  the  remedies  against 
the  surety  were  expressly  reserved,  for  the  reservation  of 
these  remedies  involves  by  necessary  implication  the  reser- 
vation of  the  sureties'  remedies  against  the  principal.'  So, 
also,  will  the  surety  be  held  bound,  if  the  extension  of  time 
or  surrender  of  securities  had  been  done  with  the  consent 
of  the  surety.^ 

It  is,  also,  possible  for  a  surety  to  waive  a  discharge  by 
a  subsequent  acknowledgment  or  promise  to  pay,  but 
whether  with  *  or  without^  a  new  consideration,  has  been 
differently  decided  by  the  courts. 

Finally,  the  agreement  for  indulgence  must  be  made  with 
the  principal  or  his  authorized  agent,  and  not  with  some 
third   party,  acting  independently  of  the   principal;^  the 

1  Loorais  V.  Fay,  24  Vt.  240;  Neff  's  Appeal,  9  Watts  &  S.  36;  Payne  r. 
Commercial  Bank,  6  Sm.  &  M.  24. 

2  Bouler  v.  Mayo,  19  C.  B.  (n.  s.)  70;  Ex  parte  Glendiuning,  1  Buck, 
517;  Ex  parte  Gifforct,  6  Ves.  807;  Nichols  v.  Norris,3  B.  &  Ad.  41 ;  Wag- 
man  V.  Hoag,  14  Barb.  233;  Morse  v.  Huntington,  40  Vt.  488;  Hagey  v. 
Hill  75  Pa.  St.  108;  Keuworthy  v.  Sawyer,  125  Mass.  28;  Muir  v.  Craw- 
ford 2  Scotch  App.  L.  R.  456;  Ex  parte  Carstairs,  1  Buck,  560;  Kearsley 
V.  Cole,  16  M.  &  W.  127;  Boultbee  v.  Stubbs,  18  Ves.  20;  Owen  v.  Homan, 
3  Eng.  L.  &  Eq.  125;  Stewart  v.  Eden,  2  Cal.  121;  Clagett  v.  Salmon,  5 
Gill  &  J.  314;  Viele  v.  Hoag,  24  Vt.  46.  But  see  contra  Gustine  v.  Union 
Bank,  10  Rob.  (La.)  412;  Harbert  v.  Dument,  3  Port.  (lud.)  246.  Parol 
evidence  is  admissible  to  show  that  the  agreement  for  indulgence  was 
not  intended  to  suspend  the  surety's  remedies.  Wyke  v.  Rogers,  1  DeG. 
M.  &  G.  408.     But  see  2  Daniel's  Negot.  Inst.,  §  1323. 

3  Gloucester  Bank  v.  Worcester,  10  Pick.  528;  Prouty  u.  Wilson,  123 
Mass.  297;  Bruen  v.  Marquand,  17  Johns.  58;  Mayhew  v.  Crickett,  2 
Swanst.  185;  Ludwig  v.  Iglehart,  43  Md.  39;  Norris  v.  Crummey,  2  Rand. 
334;  Hunter  v.  Jett,  4  Rand.  107;  Smith  v.  Hawkins,  6  Conn.  444;  Smith 
V.  Winter,  4  M.  &  W.  454;  Gray  v.  Brown,  22  Ala.  262;  1  Parsons'  N.  & 
B.  240;  Clark  v.  Devlin,  3  Bos.  &  P.  363. 

*  N.  H.  Sav.  Bank  v.  Colcord,  15  N.  H.  119. 
•       5  Fowler  v.  Brooks,  13  N.  H.  420;  1  Parsons'  N.  &  B.  242. 

6  Frazer  v.   Jordan,  8  El.  &   Bl.  303;  Lyon  v.  Holt,  5    M.  &  W.  543; 
Sterling  v.  Marietta,  etc.,  Co.,  11  Serg.  &  R.  179;  2  Parsons' N.  &  B.  241. 
706 


CH.  XXII.]  OF    SURETIES    AND    GUARANTORS.  §    425 

reason  being  that  there  is  not  privity  of  contract  between 
the  principal  and  the  obligee  of  the  contract,  and  conse- 
quently the  creditor  is  at  liberty  to  proceed  with  his  reme- 
dies against  the  principal,  although  he  would  thereby  subject 
himself  to  liability  to  the  third  party  for  the  breach  of  the 
contract  for  extension  of  time  or  forbearance. 

§  425.  Presumption  of  indulgence,  arising  from  re- 
ceipt of  securities.  —  If  the  security  is  already  due  and 
collectible,  when  it  is  received  by  the  creditor,  or  it  be- 
comes so  before  the  maturity  of  the  principal  debt,  no 
presumption  of  an  agreement  for  delay  can  arise  from  the 
acceptance  of  the  security  because  the  reliance  upon  such 
security  would  not  necessarily  occasion  delay  in  the  enforce- 
ment of  the  principal  debt.^  And  where  there  is  neither 
a  presumption  of,  nor  an  agreement  for,  delay,  the  mere 
acceptance  of  security  does  not  affect  the  rights  of  the 
creditor  against  the  surety. ^  But  if  the  security  falls  due 
after  the  maturity  of  the  principal  debt,  the  necessary 
delay  for  securing  satisfaction  out  of  the  security  would 
raise  the  presumption  of  an  agreement  for  extension  of 
time;  on  the  ground  that  "  such  indulgence  may  be,  and 
is  in  most  cases,  the  very  consideration  upon  which  the 
collateral  security  is  given  and  .obtained."  ^ 

1  Crafts  V.  Beale,  11  C.  B.  172  (2  Am.  Lead.  Cas.  273) ;  Board  of  Ed- 
ncation  v.  Fonda,  77  N.  H.  362. 

2  Bank  of  Utica  v.  Ives,  17  Wend.  502;  Gary  v.  White,  52  N.  Y.  138; 
Andrews  v.  Marrett,  58  Me.  539;  Lincoln  v.  Bassett,  23  Pick.  154;  Ster- 
ling V.  Marietta,  etc.,  Co.,  11  Serg.  &  R.  179;  United  States  v.  Hodge, 
€How.  279;  Ripley  v.  Greenleaf,  2  Vt.  129;  Suckley  v.  Furse,  15  Jolins. 
338;  Twopenny  v.  Young,  3  Barn.  &  C.  208;  Bedford  u.  Deakin,  2  B.  & 
Aid.  210;  Brengle  w.  Busliey,  40  Md.  141;  Tliompson  v.  Gray,  63  Me. 
230;  York  V.  Pierson,  63  Me.  587;  Sigourney  v.  Wetherell,  6  Met.  553; 
Payne  v.  Commercial  Bank,  6  Sm.  &  M.  24;  Wade  v.  Staunton,  5  How. 
(Miss.)  631;  Oxford  Bank  v.  Lewis,  8  Pick.  458;  Miller  v.  Kuiglit,  6 
Baxter,  503;  Priug  v.  Clarkson,  1  Barn.  &  C.  14. 

-  Okis   V.   Spencer,  2  Whart.    253;  Beard  v.   Root,  11  N.  Y.  S.  C.  (4 

707 


§    420  THK    RIGHTS    AND    LIAIilLITIES  [cil.  XXII. 

The  acceptance  of  a  second  bill  from  the  acceptor,  after 
dishonor  of  the  first,  payable  at  some  future  time,  would 
discharge  the  drawer  and  indorsers  of  the  first  bill,  even 
though  the  latter  is  not  surrendered  up  and  cancelled.^ 

§  426.   The    remedies    of    the    surety  —  Contribution. 

The  surety  has  three  remedies  for  the  protection  of  him- 
self against  loss :  Firsts  which  is  the  most  common  remedy, 
he  may  pay  the  debt  himself,  and  then  recover  it  back 
from  the  principal.'^  But  the  surety  cannot,  by  taking  a 
transfer  of  the  principal  debt,  recover  its  face  value,  irre- 
spective of  the  amount  he  has  actually  paid.  The  obliga- 
tion of  the  principal  to  the  surety  is  one  of  indemnity,  and 
the  surety  can  only  recover  of  the  principal  what  he  actually 
paid  in  liquidation  or  satisfaction  of  the  principal's  debt,^ 


Hun)  356;  Hubbard  v.  Gurney,  (j4  N.  Y.  400;  Pomeroy  v.  Tanner,  70  N. 
Y.  547;  Bangs  v.  Mosher,  23  Barb.  478;  Fellows  v.  Prentiss,  3  Den.  512; 
Eisner  v.  Kelly,  3  Daly,  485;  Michigan  St.  Bank  v.  Leavenworth,  28  Vt. 
215  (ovei'ruling  Ripley  y.  Greenleaf,  2  Vt.  129);  Arraistead  t;.  Ward,  2 
Pat.  &  H.  504;  Meyers  v.  Willis,  5  Hill,  463;  Couch  t\  Waring,  9  Conn. 
264;  Frois  v.  Mayfleld,  33 Tex.  801. 

1  Kendrick  v.  Lomax,  2  Cromp.  &  J.  405.  See  Michigan  St.  Bank  "v. 
Leavenworth,  28  Vt.  215;  Baker  i-.  Walker,  14  M.  &  W  .  464;  AVhitney  v. 
Going,  20  N.  H.  354;  Austin  v.  Curtis,  31  Vt.  64.  But  see  contra  Pring 
V.  Clarksou,  1  Barn.  &  C.  14;  2  Dow.  &  R.  78;  followed  in  Galen  v. 
Nieiucewitz,  16  Johns.  321. 

2  Humphrey  v.  Hitt,  6  Gratt.  524;  Story  on  Notes,  §  419;  Blow  i'. 
Maynard,  2  Leigh,  54;  Kendrick  v.  Forney,  22  Gratt.  570;  Pace  v.  Robert- 
sou,  65  N.  C.  550;  Burton  v.  Slaughter,  26  Gratt.  920;  Pitt  o.  Pursord,  8 
M.  &  W.  538;  Smith  v.  Sheldon,  35  Mich.  42;  Hall  v.  Smith,  5  How.  96; 
Edgerly  v.  Emerson,  23  N,  H.  555;  Hulett  v.  Soullard,  26  Vt.  296.  But 
no  action  is  maintainable,  until  the  surety  has  actually  paid  the  debt. 
Swift  y.  Crocken,  21  Pick.  241;  and  not  before  maturity  of  the  debt, 
Parks  V.  Ingram,  22  N.  H.  283. 

3  Delaware,  etc.,  R.  R.  Co.  v.  Oxford  Iron  Co.,  11  Stew.  151;  Bonney 
V.  Seely,  2  Wend.  481;  Pace  v.  Robertson,  65  N.  C.  550;  Butler  v.  But- 
ler, 8  W.  Va.  674;  Blow  v.  Maynard,  2  Leigh,  54;  ex  parte  Rushforth,  10 
Ves.  409,  420;  Read  y.  Norris,  14  Cond.  E.  C.  R.  362,  375;  Kendrick  v. 
Torney,  22  Gratt.  753;  Butcher  v.  Churchill,  14  Ves.  567.     The  same  rule 

708 


CH-   XXII.]  OF    SURETIES    AND    GUARANTORS.  §    426 

togi;etlier  with  interest  on  the  same  ^  and  the  costs  of 
suit. 2 

Secondly,  the  surety  may  in  some  of  the  States  file  a 
bill  in  chancery  to  enjoin  proceedings  against  the  surety  and 
to  compel  the  principal  debtor  to  pay  "^  or  to  compel  the  cred- 
itor to  sue  the  principal  debtor,  on  being  indemnified 
against  loss  by  delay  or  by  the  failure  to  secure  satisfac- 
tion.* 

Thirdly f  if  there  are  two  or  more  co-sureties,  the  surety 
who  pays  the  debt  has  the  right  to  claim  contribution  of 
the  co-sureties,  in  equal  proportions.^  And  this  claim  of 
contribution  can  be  enforced,  whether  it  arises  from  the 
same,  or  from  different  instruments ;  ^  and  even  when  their 
joint  liability  was  unknown  to  them  at  the  time  of  making 
the  contract.^  Successive  indorsers  are  not  co-sureties,  un- 
less they  have  by  special  agreement  made  themselves 
such.^  But  accommodation  indorsers,  who  sign  as  sureties 
for  the  maker,  sustain  to  each  other  the  relation  of  co- 
sureties.^ 


applies  although  the  surety  has  received  from  the  principal  a  note  for 
his  indemnity.     Child  v.  Eureka  Powder  Works,  44  N.  H.  354. 

1  Petre  v.  Buncombe,  20  L.  J.  Q.  B.  242. 

*  Hale  V.  Andrews,  6  Cow.  226;  Cleveland  v.  Covington,  3  Strobh.  184. 
That  costs  are  not  allowable,  where  there  is  a  frivolous  defense,  see  I 
Parsons'  N.  &  B.  243. 

3  Humphrey  v.  Hitt,  6  Grat.  524;  Irick  v.  Black,  2  C.  E.  Green,  189. 

4  Humphrey  v.  Hitt,  6  Gratt.  524;  King  v.  Baldwin,  17  Johns.  324. 

5  Davis  V.  Emerson,  17  Me.  64;  Pitt  v.  Purssord,  8  M.  &  W.  538; 
Trevert  v.  Henry,  14  Nev.  191;  Fletcher  v.  Jackson,  23  Vt.  581 ;  Whiting 
V.  Burke,  L.  R.  6  Ch.  App.  342;  Derosset  v.  Bradley,  63  N.  C.  17;  Camps 
V.  Simmons,  62  Ga.73;  Norton  v.  Coons,  6  N.  Y.  33;  Laphara  v.  Barnes, 
2  Vt.  213;  Elint  v.  Day,  9  Vt.  345;   Monsou  v.  Drakely,  40  Conn.  552. 

6  Deeriug  v.  Earl  of  Wiuchelsea,  2  Bos.  &  P.  270;  Mayhew  v.  Crick- 
ett,  2  Swanst.  184. 

'  Norton  u.  Coons,  6  N.  Y.  33;  Craythorn  v.  Swinburne,  14  Ves.  169. 
8  Briggs  V.   Boyd,  37  Vt.  534;  Phillips  v.  Preston,  5  How.  278;   Mc- 
Nielly  v.  Patchin,  23  Mo.  40. 

3  Steckel  v.  Steckel,  28  Pa.  St.  233. 

700 


§    426        KIGIITS    AND    LIABILITIES    OF    SURETIES.       [CU.  XXH, 

The  claim  to  contribution  nuiy  be  released  by  the  sureties 
themselves  with  ^  or  without  ^  the  co-operation  of  the  prin- 
cipal. 

But  the  surety  cannot  claim  contribution  until  he  has 
paid  more  than  his  share  of  the  debt;  for  the  claim  of  con- 
tribution depends  upon  the  payment  of  what  the  other 
surety  was  obliged  to  pay.  And  there  must  be  an  actual 
payment.^ 

1  Simmons  v.  Camp,  64  Ga.  726. 

2  Paul  V.  Berry,  28  111.  158. 

3  Davis  V.  Humphreys,  6  M.  &  W.  153;  Browne  v.  Lee,  6  B.  &  C.  421 ; 
Magruder  v.  Admire,  4  Mo.  App.  133;  Cowell  u.  Edwards,  2  B.  &  P.  268; 
Schoolley  v.  Fletcher,  45  Ind.  86;  In  re  McLean  v.  Jones,  2  U.  C.  L.  J. 
(N.  s.)  206. 

710 


CHAPTEK    XXIII. 

CHECKS. 

Skction  430.  Definition, 

431.  Checks  payable  to  oi'cler. 

432.  Checks  are  drawn  on  bank  or  banker. 

433.  Apparently  and  presumptively  drawn  against  a  deposit. 

434.  It  must  be  payable  on  demand  without  grace. 

435.  The  form  and  formalities  of  the  check. 

436.  Certification  of  checks. 

437.  Form  of  certification. 

438.  "Who  may  certify  for  the  bank. 

439.  "What  checks  may  be  certified  and  when. 

440.  Negotiability  and  transfer  of  checks. 

441.  Memorandum  checks. 

442.  Presentment,  Notice  and  Protest  of  Checks. 

443.  Within  what  time  must  check  be  presented. 

444.  Whether  check  can  be  presented  by  mail. 

445.  Excuses  for  failure  or  delay  in  demand  and  notice  of  dis- 

honor. 

446.  When  is  a  check  considered  stale  or  overdue. 

447.  The  right  to  draw  against  deposits  —  How  must  check  be 

executed. 

448.  Whether  death  revokes  check. 

449.  Conditions  which  the  bank  may  exact,  before   honoring 

check. 

450.  Order  of  payment. 

451.  Forgeries  and  alterations. 

452.  The  right  of  checkholders  to  sue  the  bank. 

453.  Right  of  bank  to  offset  amount  due  by  checkholder. 

454.  Overchecks. 

465.  Actual  and  presumptive  rights  and  liabilities  of  the  drawer 

of  a  check. 

466.  Payment  by  checks. 

§  430.  Definition.  —  A  check  may  be  defined  to  be  a 
draft  or  order,  having  essentially  the  characteristics  of  a 
bill  of     exchange,    and    differing     from    the    bill  (1)  in 

711 


§  4.'>1  CHECKS.  [cii.  xxirr. 

being  drawn  on  a  bank  or  l)anker,  (2)  apparently  and  })re- 
sumptively  against  a  deposit  of  funds,  and  (3)  payable  on 
demand  without  grace.  The  attempt  to  define  checks 
by  comparing  them  with  bills  of  exchange  is  frequently 
criticised,  as  furnishing  an  incomplete  definition.^  But 
the  definition,  given  in  the  text,  is  sufficient  to  point  out  the 
essential  characteristics  of  a  check,  without  requiring  a 
second  discussion  of  those  principles,  which  are  common 
to  both  bills  and  checks;  while  the  points  of  differentiation 
between  the  two  kinds  of  paper  are  more  clearly  and 
prominently  set  forth. ^ 

§  431.  Checks  payable  to  order. — According  to  the 
English  authorities,  the  bank  is  under  no  obligation  to  pay 
checks  which  are  payable  to  order,  for  the  reason  that  the 
law  merchant  docs  not  require  it  to  assume  the  risk  of  pay- 


1  2  Daniel's  Negot.  Inst.,  §  1567.  Mr.  Daniel  defines  a  check  to  be 
•'  (1)  a  draft  or  order  (2)  upon  a  bank  or  banking  house,  (3)  purporting 
to  be  drawn  upon  a  deposit  of  funds  (4)  for  the  payment  at  all  events  of 
a  certain  sum  of  money,  (5)  to  a  certain  person  therein  named,  or  to  him 
or  his  order,  or  to  bearer,  and  (G)  payable  instantly  on  demaud."  2 
Daniel,  §  15GC. 

2  In  defining  bank  checks,  the  Supreme  Court  of  the  United  States 
says:  "Bank  checks  are  not  inland  bills  of  exchange,  but  have  many  of 
the  properties  of  such  commercial  paper,  and  many  of  the  rules  of  the 
law  merchant  are  alike  applicable  to  both.  Each  is  for  a  specific  sum, 
payable  in  money.  In  both  cases  there  is  a  di*awer,  drawee,  and  payee. 
Without  acceptance  no  action  can  be  maintained  by  the  holder  upon 
either,  against  the  drawee.  The  chief  points  of  difference  that  (1)  a 
check  is  always  drawn  on  a  bank  or  banker.  (2)  No  days  of  grace  are 
allowed.  (3)  The  drawer  is  not  discharged  by  the  laches  of  the 
holder  in  presentment  for  payment,  unless  he  can  show  that  he  has  sus- 
tained some  injury  by  the  default.  (4)  It  is  not  due  until  payment  is 
demanded,  and  the  statute  of  limitations  runs  only  from  that  time. 
(5)  It  is  by  its  face  tlie  appropriation  of  so  much  money  of  tlie  drawer 
in  the  hands  of  the  drawee  to  the  payment  of  an  admitted  liability  of 
the  drawer.  (6)  It  is  not  necessary  that  the  drawer  of  a  bill  should 
have  funds  in  the  hands  of  the  drawee.  A  check  in  such  cases  would  be  a 
fraud."     Merchants'  Bank  v.  State  Bank,  10  Wall.  647. 

712 


CH.  XXIII.]  CHECKS.  §    432 

ing  the  check  to  a  wrong  person  on  a  forged  indorsement.^ 
By  a  late  act  of  Parliament,'^  checks  payable  to  order  are 
declared  to  be  legal  and  binding  on  the  bank,  but  the  same 
act  provides  that  the  bank  is  not  responsible  if  it  pays  to 
the  wrong  person  by  reason  of  a  forged  indorsement.-^ 
But  the  English  rule  is  not  followed  in  the  United  States; 
and  there  it  is  held  that  the  bank  is  obliged  by  custom  to 
honor  checks  payable  to  order,  and  pays  them  at  its  peril 
to  any  other  than  the  person,  to  whose  order  they  are  made 
payable.* 

§  432.   Checks  are  drawn  on  bank   or  banker.  —  The 

authorities  are  agreed  as  to  the  absolute  necessity  of  a  check 
being  drawn  on  a  bank  or  banker,^  although  it  is  not 
necessary  for  the  drawee  to  be  expressly  designated  as  such 
in  the  paper.''  This  circumstance  or  fact,  however,  will 
not  alone  give  to  an  order  the  character  of  a  check;  for  a 
bill  of  exchange  may  be  drawn  on  a  bank  or  on  one  who  is 
a  banker.^ 


1  Bellamy  v.  Mojoribanks,  8  Eng.  L.  &  Eq.  519. 

2  16  &  17  Vict.,  ch  59,  §  19. 

3  The  act  provides  that  "  any  draft  or  order  drawn  upon  a  banker  for 
a  sum  of  money  payable  to  order  on  demand,  which  shall,  when  pre- 
sented for  payment,  purport  to  be  indorsed  by  the  person  to  whom  the 
same  shall  be  drawn  payable,  shall  be  a  sufficient  authority  to  such 
banker  to  pay  the  amount  of  such  draft  or  order  to  the  bearer  thereof, 
and  it  shall  not  be  incumbent  on  such  banker  to  prove  that  such  in- 
dorsement, or  any  subsequent  indorsement,  was  made  by  or  under  the 
direction  or  authority  of  the  person  to  whom  said  draft  or  order  was 
or  is  made  payable,  either  by  the  drawer  or  any  indorser  thereof." 
See  Charles  v.  Blackwell,  2  Com.  PI.  Div.  H.  C.  J.  151. 

*  Mcintosh  V.  Lytle,  23  Miuu.  336;  Dodge  v.  Nat.  Exchange  Bank,  30 
Ohio  St.  8;  Bowen  v.  Newell,  4  Selden,  190.  But  see  Woodruff  v.  Mer- 
chants' Bank,  25  Wend.  672. 

5  Espy  V.  Bank  of  Cincinnati,  18  Wall.  620;  Deemer  v.  Bi-own,  1  Mc- 
Arth.  353;  Bowen  v.  Newell,  8  N.  Y.  195. 

6  Planters'  Bank  v.  Kesee,  7  Heisk.  200. 

''  Georgia  Nat.  Bank  v.  Henderson,  46  Ga.  495. 

713 


§  434  CHECKS.  [en.  xxiii. 

§  433.  Apparently  and  presuuiptively  drawn  atjain.st  a 
deposit.  —  It  is  also  required  to  constitute  a  check,  that  the 
order  purport  to  be  drawn  against  funds  on  deposit.  Inas- 
much as  no  one  has  the  right,  without  special  consent,  to 
draw  on  a  bank  when  he  has  no  funds  on  deposit  with  the 
bank,  it  has  been  sometimes  stated  that  a  check  is  an  order 
on  an  existing  fund  or  deposit.*  But  it  is  not  true  that  the 
fact,  that  there  is  no  deposit,  will  change  the  character  of 
the  order,  which  is  apparently  drawn  against  a  deposit.  If 
the  order  appears  on  its  face  to  be  drawn  on  some  deposit, 
it  is  a  check,  even  if  there  is  no  deposit,  and  the  order  was 
drawn  without  the  consent  of  the  bank  or  bankers.^ 

§  434.   It  must  be  payable  on  demand  without  grace.  — 

It  is  maintained  by  some  of  the  authorities  that  an  order 
on  a  bank,  payable  on  a  certain  named  day,  for  example, 
on  the  10th  of  July,  is  a  check,  and  is  payable  without 
days  of  grace. -^     And  an  order  has  been  held  to  be  a  check, 

J  Morrison  v.  Bailey,  5  Ohio  St.  13;  Espy  v.  Bank  of  Cincinnati,  18 
Wall.  020.  It  has  been  held  that  if  there  is  no  fund  or  deposit  to  be 
drawn  against,  the  order  is  necessarily  a  bill  of  exchange.  Planters' 
Bank  v.  Kesee,  7  Heisk.  200.     See  Brown  v.  Lusk,  4  Yerg.  210. 

2  See  Deemer  v.  Brown,  1  McArth.  350;  Champion  v.  Gordon,  70  Pa. 
St.  476;  Newman  v.  Kaufman,  28  La.  Ann.  865. 

3  Matter  of  Brown,  2  Story,  502;  Champion  v.  Gordon,  70  Pa.  St. 
474;  Bowen  v.  Newell,  5  Sandf.  326.  In  Champion  v  Gordon,  supra, 
Sharswood,  J.,  said:  '' The  ordinary  commercial  form  of  a  bill  of  ex- 
change payable  at  a  future  day  is  at  so  many  days'  or  months'  notice 
after  date  or  sight.  An  order  so  drawn,  whether  upon  a  Ixauker  or  any 
other  person,  OTight  to  be  regarded  as  a  bill,  with  all  the  privileges  and 
liabilities  which  by  the  law  merchant  are  incident  to  a  bill.  The  drawer 
by  adopting  the  usual  form  must  be  held  so  to  intend.  So  if  an  order 
be  drawn  on  a  merchant  or  other  person  not  a  banker,  with  whom  the 
drawer  keeps  money  on  deposit  subject  to  draft,  payable  at  a  future 
day  named,  there  exists  no  reason  why  the  same  rule  should  not  apply. 
But  there  is  a  good  reason  why  there  should  be  a  difference  between  an 
order  so  drawn  upon  a  banker,  which  certainly  must  be  presumed  to  be 
by  a  person  who  keeps  money  on  deposit  with  such  banker,  subject  to 
draft,  and  an  order  on  a  merchant  or  other  person.     If  such  an  order, 

714 


CH.  XXIII.]  CHECKS.  §    435 

where  it  is  drawn  on  a  banker,  and  apparently  against  a 
deposit,  although  it  is  made  payable  a  given  number  of 
days  after  date  or  sight. ^  But  the  weight  of  authority  is 
decidedly  opposed  to  this  view,  and  holds  that  no  order  is  a 
check  unless  it  be  payable  instantly  on  demand.^  If  it  is 
desired  to  draw  a  bill  of  exchange  payable  at  a  future  day, 
without  acceptance  and  without  days  of  grace,  this  end  can 
be  attained  by  express  provisions  to  that  effect. 

The  courts  are  also  divided  as  to  the  admissibility  of  parol 
evidence  to  prove  a  local  usage  in  business  circles  to  regard 
drafts  payable  at  a  future  day  as  checks;  some  of  the 
cases  holding  such  parol  evidence  to  be  inadmissible,^  and 
others  that  it  is  admissible.* 

§  435.   The  form  and  formalities  of  the  check.  — The 

form  and  formalities  of  the  check  differ  but  little  from  that 
of  the  ordinary  bill  of  exchange.  Like  all  other  kinds  of 
commercial  paper,  the  check  usually  contains  a  dat.e, 
although  this  is  not  necessary  to  the  validity  of  the  instru- 

drawn  upon  a  bank  payable  at  a  future  day  named  in  it,  must  be  consid- 
ered as  an  inland  bill  of  exchange,  and  not  a  check,  then  the  payee  or 
holder  has  the  right  to  present  it  at  once  for  acceptance,  and  sue  the 
drawer  immediately.  Should  it  be  accepted,  however,  the  funds  of  the 
drawer  in  the  bank  would  necessarily  be  thereby  tied  up  until  the  day  of 
payment.  All  the  objects  of  directing  payment  at  a  future  day  would 
thus  be  frustrated.  What  the  drawer  undertakes  is,  that  on  a  day 
named  he  will  have  the  amount  of  the  check  to  his  credit  in  the  bank. 
In  the  meantime  he  wants  the  full  and  free  use  of  his  entire  deposit. 
It  is  not  denied  that  a  post-dated  check  cannot  be  presented  for  accept- 
ance. That  is  by  implication  payable  on  a  future  day.  Why,  then,  is  a 
check  expressly  so  made  payable  to  stand  on  different  grounds?  " 

^  Westminster  Bank  v.  Wheatou,  4  R.  I.  30. 

2  Henderson  v.  Pope,  39  Ga.  361;  Georgia  Nat.  Bank  v.  Henderson, 
46  Ga.  496,  Ivory  v.  Bank  of  the  State,  36  Mo.  475;  Morrison  v.  Bailey, 

5  Ohio  St.  13;  Andrew  v.  Blackley,  11  Ohio  St.  89;  Minturn  v.  Fisher,  4 
Cal.36;  Work  v.  Tatman,  2  Houst.  (Del.)  304;  Bradley  u.  Harrington, 

6  Harr.  305. 

'  Morrison  ».  Bailey,  5  Ohio  St.  13;  Minturn  v.  Fisher,  4  Cal.  35. 
^  Bowen  v.  Newel!,  3  Kern.  290;  Champion  v.  Gordon,  70  Pa.  St.  476. 

715 


§    435  CHECKS.  [CH.  XXIII. 

ment.^  It  may  contain  the  true  date  ;  or  the  check  may  be 
ante-dated  or  post-dated.  And  where  a  check  is  post-dated, 
it  may  be  negotiated  immediately,  but  it  is  not  payable  be- 
fore the  given  date.  The  check  is  post-dated  to  enable  the 
creditor  to  procure  the  means  of  satisfjnng  his  debt,  while 
the  debtor  is  given  time  in  which  to  meet  the  paj^ment  of 
the  check. 2 

The  check  must  also  call  for  the  payment  of  money,  and 
the  same  rules  appl}"  here  to  the  check  as  were  found  to 
govern  all  other  kinds  of  commercial  paper,  in  reference 
to  the  subject-matter.'^ 

In  respect  to  the  address  of  the  drawee,  the  check  differs 
somewhat  in  form  from  the  bill  of  exchange.  In  a  bill  of 
exchange,  the  drawee's  address  is  almost  invariably  in  the 
left-hand  corner,  at  the  bottom.  In  a  check,  the  address 
of  the  bank  is  usually  written  in  large  letters  across  the  top; 
and,  although  it  is  sometimes  done,*  it  is  not  necessary  for 
any  other  address  in  the  left-hand  corner,  such  as  "to  the 
cashier."  ^ 

Where  the  check  is  drawn  on  a  banker  or  banking  firm, 
instead  of  on  a  chartered  bank,  it  is  probably  the  invari- 

1  2  Daniel's  Negot.  lust.,  §  1597;  Morse  on  Banking,  238. 

2  Moliawk  Bank  v.  Broderick,  10  Wend.  304;  s.c.  13  Wend.  133;  Salter 
.  Burt,  20  Wend.  205;   Whister  v.  Foster,  32  L.  J.  C.  P.  161;  14  C.  B. 

(n.  s.)  238;  Austin  v.  Buuyard,  34  L.  J.  217;  Taylor  v.  Sip,  1  Vroom, 
284;  Allen  v.  Keeves,  1  East,  435;  Matter  of  Brown,  2  Story,  502.  If 
the  post-date  happens  to  fall  on  Sunday,  the  check  is  not  payable  before 
the  Monday  following.     Salter  r.  Burt,  supra. 

3  See  Rastell  v.  Draper,  Yelv.  80;  Moore,  775;  Cro.  .Jac.  88;  Corgan 
u.  Frew,  39  111.  31;  Kearney  v.  King,  2  Bam.  &  Aid.  301;  Northrop  v. 
Sanborn,  22  Vt.  433;  Smith  v.  Smith,  1  R.I.  398.  See,  for  a  full  discussion 
of  this  matter,  ante,  §§  29-29e. 

*  Matter  of  Brown,  2  Story,  502;  Allen  v.  Sea  Fire,  etc.,  Ins.  Co.,  M. 
G.  &  S.  573;  Ellison  t\  Callingridge,  M.  G.  &  S.  570, 

5  2  Daniel's  Negot.  Inst.,  §  1581.     But  see  Morse  on  Banking,  238, 
whei'e  it  is  held  to  be  safer  to  consider  the  address  "to  the  cashier"  to 
be  essential. 
716 


CH.  XXIII.]  CHECKS.  §    43(3 

able  custom  to  put  the  address  in  the  left-hand  corner,  as 
in  the  bill  of  exchanoje. 


§  436.  Certification  of  checks.  —  Since  the  check  is  in- 
tended to  be  paid  immediately,  and  is  payable  on  demand, 
the  parties  cannot  be  said  to  contemplate  any  presentment 
for  acceptance,  it  being  payable  whenever  there  is  a  pre- 
sentment for  any  purpose.^  But  where  the  holder  desires 
to  be  assured  that  the  bank  will  pay  the  check  when  it  is 
presented  for  payment,  and  yet  keep  the  check  in  circula- 
tion, he  may  do  so  by  having  the  check  certified  by  an  offi- 
cer of  the  bank.  The  certification  of  checks  is  of  very 
recent  origin  ;  but  the  practice  has  now  become  so  common 
that  "it  is  computed  by  competent  authority  that  the 
average  daily  amount  of  such  (certified)  checks  in  use  in 
the  city  of  New  York  is  not  less  than  one  hundred  millions 
of  dollars."  2  Certification  has  been  said  to  be  the  "  equiva- 
lent of  acceptance."  ^  But  this  is  only  true,  so  far  as  the 
liability  of  the  drawee  is  concerned.  As  in  the  case  of 
acceptance,  the  certification  of  the  check  makes  the  bank 
the    principal  debtor.*     The    claim   to   that   part    of   the 

• 

1  See  ante,  §  434. 

2  Merchants'  Bank  v.  State  Bank,  10  Wall.  648;  Swayne,  J.,  saying: 
"  The  practice  of  certifying  checks  has  grown  out  of  the  business  needs 
of  the  country.  They  enable  the  holder  to  keep  or  convey  the  amount 
specified  with  safety.  They  enable  persons  not  well  acquainted  to  deal 
promptly  with  each  other,  and  they  avoid  the  delay  and  risks  of  receiv- 
ing, counting,  and  passing  from  hand  to  hand,  large  sums  of  money.  It 
is  computed  by  a  competent  authority  that  the  average  daily  amount  of 
such  checks  in  use  in  the  city  of  New  York  is  not  less  than  one  hundred 
millions  of  dollars.  We  could  hardly  inflict  a  severer  blow  upon  the 
commerce  and  business  of  the  country  than  by  throwing  a  doubt  on  their 
validity." 

3  Merchants'  Bank  v.  State  Bank,  10  Wall.  648. 

4  Merchants'  Bank  v.  State  Bank,  10  Wall.  648 ;  Freund  v.  Importers, 
etc.,  Bank,  19  N.  Y.  S.  C.  537;  First  Nat.  Bank  v.  Leach,  52  N.  Y.  3J0; 
Essex  Co.  Bank  v.  Bank  of  Montreal,  7  Biss.  193;  Andrews  v.  German 
Nat.  Bank,  9  Heisk.  217. 

717 


§    430  CHECKS.  [CH.   XXIII. 

deposit  is  transferred  by  certification  from  the  depositor  to 
the  holder  of  the  check,  and  consequently  the  depositor  can- 
not thereafter  countermand  the  check,  or  exercise  any  other 
control  over  that  part  of  the  deposit  which  is  covered  by  the 
check. ^  On  the  other  hand,  the  bank  cannot  relieve  itself  of 
liability  by  showingthat  the  check  wasa  forgery,  or  that  there 
were  no  funds,  the  certification  being  the  assumption  of  an 
absolute  liability.^ 

In  every  other  way,  the  certification  of  checks  differs 
from  the  acceptance  of  bills  of  exchange.  Thus,  since  the 
parties  are  presumed  to  have  intended  immediate  present- 
ment for  payment,  the  bank  cannot  do  anything  but  pay 
the  check,  when  it  is  presented,  without  discharging  the 
drawer  and  indorsers.  The  certification  of  the  check, 
therefore,  operates  to  discharge  these  parties  to  the  instru- 
ment, and  leaves  the  bank  alone  liable  on  the  check. ^ 

The  certified  check  also  circulates  as  cash,  in  consequence 
of  the  absolute  assumption  of  liability  by  the  bank,  and 

1  Gerard  Bank  v.  Bank  of  Penn  Township,  39  Pa.  St.  92;  Freund  v. 
Importers,  etc.,  Bank,  19  N.  Y.  S.  C.  (12  Hun)  537;  76  N.  Y.  352;  First 
National  Bank  v.  Leach,  52  N.  Y.  350. 

2  Espy  V.  Bank  of  Cincinnati,  18  Wall.  621.  The  bank,  however,  by 
its  certification,  does  not  do  more  than  warrant  the  genuineness  of  the 
drawer's  signature,  and  the  officer  is  not  authorized  to  bind  the  bank 
by  any  more  extensive  guaranty  or  assurance.  Security  Bank  v.  National 
Bank,  67  N.  Y.  458;  "White  v.  Continental  Bank,  64  N.  Y.  316;  Marine 
Nat.  Bank  v.  Nat.  City  Bank,  59  N.  Y.  67.  And  if  the  check  has  been 
certified  by  mistake,  the  certification  may  be  revoked  and  annulled,  as 
long  as  it  is  possible  for  this  to  be  done  in  time  to  restore  the  holder  of 
the  check  to  his  original  position,  and  to  his  remedies  over  against  the 
drawers  and  indorsei'S.  Irving  Bank  v.  Wetherald,  34  Barb.  323 ;  36  N. 
Y.  335;  Second  Nat.  Bank  v.  West.  Nat.  Bank,  51  Md.  128.  It  cannot  be 
revoked  after  the  check  has  been  transferred  to  a  bona  fide  holder,  with- 
out notice  of  the  mistake.     Bank  of  Republics.  Baxter,  31  Vt.  101. 

3  2  Daniel's  Negot.  Inst.,  §  1604;  Essex  Co.  Nat.  Bank  v.  Bank  of 
Montreal,  7  Biss.  197;  Fir.st  Nat.  Bank  v.  Leach,  52  N.  Y.  350.  But 
where  the  indorser  consents  to  the  certification,  or  indorses  afterwards, 
he  is  bound,  along  with  the  bank.  Mutual  Nat.  Bank  v.  Rotge,  28  La. 
Ann.  933. 

718 


CH,  XXIII.]  CHECKS.      *  §    438 

the  amount  of  the  check  may  be  recovered  of  the  bank  at 
any  time  within  the  statutory  period  of  limitations.^ 

§437.  Form  of  certification. —  Ordinarily,  the  bank 
officer  simply  writes  across  the  face  of  the  check  the 
word  "  good  "  ^  or  his  name  or  initials;^  and  probably 
both  should  be  used. 

A  verbal  statement  of  a  bank  officer  that  the  check  was 
"good,"  or  a  verbal  promise  by  him  would  have  the 
effect  of  a  reo-ular  written  certification  across  the  face  of 
the  check;  provided  it  be  communicated  to  the  holder,  as 
an  inducement  for  him  to  take  the  check.*  But  where  the 
bank  certifies  the  checks  without  having  funds  of  the 
drawer,  it  is  held  to  be  to  such  an  extent  a  promise  to 
answer  for  the  debt  of  another,  that  it  must  be  in  writing, 
in  order  to  satisfy  the  requirements  of  the  statute  of 
frauds.^ 

§  438.  Who  may  certify  for  the  bauk.  —  The  by-laws 
of  the  bank  may  give  to  any  officer  the  express  power  to 
certify  checks.     But,  ordinarily,  this  is  not  done,  and  only 

1  Gerard  Bank  v.  Bank  of  Peun  Township,  39  Pa.  St.  92;  Willetts  v. 
Phoenix  Bank,  2  Duer,  121;  2  Daniel's  Negot.  Inst.,  §  1603;  Morse  on 
Banking,  281-283. 

2  Barnett  v.  Smith,  30  N.  H.  256. 
'  Morse  on  Banking,  284. 

4  Barnet  v.  Smith,  30  N.  H.  256;  Pope  v.  Bank  of  Albion,  59  Barb. 
226;  Carr  v.  Nat.  Security  Bank,  107  Mass.  48;  Bank  v.  Pettel,  41  111. 
492;  Nelson  v.  First  Nat.  Bank,  48  III.  36.  But  see  Espy  v.  Bank  of 
Cincinnati,  18  Wall.  621,  where  the  court,  through  Miller,  J.,  say  in 
respect  to  a  verbal  certification:  "  There  was  no  design  or  intent  on  the 
part  of  the  bank  to  assume  a  responsibility  beyond  the  funds  of  the 
drawer  in  their  hands,  nor  to  enable  tlie  payee  of  the  clieck  to  put  it  in 
circulation.  Nothing  was  said  or  done  by  the  bank  officer  which  could 
be  transferred  with  the  check  as  a  part  of  it  to  an  innocent  taker  of  it 
from  the  payee,  such  subsequent  taker  would  have  no  right  to  rely  on 
what  was  said  by  the  bank  officers,  any  further  than  the  payee  would. 
But  see  Louisiana  Nat.  Bank  v.  Citizens'  Bank,  28  La.  Ann.  189. 

*  Morse  v.  Mass.  Nat.  Bauk,  1  Holmes,  209.    . 

719 


§    -ioi)  •       CHECKS.  [CH.  XXIII. 

those  officers  can  certify   checks  who  have  the  power  by 
implication,  virtute  officii. 

As  a  matter  of  course,  the  board  of  directors  have  the 
power,  and  they  may  delegate  it  to  other  officers,  for  they 
are  the  governing  body  of  the  corporation.'  The  follow- 
ing officers  have  the  implied  power  to  certify  checks,  but 
not  to  delegate  it  to  others,  viz.  :  The  president,^  the 
cashier, "^  and  the  teller.*  But  it  is  generally  held  that  the 
assistant  cashier  has  not  this  power.  And  if  he  signs 
his  name  with  his  official  title,  "  Asst.  Cashier,"  his  cer- 
tification is  not  binding  on  the  bank,  even  in  the  hands 
of  a  bona  fide  holder.^  Nor  can  any  officer  bind  the  bank 
by  his  certification  of  his  own  check,  and  it  is  void  even  as 
to  a  bona  fide  holder,  when  that  fact  is  known  to  him  or 
appears  on  the  face  of  the  paper.® 

§  439.  What  checks  may  be  certified  and  when.  —  Or- 
dinarily, the  certification  does  not  state  the  time  of  payment, 
and  the  check  is  payable  on  demand  ;  but  it  may  provide  ex- 
pressly for  payment  in  the  future,  and  in  that  case  payment 
cannot  be  demanded  in  advance  of  that  time.^  On  the  other 
hand,  no  officer  has  the  authority  to  certify  checks  before  they 
are  payable ;  and  if  a  check  is  post-dated,  the  bank  is  not  bound 


'  See  ante,  chapter  on  Private  Corporations. 

^  Claflin  v.. Farmers',  etc.,  Bank,  25  N.  Y.  293, 

3  Merchants'  Bank  v.  State  Bank,  10  Wall.  648;  Clarke  Nat.  Bank  w. 
Bank  of  AllDion,  52  Barb.  592;  Pope  v.  Bank  of  Albion,  59  Barb.  226; 
Cooke  V.  State  Nat.  Bank,  52  N.  Y.  115.  But  see  contra  Miissey  v.  Eagle 
Bank,  9  Met.  213;  Atlantic  Bank  v.  Merchants'  Bank,  20  Gray,  532. 

*  Farmers',  etc.,  Bank  r.  Butchers',  etc.,  Bank,  14  N.  Y.  624;  16  N.  Y. 
133;  Mead  v.  Merchants'  Bank,  25  N.  Y.  146;  Irving  Bank  v.  Wetherald, 
36  N.  Y.  335.     Contra  Mussey  v.  Eagle  Bank,  9  Met.  313. 

5  Pope  i;.  Bank  of  Albion,  57  N.  Y.  127. 

*  Claflin  V.  Farmers',  etc.,  Bank,  25  N.  Y.  294,  overruling  a.c.  in  36 
Barb.  540.  See  also  Titus  v.  G.  W.  Turnpike  Co.,  5  Lans.  253;  N.  Y.  & 
M.  H.  R.  R.  Co.  V.  Schuyler,  34  N.  Y.  30,  C4. 

''  Bank  of  England  v.  Anderson,  4  Scott,  50. 
720 


CH.  XXIII.]  CHECKS.  §    -l-iO 

by  the  certificatiou  of  a  check  before  its  date.^  The  ojBicer 
is  not  authorized  to  certifj^  au^^  check,  whose  commercial 
character  has  been  destroyed  by  the  addition  of  unusual 
clauses  or  conditions,  or  which  has  not  been  presented  in 
the  usual  course  of  business.^ 

Finally,  no  officer  is  authorized  to  certify  the  checks  of 
one  who  has  no  funds  on  deposit.  And  such  a  certification 
is  not  binding  on  the  bank,  except  as  against  a  bona  fide 
holder,  without  notice.-^  The  fact  that  the  check  is  pre- 
sented for  certification,  without  indorsement,  and  by  some 
other  person  than  the  payee,  does  not  invalidate  the 
certification,  provided  the  indorsement  is  procured  before 
presentment  for  payment,  or  the  check  has  been  transferred 
by  delivery  to  the  person  presenting  it.  The  bank  would 
in  either  case  be  protected  in  paying  him.* 

§  440.   Xegotiability  and    transfer    of    checks. — Like 

bills  and  notes,  checks  are  negotiable  instruments,  and  are 
transferred  by  indorsement  or  by  delivery.  If  the  check 
is  payable  to  order,  the  only  legal  transfer  is  by  indorse- 
ment.^ 

Where  a  check  is  payable  to  bearer,  indorsement  is  not 
necessary  to  its  legal  transfer.  But  sometimes  the  bank, 
in  honoring  the  check,  requires  the  holder  to  indorse  it,  as 
an  acknowledgment  of  receiving  payment,  and  also  as  a 
memorandum  of  the  person  to  whom    it  was  paid.     It  is 

J  Clarke  Nat.  Bank  v.  Bank  of  Albion,  52  Barb.  593. 

-  Dorsey  v.  Abrams,  85  Pa  St.  299.  As  to  what  is  meant  by  due  course 
of  business,  see  ante,  chapter  on  Rights  of  Bona  Fide  Holders. 

3  Atlantic  Bank  v.  Merchants'  Bank,  10  Gray,  532;  Claflinu.  Farmers' 
etc.,  Bank,  25  N.  Y.  293;  Cooke  v.  State  Nat.  Bank,  52  N.  Y.  115. 

^  Freund  v.  Importers',  etc..  Bank,  76  N.  Y.  352.  See  and  compare 
Abrams  v.  Union  Nat.  Bank,  31  La.  Ann.  61. 

^  Conroy  v.  Warren,  3  Johns.  Cas.  259 ;  Woods  v.  Schroeder,  4  Har. 
&  J.  276;  Keene  v.  Beard,  8  C.  B.  (x.  s.')  380;  Merchants'  Bank  v.  Spicer, 
6  Wend.  445;  Hoyt  v.  Seeley,  18  Conn.  353.  For  a  full  discussion  of  the 
subject  of  Transfer  of  Commercial  Paper  see  previous  chapters. 

4Q  721 


§    441  CHECKS.  [CH.  XXIII. 

claimed  that  in  such  a  case  the  holder  is  not  bound  as  an 
indorse!',  unless  it  be  shown  that  he  signed  his  name  animo 
indorsandi  } 

§441.  Memorandum  checks. — A  peculiar  form  of 
check  has  come  into  use  in  certain  business  communities, 
which  is  known  as  a  memorandum  check.  It  is  described 
to  be  "  a  contract  by  which  the  maker  engages  to  pay  the 
bona  fide  holder  absolutely,  and  not  upon  a  condition  to 
pay  upon  presentation  at  maturity,  and  if  due  notice  of 
the  presentation  and  non-payment  should  be  given.  The 
word  '  memorandum,'  written  or  printed  upon  the  check, 
describes  the  nature  of  the  contract  with  precision."' 
Sometimes  the  bank's  name  is  cancelled;  ^  and  it  is  held 
in  Massachusetts  that  the  cancellation  of  the  bank's  name 
destroys  the  presumption  of  consideration  which  attaches 
to  the  ordinary  check,  and  requires  express  proof  of  value 
to  enable  a  recovery  of  the  drawer.* 

If  the  memorandum  check  is  presented  to  the  ban'ker  for 
payment,  he  has  a  right  to  honor  it;  and  if  he  does,  the 
payment  will  have  the  same  effect  against  the  drawer,  as 
if  it  were  an  ordinary  check.  The  peculiar  character  of 
the  memorandum  check  does  not  affect  the  relations  of 
drawer  and  drawee.^ 

Evidence  of  the  check  being  a  memorandum  check  must 
be  gathered  from  the  check  itself.  It  cannot  be  shown 
by  parol  evidence  that  an  ordinary  check  was  intended  to 
be  a  memorandum  check. ^ 

J  2  Daniel's  Negot.  Inst.,  §  1653;  Morse  on  Banking,  312;  Anco'ne  «. 
Marks,  7  Hurlst.  &  N.  680;  Keene  v.  Beard,  8  C.  B.  (n.  s.)  372. 

^  Franklin  Bank  v.  Freeman,  16  Pick.  535;  Gushing  v.  Gore,  15  Mass. 
69;  Morse  on  Banking,  313;  Dykers  v.  Leather  Bank,  11  Paige,  612. 

3  Ball  V.  Allen,  15  Mass.  433;  Ellis  v.  Wheeler,  3  Pick.  18. 

*  Ball  V.  Allen,  15  Mass.  433;  Ellis  v.  Wheeler,  3  Pick.  18. 

5  Morse  on  Banking,  313. 

^  Kelly  V.  Brown,  4  Gray,  108;  American  Emigrant  Co.  v.  Clark,  47 
Iowa,  672. 
-      722 


CH.  XXIII.]  CHECKS.  §    442 

'§  442.  Presentment,  notice  and   protest  of  checks. — 

Except  in  the  case  of  memorandum  checks,  it  is  as  neces- 
sary, in  order  to  hold  the  drawer  and  indorsers,  to  observe 
the  rules  in  respect  to  presentment  for  payment  and  notice 
of  dishonor,  where  the  instrument  is  a  check,  as  where  it 
is  a  bill  of  exchange  or  a  promissory  note. 

Indeed,  in  consequence  of  the  intention  of  the  parties  to 
the  check  that  payment  should  be  immediate,  and  of  the 
fact  that  the  check  is  drawn  against  a  deposit,  these  rules 
should  be  and  are  more  strictly  enforced,  than  in  the  case 
of  other  commercial  paper. ^ 

This  is  also  the  case  with  respect  to  protest.  Whenever 
protest  is  required,  in  the  case  of  bills  and  notes,  to  hold 
drawers  and  indorsers,  it  is  required  in  the  case  of  checks.^ 

But  there  is  this  difference  between  bills  and  checks  as 
to  the  consequences  of  negligence  or  delay  in  demand  and 
notice.  The  failure  to  make  a  prompt  presentment  on  the 
day  of  maturity,  and  to  give  promptly  the  notice  of  dis- 
honor, in  the  case  of  bills,  will  discharge  the  drawer  and 

1  Merchants'  Bank  v.  State  Bank,  10  Wall.  657;  Hoyt  v.  Seeley,  18 
Conn.  353;  Moody  v.  Mark,  43  Miss.  210;  Linville  v.  Welch,  29  Miss.  203; 
Foster  v.  Paulk,  41  Me.  425;  Pack  v.  Thomas,  13  Sm.  &  M.  11 ;  Purcell  v. 
Allemong,  22  Gratt.  742 ;  Conkling  v.  Gaudall,  1  Keyes,  228 ;  Cruger  v. 
Armstrong,  3  Johns.  79;  Harker  v.  Anderson,  21  Wend.  372;  Franklin  w. 
Vanderpool,  1  Hall,  80;  Conroy  v.  Warren,  3  Johns.  259;  Sherman  v. 
Comstock,  2  McLean,  10;  Humphreys  v.  Bicknell,  2  Litt.  298;  Clark  v. 
Bank,  2  MacArth.  249;  Farwell  v.  Curtis,  7  Biss.  160;  Eichelberger  w. 
Finley,  Harr.  &  J.  381 ;  True  v.  Thomas,  16  Me.  36;  Matter  of  Brown,  2 
Story,  502;  Case  v.  Morris,  31  Pa.  St.  100;  Judd  v.  Smith,  10  N.  Y.  S.*C. 
(3  Hun)  190;  Middletown  Bank  v.  Morris,  28  Barb.  616;  Murray  v. 
Judah,  6  Cow.  484;  Merchants' Bank  v.  Spicer,  6  Wend.  445;  Levy  v. 
Peters,  9  Serg,  &  R.  125;  Edwards  v.  Moses,  2  Nott  &  McC.  433;  Daniel 
r.  Kyle,  5  Ga.  245;  Ford  v.  McClung,  5  W.  Va.  156;  Pollard  v.  Bowen,  57 
Ind.  234. 

-  Harker  v.  Anderson,  21  Wend.  372;  Moses  v.  Franklin  Bank,  34  Md. 
574;  Norris  v.  Despard,  38  Md,  491.  But  see  Morrison  v.  Bailey,  5  Ohio 
St.  13;  Pollard  v.  Bowen,  57  Ind.  234,  where  checks  are  held  not  to  re- 
quire protest,  presumably  referring  to  inland  checks.  See  also  Griflin  v. 
Kemp,  46  Ind.  172;  Jones  v.  Heiliuger,  36  Wis.  149. 

723 


§    442  (HECKS.  [CII     XXIII, 

iiulorsers,  even  though  they  have  not  .suffered  in  any  wise 
by  the  delay  or  neglect.^  .But  in  the  case  of  checks,  the 
drawer  is  not  discharged  by  such  neglect  or  delay,  if  he  has 
not  suffered  any  injury  in  consequence  of  it.'^  If  the  bank 
remains  solvent,  it  does  not  matter  how  long  presentment 
is  delayed,  the  drawer  is  still  bound,  provided  the  statute 
of  limitations  has  not  run  against  the  right  of  action.^ 

If  it  be  shown  by  the  plaintiff  in  an  action  against  the 
drawer  of  the  check,  that  there  has  been  presentment  and 
due  notice,  it  is  incumbent  on  the  drawer  to  prove  loss  in 
consequence  of  any  delay  in  presenting  for  payment.*  And 
so,  also,  where  the  action  is  on  the  pre-existing  debt,  and 
it  is  shown  that  there  has  been  no  presentment  of  the  check 
at  all,  the  burden  of  proving  loss  is  on  the  drawer."  But 
if,  in  an  action  on  the  check,  it  be  shown  that  the  check 
had  not  been  presented  for  payment,  the  burden  is  on  the 
holder  to  show  that  the  drawer  has  not  suffered  any  loss 
from  the  failure  to  make  presentment,  the  presumption  of 


1  See  ante,  36G. 

2  Stewart  z?.  Smith,  17  Ohio  St.  52;  Taylor  v.  Slip,  1  Vroora,  284;  Cou- 
roy  V.  Warren,  3  Johns.  259;  Little  v.  Phoenix  Bank,  2  Hill,  425;  Park  v. 
Thomas,  13  Sm.  &  M  11;  Morrison  v.  Bailey,  5  Ohio  St.  13;  Cork  v. 
Racon,  45  Wis.  192;  Howes  v.  Austin,  35  111.  39G;  Lawrence  v.  Schmidt, 
35  111.440;  Morrison  v.  McCartney,  30  Mo.  183;  Matter  of  Brown,  2 
Story,  502;  Alexander  v.  Burchfield,  7  M.  &  G.  1067;  Keene  v.  Beard,  8 
C.  B.(  N.  s.)  380;  Blair  v.  Hoge  &  Wilson,  28  Gratt,  171;  Purcell  v.  Alle- 
mong,  22  Gratt.  743;  Deaner  v.  Brown,  1  MacArth.  350;  Clark  v.  Nat. 
Metrop.  Bank,  2  MacArth.  249;  Emery 'f.  Ilobson,  63  Me.  32;  Murray  v. 
Judah,  6  Cow.  490;  Mohawk  Bauk  v.  Brodcrick,  10  AVend.  309;  Planters' 
Bank  v.  Kesee,  7  Heisk.  200;  Daniel  v.  Kyle,  1  Kelly,  304;  Cox  v.  Boone, 
8  W.  Va.  500;  Scott  v.  Meeker,  20  Hun,  1G3;  Heartt  v.  Rhodes,  66  III. 
351;  Stevens  v.  Park,  73  111.  387;  Gregg  v.  George,  16  Kan.  546;  Searle 
V.  Norton,  2  M.  &  K.  401;  Robinson  v.  Hawksford,  9  Q.  B.  52;  Griffin  v. 
Kemp,  46  Ind.  172;  Kinyon  v.  Stanton,  44  Wis.  479,  where  the  bank 
failed,  but  the  drawer  had  withdrawn  his  funds. 

'  Emery  v.  Hobson,  63  Me.  32;  Bell  v.  Alexander,  21  Gratt.  6. 
<  Stewart  v.  Smith,  17  Ohio  St.  85,  86. 

5  Syracuse,  etc.,  R.  R.  Co.  v.  Collins,  3  Lans.  29;  s.  c.  57  N.  Y.  641. 
724 


CH.  XXIII,]  CHECKS.  §    443 

law  being  that  there  was  damage. ^  The  rule  is  different 
with  regard  to  the  indorsers  ;  they  are  discharged  whether 
they  have  suffered  any  consequential  damage  or  not  from 
the  failure  to  make  due  presentment  and  give  the  notice  of 
dishonor  within  a  reasonable  time.^ 

§  443.   Within  what  time  must  check  be  presented.  — 

Inasmuch  as  the  failure  of  the  bank  before  presentment  is 
the  principal,  if  not  the  invariable,  occasion  of  loss  from  a 
neglect  or  delay  of  presentment,  almost  any  delay  is  likely 
to  produce  the  loss;  and,  hence,  but  a  limited  time  is  given 
in  which  to  make  presentment,  the  length  of  time  varying 
Avith  the  persons  between  whom  the  question  arises. 

(1)  Firsts  as  between  the  drawer  and  payee:  Where  the 
payee  receives  it  in  the  same  place  in  which  the  bank  is 
situated,  the  payee  has  the  next  day  in  which  to  make  the 
presentment.  And  if  he  delays  presentment  beyond  the 
banking  hours  of  the  next  day,  and  the  bank  fails  in  the 
meantime,   the  loss  will  fall   on  the  holder  of  the  check. ^ 

1  Little  V.  Phoenix  Bauk,  2  Hill,  425;  Harbeck  r.  Craft,  i  Duer,  122; 
Ford  V.  McCluug,  5  W.  Va.  166;  Daniel  v.  Kyle,  1  Kelly,  304.  But  the 
presumption  of  damage  is  rebutted  by  proof  of  the  fact  that  the  drawer 
had  no  f  nnds  on  deposit,  or  had  withdrawn  them.  Eichelberger  v.  Fin- 
lay,  7  Har.  &  J.  381;  Shaffer  v.  Maddox,  9  Neb.  205;  Healy  v.  Oilman, 
1  Bos.  235;  Kinyon  v.  Stanton,  44  Wis,  479. 

2  Merchants'  Bank  v.  Spicer,  6  Wend.  445;  Murray  v.  Judah,  6  Cow. 
490;  Daniel  v.  Kyle,  1  Kelly,  304;  Little  v.  Phoenix  Bank,  2  Hill,  429; 
Humphreys  v.  Bicknell,  2  Litt.  298;  Harbeck  v.  Craft,  4  Duer.  129, 

3  O'Brien  v.  Smith,  1  Black,  99;  Mead  v.  Caswell,  9  Mod,  60;  Cox  v. 
Boone,  8  W.  Va.  500;  Cawein  v.  Browinski,  6  Bush,  457;  Shrieveu.  Duck- 
ham,  1  Litt.  192 ;  Morrison  v.  Bailey,  5  Ohio  St.  13;  Veazie  Bank  v.  Winn, 
40  Me.  60;  Boddingtou  v.  Schlenker,  4  Barn.  &  Aid.  752;  Rickford  v. 
Ridge,  2  Camp,  537;  Syracuse,  etc.,  R.  R.  Co.  v.  Collins,  3  Laus.  29;  57 
N.  Y.  641;  Smith  v.  Miller,  6  Rob.  (N.  Y.)  157;  43  N.  Y,  171;  52  N.  Y. 
546;  Nunnemaker  v.  Lanier,  48  Barb.  234;  Kelty  u.  Bank,  52  Barb.  328; 
Merchants'  Bank  v.  Spicer,  6  Wend,  443;  Bickford  v.  First  Nat,  Bank,  42 
111.  238;  Ritchie  v.  Bradshaw,  5  Cal.  228,  Himmelman  v.  Hataling,  40 
Cal.  Ill;  Simpson  v.  Pac,  etc.,  Ins.  Co.,  44 Cal,  139;  Bailey  u.  Bodenham, 
16  C.  B.  (N.  s.)  288;  Robson  i'.  Bennett,  2  Taunt.  410.     See  Andrews  v. 

725 


§    443  CHECKS.  [Cll.   XXIII. 

The  suspension  of  the  bank  during  the  banking  hours  of 
the  next  day  will  not  impose  the  loss  upon  the  holder,  if 
there  was  still  time  to  make  the  presentment ;  and  such  a 
suspension  would  be  an  excuse  for  not  making  the  present- 
ment afterwards.^  But  if  the  check  was  presented  at  an 
early  hour  of  the  next  day  after  receiving  it,  and  the  pay- 
ment was  tendered,  but  declined  until  a  later  hour;  and  in 
the  meantime  the  bank  should  suspend  payment,  the  loss 
would  fall  upon  the  holder,  and  the  drawer  would  be  dis- 
charored.'^ 

Where  the  payee  receives  the  check  at  a  distance  from 
the  place  where  the  bank  is  situated,  he  has  the  whole  of 
the  day  after  receiving  it,  in  which  to  forward  the  check 
for  presentment  through  an  appropriate  channel,  by  mail 
or  express,  to  the  place  where  the  bank  is  situated.  And 
the  person,  to  whom  it  is  sent  for  presentment,  has  the 
next  day  after  receiving  it  in  which  to  make  the  present- 
ment. And  any  loss  from  a  failure  of  the  bank  during 
the  time  thus  required  for  the  transportation  of  the  check 
would  fall  on  the  drawer.^  If  the  party  who  receives 
the  check  resides  in  the  country  away  from  the  post- 
office,  the  rule  as  to  diligence  in  forwarding  the  check  for 
presentment  is  not  so  strictly  enforced  as  in  other  cases.* 

German  Nat.  Bank,  9  Heisk.  211;  Clark  v.  Nat.  Metrop.  Bank,  2  MacArth. 
249.  But  the  allowance  of  a  day  for  presentment  does  not  extend  to  an 
agent  who  takes  a  check  in  payment  of  a  debt  due  to  his  principal.  He 
must  present  it  immediately.  Smith  v.  Miller,  43  N.  Y.  171;  First  Nat. 
Bank  v.  Fourth  Nat.  Bank,  17  Hun,  332;  Farwell  v.  Curtis,  7  Biss.  165 

1  Syracuse,  etc.,  R.  R.  Co.  v.  Collins,  3  Lans.  29. 

2  Simpson  v.  Pac,  etc..  Insurance  Co.,  44  Cal.  143. 

3  Smith  V.  Jones,  20  Wend.  192;  Hare  v.  Henty,  30  L.  J.  C.  P.  302; 
Bond  V.  Warden,  1  Collyer,  583;  Rickford  v.  Ridge,  2  Camp.  637-;  Mid- 
dletown  Bank  v.  Morris,  28  Barb.  616;  Moule  v.  Brown,  4  Bing.  N.  C. 
266. 

*  Cox  V.  Boone,  8  W.  Va.  500,  where  a  distance  of  four  miles  from 
the  post-office  was  held  to  excuse  the  delay  of  two  days  in  forwarding 
the  check.     But,  perhaps,  it  is  not  a  reliable  case  to  follow. 
726 


CH.  XXIII.]  CHECKS.  §    444 

Secondly,  the  same  rules  apply  to  the  indorsee,  in  his 
relations  with  his  immediate  indorser,  viz. :  he  has  the 
next  day  after  receiving  the  check  in  which  to  present  for 
payment  or  to  forward  for  presentment,  the  indorser  being 
regarded  as  a  new  drawer.^  But  if  more  time  has  elapsed 
between  the  original  negotiation  of  the  check  and  its  final 
presentment  for  payment  by  the  indorsee  than  what  is 
allowed  by  law  to  the  payee,  the  drawer  is  discharged, 
although  the  immediate  indorser  is  still  bound.  The  law 
does  not  permit  any  extension  of  the  risk  of  the  drawer  by 
a  series  of  transfers  by  indorsement  or  by  delivery.  The 
check  is  designed  for  immediate  presentment  and  not  for 
circulation.^ 

§  444.  Whether  check  can  be  presented  by  mail.  —  The 

ordinary  method  of  forwarding  a  check  for  presentment, 
where  it  is  negotiated  at  a  distance  from  the  place  where 
the  bank  is  situated,  is  by  mail  or  express  to  some  third 
person  as  agent,  who  is  charged  with  the  duty  of  present- 
ing it  to  the  bank  for  payment.  But  a  custom  has  grown 
up  of  late,  to  send  the  check  direct  to  the  bank  on  which  it 
is  drawn ;  in  other  words,  to  make  presentment  by  mail. 
The  sufficiency  of  this  method  of  presentment  has  been 
doubted,-^  but  it  seems  that  this  method  is  more  or  less  com- 
monly adopted,  and  the  weight  of  authority  is  in  favor  of 
its  sufficiency.* 

1  Mohawk  Bank  v.  Broderick,  10  Weud.  30-1;  13  Weud.  133. 

2  Down  V.  Hailing,  4  Barn.  &  C.  333;  Foster  v.  Pauik,  41  Me.  425; 
Liiley  v.  Miiier,  3  Nott  &  McC.  257;  Tayior  v.  Young,  3  Watts,  343; 
Cruger  v.  Armstrong,  3  Jolius.  5;  St.  John  v.  Homans,  8  Mo.  382; 
Boelam  v.  Sterling,  7  T.  R.  423;  Reid  v.  Reid,  11  Tex.  585;  Brown  v. 
Lusk,  4  Yerg.  210;  Marker  v.  Anderson,  21  Wend.  372. 

^  Farwell  u.  Curtis,  7 Biss.  162;  Hopkins,  J.,  saying:  "  In  these  days, 
when  such  facilities  are  furnished  by  express  companies  for  presenta- 
tion at  distant  places,  there  is  no  reason  for  adopting  a  less  direct  or 
effective  mode  to  accomplish  the  object." 

*  Indig  V.  National  City  Bank,  80  N.  Y.  101,  Rapallo,  J.,  saying:  "  The 

727 


§    445  CHECKS.  [CH.  XXIII. 

§  445.  Excuses  for  failure  or  delay  in  demand  and 
notice  of  dishonor.  —  It  may  be  stated,  as  a  general  prop- 
osition, that  the  same  excuses  will  suffice  for  failure  to 
present  a  check  for  payment,  and  to  give  notice  of  dis- 
honor, as  in  the  cases  of  commercial  paper  in  general. 
This  subject  has  been  already  fully  discussed,  and  will  not 
be  repeated  here. 

The  most  common  excuse  in  the  case  of  checks  is  that 
the  drawer  has  no  funds  in  bank,  against  which  to  draw. 
It  is  considered  a  fraud  for  one  to  draw  a  check  on  a  bank, 
in  which  he  has  no  funds  ;  and  he  is  liable  to  the  holder  on 
the  check  without  any  notice  of  dishonor.^  Of  the  same 
character  is  the  countermanding  of  the  payment. ^  It  has 
also  been  held  that  a  partial  want  of  funds  is  a  good  excuse 
for  failure  or  delay  in  presentment.^ 

defendant,  instead  of  sending  the  note  to  an  agent  or  correspondent  at 
Louisville,  for  presentation,  sent  it  by  mail  directly  to  the  respondent 
(the  National  City  Bank),  where  it  was  payable.  This  appears  to  be  an 
ordinary  method  of  transacting  such  business,  and  the  defendant  was 
bound  only  to  adopt  the  ordinary  rule."  Bailey  v.  Bodcuham,  IG  C.  B.  J. 
Scott  (X.  s.),  294,  Erie,  C.  J. :  "I  do  not  mean  to  affirm  that  this  was  a 
good  presentment.  I  incline  to  think  it  was.  But  unless  the  money  was 
remitted  by  return  of  post,  the  absence  of  an  answer  should  have  been 
considered  as  a  dishonor,  and  notice  of  dishonor  should  have  been  given 
promptly."  See  also  Heywood  v.  Pickering,  9  L.  R.  Q.  B.  428;  Hare  v. 
Henty,  10  L.  R.  Q.  B.  65;  Rideaus  v.  Griddle,  4  L.  R.  Q.  B.  428;  Shipsey 
V.  Bowery  Nat.  Bank,  59  N.  Y.  485. 

1  Fletcher  v.  Pierson,  69  Ind.  281;  Kinyon  r.  Stanton,  44  Wis.  569; 
Gushing  v.  Gore,  15  Mass.  59;  Norris  v.  Despard,  38  Md.  491;  Conroy  v. 
"Warren,  3  Johns.  259;  Gommercial  Bank  v.  Hughes,  17  Wend.  94;  Healy 
V.  Gilman,  1  Bosw.  235:  Valk  v.  Simmons,  4  Mason,  113;  Lilley  v.  Miller, 
2  Nott  &  McG.  257;  Kerable  v.  Mills,  1  Man.  &  G.  757;  2  Scott  N.  R.  121 ; 
Bell  V.  Alexander,  21  Gratt.  6;  Bush  v.  Barrett,  82  N.  Y.  401;  Hoyt  v. 
Seeley,  18  Conn.  353;  True  v.  Thomas,  16  Me.  36;  Eichelberger  v.  Fin- 
ley,  7  Har.  &  J.  381 ;  Murray  v.  .Judah,  6  Cow.  484;  Franklin  v.  Vander- 
pool,  1  Hall,  78;  Matter  of  Brown,  2  Story,  502;  Blankenship  v.  Rogers, 
10  Ind.  333;  Coyle  v.  Smith,  1  E.  D.  Smith,  300. 

-  Jack  V.  Darrin,  3  E.  D.  Smith,  557 ;  Whaley  v.  Houston,  12  La.  Ann.  585 ; 
Purchase  v.  Mattison,  G  Duer,  587;  Woodin  v.  Frayze,  38  N.  Y.  S.  C.  190. 

"  Eichelberger  v.  Finley,  7  Harr.  &  J.  381,  387 
728 


CH.  XXIII.]  CHECKS.  §    446 

§  446.  When  is  a  check  considered  stale  or  over- 
due.—  A  check  is  considered  stale  or  overdue,  so  as  to  let 
in  equitable  defenses,  whenever  the  delay  in  presentment 
has  been  so  long  that,  in  the  light  of  the  circumstances  of 
the  particular  case,  it  is  sufficient  to  arouse  the  suspicions 
of  a  reasonably  prudent  man.  So  much  may  be  taken  as  a 
reliable  statement  of  the  law,  notwithstanding  it  is  claimed 
by  one  authority^  that  a  check  is  "never  overdue."  But 
it  is  so  general  a  statement  that  something  more  specific  is 
felt  to  be  required.  It  is,  however,  impossible  to  state  the 
precise  period  at  which  a  check  becomes  overdue, ^  the  con- 
clusion in  each  case  being  determined  by  a  consideration  of 
the  special  circumstances  surrounding  the  parties.  Thus, 
in  the  light  of  the  circumstances  of  the  case,  a  check  has 
been  held  to  be  overdue,  when  there  was  a  delay  in  present- 
ment of  two  and  a  half  years ;  ^  one  year ;  *  fourteen 
months;^  five  months;^  five  days.^  On  the  other  hand, 
the  check  was  held  to  be  not  overdue,  and  may  still  be  ne- 
gotiated free  from  equitable  defenses,  where  there  has  been 
a  delay  of  one  month ;  ^  ten  days ;  ^  eight  days ;  ^^  six  days ;  ^^ 
four  days;  '^  one  day.^"^ 

Where  the.  drawer  allows  some  time  to  elapse  after  the 
date  of  the  check  before  it  is   delivered  to  the  payee,  the 

1  Thompson  on  Bills,  118. 

2  Mr.  Daniel  says :  "  The  certain  age  at  which  a  check  may  be  said  to 
be  stale  is  as  uncertain  as  the  fixing  of  the  day  on  which  a  young  lady 
becomes  an  old  maid."     2  Daniel's  Negot.  Inst.,  §  1634. 

3  Skillman  v.  Titus,  32  N.  J.  L.  96. 

*  Lancaster  Bank  v.  Woodward,  18  Pa.  St.  357. 

5  Cowing  V.  Altman,  71  N.  Y.  436. 

6  First  Nat.  Bank  v.  Needham,  29  Iowa,  249. 

'  Down  V.  Hailing,  4  B.  &  C  330;  6  D.  &  R.  445;  2  C.  &  P.  11. 
8  Lester  v.  Given,  8  Bush,  357. 
"  Ames  V.  Merriam,  98  Mass.  294. 
"  London  &  County  Bank  v.  Groome,  L.  R.  8  Q.  B.  D.  288 

11  Rothschild  v.  Corney,  9  B.  &  C.  388. 

12  First  Nat.  Baukw.  Harris,  108  Mass.  514. 

13  Himmelmau  v.  Hotaling,  40  Cal.  111. 

729 


§  ,447  CHECKS.  [CH.  XXIII. 

check  is  not  overdue,  and  the  indorsee  or  bank  takes  it  free 
from  existing  defenses,  since  in  that  case  the  lapse  of  time 
between  the  date  and  the  day  of  presentment  is  caused  by 
the  drawer  instead  of  by  the  payee. ^ 

§  447.  The  right  to  draw  against  deposits  —  How  must 
check  he  executed.  — It  is,  of  course,  a  plain  proposition 
of  hiw  that  only  the  depositor,  or  his  duly  authorized  agent, 
has  the  right  to  draw  against  the  deposit.  And  it  is  safest 
for  the  bank  to  refuse  to  honor  any  check,  whose  signature 
varies  in  any  way  from  the  name  on  its  books. ^  If  the  de- 
posit is  made  by  an  agent  or  trustee,  the  bank  cannot  treat 
it  as  a  private  fund,  and  attach  it  for  the  satisfaction  of  his 
private  indebtedness  to  the  bank.^ 

If  the  deposit  is  made  by  a  partnership,  the  check  must 
be  signed  in  the  firm  name,  and  any  one  of  the  active  part- 
ners may  issue  it.*  It  seems  that  a  bank  may  honor  a 
check,  as  a  firm  check,  to  which  the  names  of  all  the 
partners  are  signed.®  If  the  deposit  is  put  in  the  name  of 
one  partner,  but  it  was  in  fact  partnership  funds,  the  bank 
may  justify  itself  in  honoring  partnership  checks,  when 
drawn  against  this  fund,  by  showing  that  it  was  intended  ta 
constitute  a  fund  for  partnership  purposes.*' 

If  two  firms  unite  in  a  deposit,  forming  a  third  partner- 

1  Cowing  V.  Altraan,  71  N.  Y.  43C,  ovemiliug  5  Hun,  556;  Boehm  v. 
Sterling,  7  T.  R.  423. 

2  Inues  V.  Steplieusou,  1  M.  &  R.  145;  Sloman  v.  Bank  of  England,  14 
Sim.  459;  9  Jur.  243;  Tryon  v.  Okley,  3  G.  Greene  (Iowa),  289;  Stone  v. 
Marsh,  Ryan  &  M.  304;  Dixen's  Case,  2  Lewln  Cr.  Cas.  178. 

3  Central  Nat.  Bank  v.  Conn.  Mut.  Ins.  Co.,  104  U.  S.  (1881)  54; 
Pannell  v.  Hurley,  2  CoUyer,  241.  See  also  Duncan  v.  Jandon,  15  Wall. 
105;  In  re  Gross,  G  Ch.  App.  632;  Bailey  v.  Finch,  L.  R.  7  Q.  B.  34; 
Bundy  v.  Town  of  Monticello,  84  Ind.  (1882)  119. 

<  Cook  V.  Seeley,  2  Exch.  749. 

5  Morton  v.  Seymour,  3  C.  B.  792;  Ex  parte  Buckley,  14  M.  &  W.  4G9, 
overruling  Hall  v.  Smith,  1  Barn.  &  C.  407;  Williamson  v.  Johnson,  1 
Bam.  &  0.  149. 

6  Sims  V.  Bond,  5  Barn.  &  Ad.  389. 

730 


CH.  XXIII.]  CHECKS.  §    447 

ship,  checks  may  be  drawn  against  the  deposit  by  either 
firm.^ 

If  several  persons,  not  partners,  in  their  individual  capac- 
ity, make  a  deposit  to  their  joint  credit,  they  must  all  join 
in  signing  the  check,  unless  the  deposit  is  to  their  joint  and 
several  credit,  when  any  one  may  draw  the  check. ^  If  two 
or  more  trustees  make  a  deposit  of  trust  funds,  it  seems 
that  they  must  all  join  in  drawing  the  checks,^  although  a 
court  of  equity  can  sanction  the  drawing  of  the  checks  by 
any  number  less  than  all  of  them.*  It  is  different  with 
personal  representatives.  Any  one  of  them  may  draw 
checks  against  the  deposits  of  the  decedent's  estate,  without 
being  joined  by  the  rest  of  them.^  Upon  the  death  of  an 
executor,  the  checks  should  be  drawn  by  the  administrator 
de  bonis  non.^ 

In  the  case  of  deposits  of  corporations,  it  is  incumbent 
upon  the  bank  to  ascertain  what  officers  are  authorized  by 
the  charter  or  by-laws  of  the  corporation  to  sign  checks.^ 
If  the  corporation  accepts  the  proceeds  of  checks  issued  by 
an  officer  who  is  not  authorized  to  act  in  that  capacity,  the 
corporation  is  estopped  from  showing  the  officer's  want  of 
authority.^ 

1  Duff  V.  East  India  Co.,  15  Ves.  jr.  198. 

2  Morse  on  Banking,  266.  Wlien  one  of  two  or  more  joint  depositors 
absconds,  equity  will  afford  relief  to  the  others.  Ex  parte  Hunter,  2 
Rose,  382;  Ex  parte  Collins,  2  Cox,  427. 

3  Morse  on  Banliing,  267. 

*  Shortbridge's  Case,  12  Ves.  jr.  28. 

fi  Pond  V.  Underwood,  2  Ld.  Raym,  1210;  Allen  v.  Duudas,  3  T.  R.  125; 
Gaunt  V.  Taylor,  2  Hare,  413;  Can  v.  Read,  3  Atk.  695;  Ex  parte  Rigby» 
19  Ves.  462. 

*  Alleghany  Bank's  Appeal,  48  Pa.  St.  328;  Farmers',  etc..  Bank  v. 
King,  57  Pa.  St.  364. 

'  Fulton  Bank  v.  N.  Y.  &  Sharon  Canal  Co.,  4  Paige,  127;  In  re  Nor- 
wich Town  Co.,  22  Beav.  143;  Serrell  v.  Derbyshire  R.  R.  Co.,  9  C.  B. 
811;  19  L.  J.  C.  P.  377. 

8  Mahoney  Mining  Co.  v.  Angelo  Cal.  Bank, U.  S.  (1882) . 

731 


§    A-i9  CHECKS.  [CH.  XXIII. 

§448.  Wlietber  death  revokes  check. — Although  it 
has  been  held  by  some  of  the  writers  that  a  check  is 
revoked  by  the  death  of  the  drawer/  the  better  opinion  is 
that  the  death  of  the  drawer  does  not  revoke  the  check,  if 
it  has  been  negotiated  for  a  valuable  consideration;  but 
that  it  does  revoke  it  if  it  is  based-upon  a  good  consider- 
ation. Where  the  check  is  supported  by  a  valuable  con- 
sideration, it  may  be  likened  to  a  power  coupled  with  an 
interest.^ 

§  449.  Conditions  which  the  hank  may  exact,  before 
honoring  check.  —  If  the  check  is  payable  to  order,  and 
the  bank  pays  the  money  to  one  who  is  not  an  indorsee, 
and  without  an  indorsement  in  blank,  and  who  is  not  a 
bona  fide  assignee  of  the  check,  the  bank  will  still  be 
responsible  for  paj^nient  to  the  part}'  who  is  entitled  to 
payment.  But  if  the  party  receiving  payment  is  entitled 
to  it  as  assignee,  the  check  will  be  extinguished,  although 
it  is  unindorsed.^  So,  also,  is  it  the  loss  of  the  bank,  if  it 
pays  the  check  on  a  forged  indorsement.*  And  it  is  also 
held  that  the  bank  will  be  liable  if  it  paj'^s  a  check  before 
maturit}^ — i.e.,  before  its  date,  where  it  is  post-dated, — 
to  any  one  but  the  lawful  owner,  although  it  is  payable  to 
bearer,  since  a  check  is  not  payable  before  its  date.''     For 

1  Morse  on  Banking;,  260:  "At  the  instance  of  his  (the  drawer's) 
death,  the  title  to  his  balance  vests  in  his  legal  representatives,  and  his 
own  order  is  no  longer  competent  to  withdraw  any  part  of  that  which  is 
no  longer  his  property."     Chitty  on  Bills,  429;  2  Parsons'  N.  &  B.  82. 

2  Burke  v.  Bishop,  27  La.  Ann.  465  (21  Am.  Rep.  567)  ;  Cutts  v.  Per- 
kins, 12  Mass.  206;  Tate  v.  Hilbert,  2  Ves.  jr.  118;  4  Brown  Ch.  286, 
where  it  was  held  that  the  gift  of  the  donor's  check  was  not  a  valid 
donatio  mortis  causa. 

3  Freund  v.  Importers  &  Traders'  N.  B.,  76  N.  Y.  352. 

4  Risley  .v.  Phoenix  Bank,  18  N.  Y.  S.  C.  (11  Hun)  484;  Dodge  v. 
National  Exchange  Bank,  30  Ohio  St.  1. 

^  "  Payment  of  the  check  by  the  bank  before  it  is  due  will  not  be  a  dis- 
charge unless  made  to  the  real  proprietor  of  it;  and,  therefore,  where  a 

732 


CH.  XXIII.]  .     CHECKS.  §    449 

this  reason,  the  bank  is  entitled  to  a  reasonable  time  in 
which  to  ascertain  whether  the  sio-natures  are  all  senuine.^ 

The  bank  may  also  take  a  reasonable  time  for  ascertain- 
ing whether  there  are  svifficient  funds  on  deposit  to  meet  the 
check.  In  London,  the  bank  has  until  5  p.  m.  of  the  day 
on  which  it  is  presented,  to  ascertain  the  condition  of  the 
drawer's  account. ^  But  it  has  been  held  in  the  United 
States,  that  the  bank  might  return  a  check  at  any  time 
within  twenty-four  hours  after  presentment  if  it  discovers 
a  deficiency  in  the  deposit  against  which  it  is  drawn. ^  But 
this  can  only  be  the  case  where  there  has  been  no  accept- 
ance of  the  check.  Once  the  check  is  accepted,  and  the 
money  paid  out  or  passed  to  the  credit  of  the  checkholder, 
it  cannot  be  recalled  because  the  bank  has  subsequently  dis- 
covered a  want  of  funds.*  But  where  the  check  has  been 
received,  but  neither  the  money  nor  the  credit  was  given  on 
it,  the  check  may  be  returned  on  the  discovery  of  the  want 
of  funds. ^  In  California,  it  is  held  that  if  the  check  of 
another  is  deposited,  and  credit  given  to  the  depositor  on 
his  bank-book,  the  check  is  received  for  collection,  and  if 
not  paid  may  be  returned  and  cancelled.^ 

If  the  bank  has  not  funds   enough  to  pay  the  check  in 

banker,  contrary  to  usage,  paid  the  check  before  it  bore  date,  which  had 
been  lost  by  the  payee,  it  was  held  that  he  was  liable  to  repay  the  amount 
to  the  person  losing.  In  this  case,  although  the  holder  had  the  legal  title 
arising  from  the  possession  of  the  check,  yet  he  was  not  bona  fide  the 
holder,  with  authority  to  collect,  and  as  the  banker  paid  it  out  of  the 
usual  course  of  business,  he  paid  it  at  the  risk  of  being  obliged  to  pay 
it  again,  if  the  party  presenting  it  had  not  just  right  to  receive  it." 
Shaw,  C.  J.,  in  Wheeler  v.  Gould,  20  Pick.  545.  See  also  Bristol  Knife 
Co.  V.  First  Nat.  Bank,  41  Conn.  421. 

1  Robarts  v.  Tucker,  4  Eng  L.  &  Eq.  236. 

2  Morse  on  Banking,  251. 

*  Overman  v.  Hoboken  City  Bank,  31  N.  J.  L.  563. 
^  Pratt  V  Toot,  9  N.  Y.  4C3;  Oddie  v.  National  City  Bank,  45  N,  Y. 
735.     See  Irving  Bank  v.  Wetherald,  3G  N.  Y.  337. 

5  Boyd  V.  Emerson,  2  Ad.  &  El.  184. 

6  Nat.  Gold  Bank  v.  McDonald,  51  Cal.  65. 

733 


s 


§    451  CHECKS.  [cm.   XXIII. 

full,  it  is  not  obliged  to  make  payment  in  part,  certainly 
not,  unless  the  holder  is  willing  to  surrender  the  check  to 
be  held  as  a  voucher  by  the  bank,  nor  is  the  holder  obliged 
to  receive  it.^ 

§  450.  Order  of  payment, — The  bank  is  under  obliga- 
tion to  pay  checks  in  the  order  of  their  presentment,  and 
cannot  distribute  an  insufficient  fund  pro  rata  amongst 
those  who  hold  checks  drawn  against  it,  or  give  the  prefer- 
ence to  the  holder  of  a  check  which  is  presented  at  a  later 
hour.-  It  is  doubtful  what  is  the  duty  of  the  bank  where 
two  or  more  checks  are  presented  simultaneously,  and  the 
fund  drawn  against  is  smaller  than  the  affffregate  amount 
of  the  checks.  It  seems  that  the  bank  is  not  obliged  to 
pay  any  of  the  checks,^  although  it  is  said  that  the  bank 
could  hardly  subject  itself  to  liability  if  it  were  to  pay  the 
check  which  is  tirst  in  date.* 

§  451.  Forgeries  and  alterations. —  The  principles  re- 
lating to  the  forgery  and  alteration  of  checks  differ  but 
little  from  those  which  govern  the  same  subjects  in  applica- 
tion to  commercial  paper  in  general,  and  which  have  been 
already  fully  presented.^  Little,  therefore,  remains  to  be 
said. 

The  bank  is,  however,  under  a  peculiar  obligation  to 
know  the  signatures  of  its  depositors  on  the  checks  drawn 
against  it,  the  obligation  being  stricter  than  that  of   the 


1  2  P:\rsons'  N.  &  B.  78,  79;  Bromley  v.  Commercial  Nat.  Bauk  (Court 
of  Com.  Pleas,  of  Philadelphia),  cited  iu  2  Uauiel's  Negot.  lust.,  §  1(j20, 
from  5  Am.  Law  Times,  219;  Matter  of  Brown,  2  Story,  502;  Murray  v. 
Judah,  6  Cow.  490;  St.  John  v.  Homaus,   8  Mo.  382. 

2  2  Parsons' N.  &  B.  78;  Matter  of  Brown,  2  Story,  502;  Morse  on 
Banking,  248,  249, 

■"  Dykers  v.  Leather  Mfg.  Bank,  II  Paige,  Gil. 
4  2  Parsons'  N .  &  B.  78. 

^  See  ante,  chapter  on  Forgeries  and  Alteratious. 
734 


CH.  XXIII.]  CHECKS.  §    415 

drawee  of  a  bill  of  exchange.^  But  the  bank  cannot  be 
expected  to  have  any  peculiar  knowledge  of  the  genuine- 
ness of  the  contents  of  a  check,  since  a  check  is  very  com- 
monly filled  out  by  a  clerk  in  a  different  handwriting. 
That  fact,  i.e.,  that  the  body  of  the  check  is  in  a  different 
handwriting,  is  in  itself  no  cause  for  suspicion.^  The 
authorities  may,  therefore,  be  expected  to  show  a  variance 
of  the  rules  between  the  effect  of  alterations  in  general, 
and  of  foro-eries  of  the  signature. 

If  a' check  is  altered  in  any  material  part,  the  bank  may 
recover  the  money  improperl}-  paid  on  it  from  the  person 
to  whom  it  is  paid  ;  for  the  holder  of  the  check  guarantees 
the  genuineness  of  its  contents.  And  the  bank  can  recover, 
although  the  check  has  been  certified  to  or  pronounced  to 
be  all  right. ^ 

If  the  drawer  or  his  agent  has  been  negligent  in  filling 
up  the  check,  leaving  blank  spaces,  thereby  enabling  the 
alteration  of  a  check  in  such  a  manner  as  not  to  arouse  the 
suspicions  of  the  bank  or  of  any  holder,  the  drawer  is  him- 
self liable  on  the  check,  as  altered.  But  he  is  not  liable, 
if  he  has  not  been  negligent  in  this  respect.* 

1  Smith  V.  Mercer,  6  Tauut.  7C.  See  People's  Sav.  Bank  y.  Capps,  91 
Pa.  St.  315. 

2  Nat.  Bauk  of  Commerce  v.  Nat.  Mech.  Bank.  Assn.,  55  N.  Y.  213; 
Nat.  Park  Bank  v.  Ninth  Nat.  Bank,  55  Barb.  124;  46  N.  Y.  77;  Bank  of 
Commerce  v.  Union  Bank,  3  Comst.  230;  Redington  v.  Wood,  45  Cal.  406. 

3  Espy  V.  Bank  of  Cincinnati,  18  Wall.  614;  Nat.  Park  Bank  v.  Ninth 
Nat.  Bauk,  55  Barb.  124;  46  N.  Y.  77;  Marine  Nat.  Bank  v.  Nat.  City 
Bauk,  55  N.  Y.  211;  59  N.  Y.  67;  Parker  v.  Roser,  67  Ind.  500;  Third 
Nat.  Bauk  v.  Allen,  59  Mo.  310;  Bank  of  Commerce  v.  Union  Bank,  3 
Comst.  230;  Rediugton  v.  Wood,  45  Cal.  406;  Security  Nat.  Bauk  v.  Nat. 
Bank,  67  N.  Y.  461. 

■*  Young  V.  Grote,  4  Birig.  253;  Bauk  of  Commerce  v.  Union  Bank,  3 
Comst.  230;  Belknap  v.  Nat.  N.  A.,  100  Mass.  379;  Hardy  v.  Chesapeake 
Bauk,  51  Md.  562.  "If  the  bank  pays  money  on  a  forged  check,  no 
matter  under  what  circumstances  of  caution,  or  however  honest  the 
belief  in  its  genuineness,  if  the  depositor  himself  be  free  of  blame,  and 
has  done  nothing  to  mislead  the  bank,  all  the  loss  must  be  borne  by  the 

735 


§    451  CHECKS.  [CH.   XXllI. 

The  bank's  obligation  to  know  the  signature  of  its  de- 
positors is  so  strictly  enforced  by  some  of  the  authorities, 
that  it  is  held  by  them  to  be  impossible  for  the  bank  to 
recover  back  money  paid  on  a  forged  check,  even  though 
the  forgery  is  discovered  in  time  to  save  to  the  check- 
holder  all  of  his  remedies  against  prior  indorsers.^  But 
there  are  other  authorities  which  are  disposed  to  enforce 
the  rule  more  leniently,  holding  that  the  bank  can  recover 
back  the  money  paid  out  on  a  check  with  the  forged  signa- 
ture of  a  depositor,  if  the  forgery  was  so  good  a  counter- 
feit as  to  free  the  bank  of  the  charije  of  neglijjence  in 
taking  it  for  a  genuine  signature ;  provided  the  forgery  is 
discovered  and  the  return  of  the  money  demanded  in  time 
to  enable  the  holder  of  the  check  to  employ  his  remedies 
against  the  bona  fide  parties  to  the  check. ^  Nor  will  the 
bank  be  precluded  from  recovering  the  money  from  a 
holder  who  took  the  check  under  circumstances  likely  to 
arouse  one's  suspicions,  or  who  by  his  words  or  actions 
misled  the  bank  into  the  belief  that  the  check  was  genuine, 
or  induced  it  to  omit  its  usual  precautions  against  frauds  and 
forgeries.-^     So,  also,  can  the  bank  recover  back  the  money 

bank,  for  it  acts  at  its  peril  and  pays  out  its  own  funds,  and  not  those  of 
the  depositor.  It  is  in  vieTV  of  this  relation  of  the  parties,  and  of  their 
rights  and  obligations,  that  the  principle  is  universally  jnaintained  that 
banks  and  bankers  are  bound  to  know  the  signatures  of  their  customers, 
and  that  they  pay  checks  purporting  to  be  drawn  by  them  at  their  peril." 

1  Levy  V.  Bank  of  United  States,  4  Dall.  234 ;  Bank  of  United  States 
V.  Bank  of  Georgia,  10  Wheat.  333;  First  Nat.  Bank  v.  Ricker,  71  111. 
439;  Morse  on  Banking,  29G:  "The  fact  in  this  case  is  one  in  which  the 
drawee  has  no  right  to  mistake.  The  law  refuses  to  hear  him  say  he 
has  mistaken  it.  The  money  is  paid  through  the  failure  to  fulfill  his 
acknowledged  duty,  inasmuch  as  he  has  failed  to  detect  the  very  non- 
existence of  the  merely  supposed  fact  of  signature  by  a  certain  person." 

2  2  Daniel's  Negot.  Inst.,  §  lG55a;  2  Parsons'  N.  &B.  80 ;  Chitty  on  Bills 
(13  Am.  ed.)  [*  431],  485,     See  also  Irving  Bank  v.  Wetherald,  36  N.Y,  335. 

3  Gloucester  Bank  v.  Salem  Bank,  17  Mass.  33,  42;  First  Nat.  Bank  v. 
Ricker,  71  111.  439;  Nat.  Bank  of  N.  A.  v.  Bangs,  106  Mass.  445;  Ellis  v. 
Ohio  Ins.,  etc.,  Co.,  4  Ohio  St.  628. 

73(; 


CH.  XXIII.]  CHECKS.  §    452 

paid  on  a  forged  check,  where  the  check  is  presented  for 
})ayment  by  another  bank,  and  it  is  proven  to  be  custom- 
ary for  the  drawee  bank  to  omit  its  usual  precautions 
against  such  frauds,  in  reliance  upon  the  care  observed  by 
the  presenting  banli.^ 

If  the  money  is  paid  on  a  forged  indorsement,  the  bank 
is  still  liable  to  the  payee  or  indorsee  on  whose  indorsement 
alone  is  the  check  payable.^  But  the  bank  is  not  obliged 
to  know  the  signatures  of  indorsers,  and  if  any  of  them  be 
forged,  the  bank  can  recover  back  the  money  paid  out  on 
the  check. ^ 

§  452.   The   right  of  checkholder  to  sue  the  bank. — - 

It  has  been  explained  elsewhere  *  why  the  holder  of  an 
unaccepted  bill  of  exchange  cannot  sue  the  drawee  for  his 
refusal  to  honor  the  bill.  It  was  there  explained''  that 
there  is  but  one  way  to  establish  privity  between  the  payee 
or  holder  and  the  drawee  of  an  unaccepted  bill,  and  that 
was  on  the  theory  that  the  bill  operated  as  an  assignment 
pro  tanto  of  the  fund  against  which  it  was  drawn.  This 
was  shown  to  be  inapplicable  to  bills  of  exchange,  which 
were  drawn  for  a  part  of  the  fund,^  because  creditors  are 
prohibited  from  splitting  up  a  single  indebtedness  into 
many,  without  the  consent  of  the  debtor  ;  and  even  where 
the  bill  was  drawn  for  the  whole  of  the  fund,  the  further 
objection  was  to  be  met,  that  because  it  was  not  drawn 
against   a   particular   fund,  there    was   not   in   the   bill  a 


1  Ellis  V.  Ohio  Life  Ins.  Co.,  4  Ohio  St.  628. 

2  Johnson  v.  First  Nat.  Bank,  13  N.  Y.  S.  C.  (6  Hun)  126;  Talbot  v. 
Bank  of  Rochester,  1  Hill,  295. 

3  Morgan  v.  Bank,  1  Duer,  434;  1  Kern.  404;  Seventh  Nat.  Bank  t;. 
Cook,  73  Pa.  St.  483;  Dodge  Nat.  Exch.  Bank,  20  Ohio  St.  246;  Canal 
Bank  v.  Bank  of  Albany  ,  1  Hill,  287;  Morse  on  Banking,  308-310.      ' 

*  See  ante,  §§  5-5c. 

*  See  §  5. 

^  See  ante,  §  5a. 

47  737 


§    4:5-2  CHECKS.  [CH.  XXIII. 

i^ufficient  description  of  the  fuud,  to  enable  the  bill  to 
operate  as  an  assignment. ^ 

la  this  place,  we  raise  the  question  whether  a  check- 
holder  can  sue  the  bank,  before  it  has  certified  the  check 
or  agreed  to  pay  it;  or,  in  other  words,  does  the  check 
operate  as  an  assignment  j)^'^  tanto  of  the  fund  or  deposit, 
ao-ainst  %vhich  it  was  drawn.  And  we  ascertain  from  a 
discussion  of  the  same  question,  in  reference  to  unaccepted 
bills  of  exchange,  that  two  things  must  be  shown,  in  order 
to  establish  the  doctrine  that  the  check  operates  as  an 
assio-nment  as  against  the  bank,  on  which  it  is  drawn,  viz. : 
firsts  that  the  bank  or  banker  on  whom  the  check  is  drawn 
had  consented  to  the  drawer's  division  of  his  one  debt,  in 
the  shape  of  a  deposit,  into  as  many  checks  as  the  depositor 
is  pleased  to  draw;  and,  secondly,  that  there  was  a  sufficient 
description  of  the  fund  to  enable  an  identification  of  the 
thing  assigned. 

The  first  proposition  is  very  easily  established.  When 
the  deposit  is  made  at  a  bank,  the  bank  impliedly  promises 
to  honor  any  and  all  checks  which  the  depositor  might 
draw  against  the  deposit,  and  for  any  amount  as  long  as 
the  deposit  has  not  been  exhausted.  And  even  those  cases, 
which  deny  that  the  check  operates  as  an  assignment,  so  as 
to  enable  the  holder  to  sue  the  bank,  admit  that  the  bank 
has  broken  its  contract  with  the  drawer,  in  not  honoring 
the  check,  and  is  liable  in  damages  to  the  drawer  for  this 
breach. 2 


1  See  ante,  §  oc. 

2  Bank  of  the  Republic  w.  Millard,  10  Wall.  152;  Carr  v,  Nat.  Security 
Bank,  107  Mass.  45;  .^tna  Nat.  Bank  v.  Fourth  Nat.  Bank,  4G  N.  Y.  82; 
Tyler  v.  Gould,  48  N.  Y.  682;  Van  Alen  v.  Am.  Nat.  Bank,  52  N.  Y.  4; 
Duncan  v.  Berlin,  60  N.  Y.  151;  Nat.  Bank  v.  Second  Nat.  Bank,  G9  Ind. 
579;  Essex  Bank  v.  Bank  of  Montreal,  7  Biss,  193;  Moses  v.  Franklin 
Bank,  34  Md.  580;  Bellany  r.  Majoribanks,  8E.  L.  &  Eq.  523;  Chapman  r. 
White,  2  Seld.  412;  Planters'  Bank  v.  Merrit,  7  Heisk.  117;  Planters' 
Bank  r.  Kesse,  7  Heisk.  200;  Bullard  v.  Randall,  1  Gray,  605;  Purcell  v. 

738 


CH.  XXIII.]  CHECKS.  §    452 

The  bank,  therefore,  has  consented  to  the  drawing  of  the 
checks  in  any  amount ;  and  since  the  checks  are  to  be  made 
payable  to  whomsoever  the  drawer  selects,  it  is  not  a  wide 
stretch  of  legal  principles  to  claim  that  if  the  check  can 
operate  as  an  assignment  j^ro  taiito  of  the  deposit,  as  to  any 
person  or  for  any  purpose,  this  obligation  to  honor  the 
check  will  pass  to  the  checkholder  as  an  incident  of  the  as- 
signment. The  drawer's  interest  in  the  deposit  is  a  diose 
in  action  against  the  bank,  coupled  with  the  right  to  divide 
it  up  into  as  many  chosss  in  action  as  may  suit  him  best, 
that  interest  pro  tanto  would  be  passed  into  the  hands  of 
the  checkholder,  and  invest  him  with  the  right  of  action 
against  the  bank  to  enforce  payment,  if  there  are  funds  in 
its  possession  and  under  its  control,  at  the  time  of  present- 
ment and  demand.  An  indorsement  on  the  check  by  the 
payee,  to  pay  to  the  order  of  another,  works  an  assignment 
of  the  payee's  interest  in  the  check.  If  such  an  indorse- 
ment assigns  the  indorser's  interest  in  the  check,  what  rea- 
sons can  be  urged  why  the  check  does  not  assign  the  drawer's 
interest  pro  tanto  in  the  deposit  to  the  payee?  When  a 
depositor  draws  a  check  on  the  bank  it  is  evidently  his  in- 
tention to  transfer  to  the  checkholder  his  interest  in  the  de- 
posit to  the  amount  of  the  check.  The  words  which  are 
generally  employed  "  pay  to  the  order  of,"  "  pay  to  the 
bearer,"  are  sufficient  to  manifest  that  intention.  More- 
over, it  is  unquestionably  the  general  understanding  of  the 
business  world  that  such  is  the  effect  of  a  check,  whatever 


Allemong,  22  Gratt.  742;  Case  u.  Henderson,  23  La.  Ann.  49,  overruling 
Van  Bibber  v.  La.  Bank,  14  La.  Ann.  481;  Kosenthal  v.  Martin  Bank,  U. 
S.  C.  C.  (1879),  34  Am,  Rep.  238;  Dickinson  v.  Coates,  79  Mo.  250; 
Merchants'  Nat.  Bank  v.  Coates,  79  Mo.  258  (overruling  Seuter  v. 
Continental  Bank,  7  Mo.  App.  532;  McGrade  v.  German  Sav.  Inst., 
4  Mo.  App.  330;  Zelle  v.  German  Sav.  Inst.,  4  Mo.  App.  401);  Mayerw. 
Chattahoochie  Nat.  Bank,  51  Ga.  325;  Harrison  v.  Wright,  100  Ind.  515; 
First  Nat.  Bank  v.  Gish,  72  Pa.  St.  13;  Atty.-Geu.  v.  Continental  L.  Ins. 
Co.,  71  N  Y.  380;  Simmons  v.  Cincinnati  Sav.  Soc,  31  Ohio  St.  457. 

739 


§    452  CHECKS.  [CH.  XXIII. 

opinion  may  prevail  in  respect  to  the  right  of  the  holder  to 
sue  the  bank. 

The  most  serious  objection  which  has  been  raised  to  the 
assignment  theory,  is  that  to  constitute  an  equitable  assign- 
ment of  money,  by  means  of  an  order,  the  order  must  di- 
rect the  payment  out  of  a  particular  fund  and  not  generally 
out  of  any  to  be  received. ^  In  equity  an  assignment  will 
be  valid  whenever  the  thing  assigned  is  so  described  as  that 
it  can  be  identified.  It  matters  not  whether  it  be  in  exist- 
ence at  the  time  of  assignment,  or  it  is  only  a  future  possi- 
bility or  expectancy. 2  So,  w^iether  the  funds  drawn 
against  be  in  possession  of  the  bank  at  the  time  that  the 
check  is  issued,  or  they  are  to  be  received  subsequently,  the 
fact  that  the  check  is  drawn  against  a  particular  bank  or 
or  banker,  w^ould  seem  to  be  a  sufficient  particularization 
of  the  fund,  in  order  to  work  an  equitable  assignment  pro 
tanto  of  the  fund  on  deposit.  It  is  probably  rare  that 
there  is  a  more  particular  description  of  the  fund  in  a  gen- 
eral assignment  for  the  benefit  of  creditors ;  and  yet  no  one 
would  question  the  right  of  such  an  assignee  to  draw  out  the 
money,  so  far  as  the  bank  is  concerned. 

1  In  Loyd  et  al.  v.  McCafErey,  46  Pa.  St,  410,  Strong,  J.,  said:  "It 
cannot  be  maintained  tliat  Taylor's  clieck,  without  more,  amounted  to  an 
equitable  appropriation  of  the  funds  in  the  hands  of  the  banker  to  wliom 
it  was  addressed.  To  make  an  order  or  draft  an  equitable  assignment 
it  must  designate  the  fund  upon  which  it  is  drawn."  See  to  the  same 
effect  Phillips  v.  Stagg,  2  Edw.  Ch.  108;  Harrison  v.  Williamson,  2  Edw. 
Ch.  430;  Chapman  v.  White,  6  N.  Y.  412. 

2  "  To  make  an  assignment  valid  at  law,  the  thing  which  is  the  sub- 
ject of  it  must  have  actual  or  potential  existence  at  the  time  of  the  grant 
or  assignment.  But  courts  of  equity  will  support  assignments,  not  only 
of  choses  in  action  and  of  contingent  interests  and  expectancies,  but  also 
of  things  which  have  no  actual  or  potential  existence,  and  rest  in  mere 
possibility;-  not  indeed  as  a  present  positive  transfer,  operative  in 
prcesenti,  for  that  can  only  be  a  thing  in  esse,  but  as  a  present  contract  to 
take  effect  and  attach  as  soon  as  the  thing  comes  in  esse.''^  Story's  Eq. 
Jur.,  §  1040. 

740 


CH.  XXIII.]  CHECKS.  §    452 

The  liability  of  the  bank  is,  of  course,  restricted  only  to 
such  cases  where  the  check  has  not  been  countermanded. 
The  agreement  of  the  bank  or  banker,  which  forms  a  part 
of  the  contract  of  deposit,  and  which  is  claimed  to  pass 
with  the  check  to  the  checkholder,  is  to  pay  the  check,  if 
there  are  sufficient  funds  in  its  possession  and  under  its 
control  at  the  time  of  presentment  and  demand.  For  this 
reason,  the  bank  cannot  be  compelled  to  pay  when  payment 
has  been  countermanded  by;  the  drawer  before  presentment 
of  the  check  by  the  holder;  because  countermanding  is, 
so  far  as  the  bank  is  concerned,  equivalent  to  another  dis- 
position of  the  money,  which,  having  taken  place  before 
presentment,  takes  precedence;  and  whether  the  check- 
holder  still  has  any  interest  in  the  fund  depends  upon  the 
question  whether  the  check  works  an  assignment  as 
against  the  drawer.  This  is  but  the  natural  consequence 
of  the  leading  proposition.  If  the  check  works  an  assign- 
ment in  respect  to  the  drawee,  it  must  have  the  same  effect 
against  the  drawer  and  his  privies. ^  The  holder  of  the 
check,  therefore,  can  claim  the  right  to  appropriate  the 
funds,  even  against  other  creditors  and  a  general  assignee 
for  the  benefit  of  creditors;  for  creditors  and  general 
assignees  can  only  claim  what  belongs  to  the  debtor.  It 
being,  however,  an  equitable  assignment,  and  the  thing 
assigned  being  identified  simply  as  the  indebtedness  of  the 
drawee  to  the  drawer,  it  can  only  be  enforced  while  the 
fund  remains  in  a  condition  to  be  identified.  Should  the 
fund  be  innocently  (^.e.,  as  to  the  drawee)  paid  over  to 
the  drawer  or  to  his  assigns,  it  loses  its  identity,  unless  the 
identical  sum  can  be  traced  and  discovered  in  the  hands  of 

^  This  is  conceded  in  very  many  cases  -which  deny  that  the  check- 
holder  cannot  sue  the  bank.  See  Bank  of  Republic  v.  Millard,  10  Wall. 
152;  Robinson  v.  Hawkes,  9  Q.  B.  52;  Bell  v.  Alexander,  21  Gratt.  6; 
German  Sav.  Inst.  v.  Adae,  8  Fed.  Rep.  lOG;  Matter  of  Brown,  2  Story, 
502;  Morrison  v.  Bailey,  5  Ohio  St.  13. 

741 


§    453  CHECKS.  [CH.  XXIII. 

the  drawer  or  assignee,  and  the  check  is  consequently  de- 
prived of  its  value  as  an  assignment.^ 

Whether  the  check  is  such  a  complete  assignment  of  the 
drawer's  interest  as  that,  after  presentment,  where  the 
check  had  been  previously  countermanded,  the  drawee  pays 
the  money  to  the  drawer  at  his  peril,  has  never  been 
determined  by  any  adjudication.  It  is  settled  that  he  can 
refuse  to  honor  the  check,  but  does  the  countermand  relieve 
him  of  all  obligation  to  the  holder;  or  does  it  place  him  in 
the  position  of  a  stakeholder,  and  compel  him  to  retain  the 
fund  for  the  benefit  of  whichever  of  the  two  shows  himself 
entitled  thereto?  It  would  be  hard  to  expect  a  bank  in 
every  case  of  countermanded  checks  to  hold  the  funds,  and 
become  a  party  to  suits  on  the  same.  It  is  likely  that  this 
position  would  not  be  assumed  even  by  those  courts  which 
are  inclined  to  push  the  assignment  theory  to  the  utmost  limit. 

The  cases  which  deny  the  right  of  the  checkholder  to 
sue  the  bank^  are  by  far  more  numerous  than  those  which 
recco-nize  his  right. ^  And,  although  it  is  not  difficult  to 
demonstrate  that  the  ruling  of  the  minority  of  the  courts 
is  more  rational  and  more  consistent  with  the  general 
principles  of  the  law,  in  order  to  secure  the  much  desired 
uniformity  of  rules  throughout  the  United  States,  in  re- 
spect to  commercial  law,  it  may  be  best  for  the  minority 
to  yield  to  the  majority,  on  the  ground  that  communis 
error  facit  jus. 

§  453.  Right  of  bank  to  offset  amount  due  by  check- 
holder.  —  The   bank  has  no  right  to  offset  to  the  check- 

1  See  Row  v.  Dawson,  1  Ves.  sr.  331 ;  Cowperthwaite  v.  Sheffield,  3 
Comst.  243. 

2  See  note  2,  p.  738. 

3  Fogarties  v.  State  Bank,  12  Rich.  L.  518;  Chicago  Marine,  etc.,  Ins. 
Co.  V.  Stanford,  28  111.  168;  Brown  v.  Leckie,  43  111.  500;  Munn  v.  Biirch, 
25  111.  35;  Union  Nat.  Bank  v.  Oceana  Co.  Bank,  80  111.  212;  Roberts, 
t?.  Austin,  26  Iowa,  316;  Lester  v.  Given,  8  Bush,  358. 

742 


I 


CH.  XXIII.]  CHECKS.  §    455* 

holder's  claim  of  payment  any  amount  that  the  checkholder 
might  owe  the  bank,  the  liability  of  the  drawer  and  other 
parties  to  the  check  being  conditional  upon  the  payment 
of  the  amount  of  the  check  to  the  lawful  holder.^ 

§  454.  Overcliecks.  — It  has  been  frequently  said  to  be 
a  fraud  on  the  bank  for  a  depositor  to  overdraw  his  account 
with  the  bank,  since  the  bank  is  inclined  to  repose  confi- 
dence in  its  depositors  and  to  honor  their  checks  without 
examining  the  condition  of  their  accounts.^  But  whether 
it  be  a  fraud  or  not,  it  is  certain  that  the  depositor  has  no 
right,  without  special  authority  from  the  bank,  to  overdraw 
his  account.  Nor  has  any  bank  officer  the  right  to  honor 
an  overcheck,  without  an  express  authority  from  the  bank.^ 
But  the  bank  has  the  right,  through  its  board  of  directors, 
to  authorize  an  overdraw.*  An  overdraw  is  in  the  nature 
of  a  loan  from  the  bank  to  the  drawer. 

§  455.  Actual  and  presumptive  riglits  and  liabilities  of 
the  drawer  of  a  check.  —  A  check  is  no  evidence  of  the 
liability  of  the  drawer,  until  it  is  shown  that  it  has  beea 
presented  for  payment  and  dishonored.  But  when  this  is 
shown  the  drawer  may  be  held  liable  on  the  check,  without 
direct  proof  of  consideration.^  The  law  presumes  that  the 
check  was  given  in  satisfaction  of  some  debt  due  by  the 
drawer ;  and  in  order  to  hold  the  payee  liable  on  it  for  a 
loan,  it  must  be  shown   affirmatively  that  the   check  was 

1  Brown  v.  Leckle,  43  111.  501. 

2  See  cases  cited  In  §  445.  See  also  True  u.  Thomas,  16  Me.  36j 
Morse  on  Banking,  318. 

3  Martin  v.  Morgan,  Gow.  123;  1  B.  &  B.  289;  3  Moore,  635, 

*  Ballard  v.  Fuller,  32  Barb.  68;  Mahouey  Mining  Co.  v.  Anglo-Cal. 
Bank,  104  U.  S.  (1882)  192. 

*  Fleming  v.  McClain,  13  Pa.  St.  177;  Pearce  v.  Davis,  1  Moo.  &  R.  365  i 
Hoytv.  Seeley,  18  Conn.  357;  Mauran  v.  Lamb,  7  Cow.  176;  Conroy  v, 
Warren,  3  Johns.  259. 

743 


§    455  CHECKS.  [cii.  will. 

civcu  as  a  loan.^  The  check,  in  that  case,  is  itself  evidence 
of  the  amount  of  the  loau,'^ 

In  the  hands  of  the  drawer,  the  check  is  presumptively 
a  receipt  for  money  paid  to  the  payee,  where  the  check  is 
payable  to  order,  without  further  proof  of  payment  to  the 
payee  or  his  order.  But  if  the  check  is  payable  to  bearer, 
it  is  only  evidence  of  the  fact  that  money  has  been  paid 
out  by  the  bank  on  the  check,  and  charged  to  the  account 
of  the  drawer;  and  in  order  to  make  it  evidence  of  the 
receipt  of  money  by  the  payee  it  must  be  shown  affirma- 
tively that  the  money  was  paid  to  the  person  who  is  alleged 
to  have  received  payment  by  the  check. ^ 

But  the  check  is  never  evidence  of  the  payment  of  any 
particular  account,  without  proof  of  the  special  considera- 
tion.* 

In  the  hands  of  the  bank  the  check  is  presumptive  evi- 
dence of  the  facts,  that  the  bank  held  funds  of  the  drawer 
on  deposit,  and  that  it  had  paid  out  of  them  the  amount  of 
the  check  to  the  holder.     To  import  a  loan,  it  must  be 

1  Gary,  Esr.,  i;.  Gerish,  4  Esp.  9;  Huntziuger  v.  Joues,  GO  Pa,  St. 
170;  Fatten  v.  Ash,  7  Serg.  &  R.  IIG;  Hcadley  v.  Keed,  2  Cal.  322;  Yatos 
V.  Shepherdsou,  39  Wis.  173;  Couuelly  v.  McKcau,  G4  Pa.  St.  118;  Terry 
V.  Ragsdale,  33  Gratt.  348;  Graham  v.  Cox,  2  C.  &  K.  702;  Thompson  v. 
Pitmau,  Post.  &  F.  N.  P.  339;  2  Parsons'  N.  &  B.  84.  But  there  is  no  pre- 
sumption that  the  check  was  a  gift;  it  is  always  presumed  to  be  a  loan 
(Baker  V.  Williamson,  4  Pa.  St.  45G;  Huutzinger  i'.  Jones,  60  Pa.  St  170), 
unless,  possibly,  when  the  drawer  and  payee  are  nearly  related. 

2  Healy  v.  Gilman,  1  Bosw.  285. 

3  Checks  payable  to  order,  see  Egg  v.  Barnctt,  3  Esp.  19G;  Connelly  v. 
McKean,  G4  Pa.  St.  113;  Thompson  v.  Pitmau,  1  Post.  &  F,  N.  P.  339. 
Checks  jmyable  to  bearer,  People  v.  Baker,  20  Wend.  602;  Mountford  v. 
Harper,  IG  M.  &  W.  825;  Lloyd  v.  Sandilauds^  Gow.  13;  Patten  v.  Ash, 
7  Serg.  &  R.  116;  People  v.  Howell,  4  Johns.  29G;  Pearce  v.  Davis,  1 
Mood.  &  R.  365.  If  the  check  is  payable  to  one,  without  words  of  nego- 
tiability, it  seems  that  it  is  not  evidence  that  the  payee  received  the 
money,  unless  his  indorsement  is  on  the  check,  Fleming  v.  McClain,  13 
Pa.  St.  177;  although  it  is  doubtful  wliether  the  bank  can  require  in- 
dorsement of  a  check  not  payable  to  order.     2  Parsons'  N.  &  B.  83. 

*  Aubert  v.  Walsh,  4  Taunt.  293. 
744 


CH.  XXIII.]  CHECKS.  §    456 

proven  that  the  drawer  had  nothing  to  his  credit  to  draw 
against.^ 

As  soon  as  the  account  of  tlie  depositor  has  been  debited 
with  the  cancelled  checks  drawn  by  hiiu  against  his  de- 
posit and  balanced,  he  is  entitled  by  the  custom  of  the 
banks  to  the  return  of  the  checks,  to  be  kept  by  him  as 
vouchers  of  payments  in  liquidation  of  his  own  debts. 
But  until  the  account  has  been  balanced,  and  the  debits 
passed  upon  and  approvetl  by  the  depositor,  the  bank  is 
entitled  to  the  cancelled  checks  as  evidence  of  its  payments 
on  account  of  the  depositor. ^ 

§  456.  Payment  by  checks.  — Where  a  check  is  trans- 
ferred in  settlement  of  a  debt,  the  implication  of  law  is  that 
it  is  not  to  constitute  an  absolute  discharge  of  the  debt, 
until  the  check  is  presented  by  the  creditor  and  paid  or  cer- 
tified on  such  presentment.^  And  so  strong  is  this  implica- 
tion, that  the  holder  of  a  bill  or  note  is  not  obliged  to  give 
up  the  bill  or  note,  until  the  check,  which  he  receives  in 
payment,  has  been  paid.* 

1  Conway  v.  Case,  22  111.  127;  Fletcher??.  Manning,  12  M.  &  W.  571; 
Thurmau  v.  Van  Brunt,  19  Barb.  409;  Lancaster  Bank  v.  Woodward,  18 
Pa.  St.  361;  Healy  v.  Gilman,  1  Bosw.  235;  Morse  on  Banking,  290,  291. 

2  Matter  of  Brown,  2  Story,  512;  Burton  v.  Payne,2C.&P.  520;  Morse 
on  Banking,  291;  Regina  v.  Watts,  2  Den.  C.  C.  14.  In  the  case  of  an 
overdraw,  it  must  b3  made  good  before  tlie  depositor  is  entitled  to  the 
canceled  check.     2  Daniel's  Negot.  Inst.,  §  1649;  Morse  on  Banking,  293. 

3  Peoples.  Baker,  20  Wend.  602;  Ocean  Tow  Boat  Co.  v.  Ship  Ophelia, 
11  La.  Ann.  28;  Phillips  v,  Bullard,  58  Ga.  256;  Tapley  v.  Marstens,  8  T. 
R.  451;  Blair  &  Hoge  v.  Wilson,  28  Gratt.  165;  Cnrrie  v.  Misa,  L.  R.  10 
Exch.  153;  Small  r.  Franklin  Mining  Co.,  99  Mass.  277;  Bradford  v.  Fox, 
38  N.  Y.  289 ;  Smith  v.  Miller,  43  N.  Y.  151 ;  52  N.  Y.  546 ;  Davison  u.  City 
Bank,  57  N.  Y.  82;  Sweet  v.  Titus,  11  N.  Y.  S.  C.  (4  Hun)  639;  Everett  v. 
Collins,  2  Camp.  515;  Hearth  v.  Rhodes,  66  111.  351. 

*  Barnett  v.  Smith,  30,N.  H.  256;  Moore  v.  Barthrop,  1  B.  &  C.  5; 
Ward  V.  Evans,  12  Mod.  521;  Taylor  v.  Williams,  11  Met.  44;  Peo- 
ple V.  Baker,  20  Wend.  602;  Hansard  v.  Robinson,  7  B.  &  C.  90;  Pearcew. 
Davis,  1  Mood  &  R.  365.     A  check  is  said  to  be  paid,  when  it  has  been  re- 

745 


§    45()  CHECKS.  [CII.  XXIII. 

Although  it  was  once  held  to  be  the  custom  in  London 
for  agents,  who  receive  commercial  paper  for  collection,  to 
deliver  up  the  paper  on  receipt  of  the  obligor's  check,  and 
that  the  agent  could  do  this  without  assuming  any  responsi- 
bility for  loss  in  consequence  of  the  dishonor  of  the 
check;  ^  it  is  now  the  rule  of  law,  both  in  England  and  in 
the  United  States,  that  agents  act  at  their  peril  if  they  part 
with  the  commercial  paper  sent  to  them  for  collection  on 
the  receipt  of  the  obligor's  check,  or  at  any  time  before 
they  have  received  payment  in  the  legal  tender  of  the 
country.^  And  the  same  rule  applies,  although  the  check 
had  been  certified  before  its  delivery  to  the  payee  or  holder; 
the  certification  only  having  the  effect  in  that  case  of  in- 
creasing its  currency  by  adding  the  liability  of  the  bank  to 
that  of  the  drawer.' 


ceived  by  the  baak  and  the  amount  of  it  is  passed  to  the  credit  of  the 
payee  or  holder.     Nat.  Gold  Bank  v.  McDonald,  51  Cal.  64. 

1  Russell  V.  Haskey,  6  T.  R.  12. 

2  Chitty  on  Bills  (13th  Am.  ed.)  [*3G9],415;  Turner  w.  Bank  of  Fox 
Lake,  3  Keyes,  425;  Rothbun  v.  Citizens'  Steamboat  Co.,  76  N.  Y.  376; 
Smith  V.  Miller,  43  N.  Y.  171;  52  N.  Y.  546;  Whitney  v.  Essen,  99  Mass. 
110. 

3  Bickford  v.  First  Nat.  Bank,  42  111.  238;  Rounds  v.  Smith,  42  111. 
245 ;  Brown  v.  Leckie,  43  111.  497. 

746 


CHAPTER  XXIY. 

UNITED   STATES  TREASURY  NOTES,    BILLS   OF  CREDIT,  AND 

BANK  NOTES. 

Section  460.  Paper  money  or  currency. 

461.  United  States  ti'easury  notes. 

462.  United  States  silver  and  gold  certificates. 

463.  Bills  of  credit. 

464.  Bank  notes  — Post-notes. 

465.  When  bank  notes  are  overdue  —  Statute  of  limitations. 

466.  Liability  of  transferrer  of  bank  notes. 

467.  Lost  or  destroyed  bank  notes. 

468.  National  bank  notes. 

§  460.  Paper  money  or  currency.  —  The  demands  of 
commerce  have  extended  beyond  the  requirement  of  gold 
and  silver  coin,  and  ordinary  commercial  paper,  viz.  :  bills 
of  exchange,  promissory  notes  and  checks;  and  something 
is  demanded  which  is  more  easily  transported  than  coin, 
and  yet  has  to  a  greater  degree  than  ordinary  commercial 
paper  the  characteristics  of  money.  This  want  is  supplied 
by  the  use  of  government  and  bank  promissory  notes,  pay- 
able on  demand,  and  so  constructed  as  to  be  capable  of 
almost  indefinite  circulation.  All  species  of  paper  money 
or  currency  are  negotiable,  and  are  transferred  by  delivery. 
We  will  now  explain  the  several  kinds  of  this  class  of 
paper,  which  are  now  found  in  use. 

§  461.  United  States  treasury  notes.  —  The  highest  and 
the  most  important  kind  of  paper  money  in  this  country  is 
the  United  States  treasury  note.  It  differs  very  little  in  form 
from  the  ordinary  promissory  note,  payable  on  demand,  ex- 
cept in  respect  to  the  texture  of  the  paper  on  which  it  ia 

747 


§    4(J2  UNITED    STATES    TKEASURY    NOTE.s.       [CII.  XXIV. 

printed.  A  veiy  fiiie  paper  of  peculiar  texture  is  used  in 
order  to  render  counterfeiting  much  more  difficult ;  and  this 
is  found  to  be  the  case  with  all  kinds  of  paper  money  or  cur- 
rency. 

The  treasury  note  differs  from  other  kinds  of  paper 
money,  in  the  fact  that  it  is  made  by  statute  legal  tender 
for  all  public  and  private  debts.  The  power  of  the  United 
States,  to  give  to  its  treasury  notes  the  character  of  legal 
tender,  has  been  very  seriously  questioned,  and  in  Hepburn 
V.  Griswold  ^  the  Supreme  Court  of  the  United  States 
pronounced  the  acts  of  Congress  of  1862-3,  which  made 
these  notes  legal  tender  unconstitutional,  because  it  in- 
volved the  exercise  of  a  power,  which  was  not  granted  by 
the  Constitution  to  the  United  States  government.  This 
decision  was  overruled  by  the  same  court  in  the  Legal 
Tender  Cases'-  on  the  ground  that  the  power  to  make 
treasury  notes  legal  tender  may  be  implied  from  the  powers 
to  borrow  money  and  to  carry  on  war.  The  acts  of  '62-63 
were  declared  to  be  constitutional  as  a  war  measure. 
Finally  Congress  passed  another  act,  in  1878,  giving  to 
the  treasury  notes  the  character  of  legal  tender,  independ- 
ently of  the  exigencies  of  war,  and  the  Supreme  Court  of 
the  United  States  declared  the  act  to  be  constitutional.^ 

§  462.  United  States  silver  and  gold  certificates.  — An- 
other species  of  government  obligation  which  circulates  as 
money,  is  the  United  States  silver  or  gold  certificate.  The 
paper   certifies    *'that   there    have   been  deposited   in  the 

treasury  of  the  United  States silver  (gold)  dollars, 

payable  to  bearer  on  demand."     The  certificate  has  every 

1  8  Wall.  603. 

2  12  Wall.  457. 

(3  Juillard  v.  Greenmau,  110  U.  S.  421.    For  a  full  discussion  of  the 
constitutionality  of  the  law  makiua;  the  United   States   treasury  notes 
legal  tender,  see  Tiedeman's  Limitations  of  Police  Power,  §  00. 
748 


CH.  XXIV.]  BILLS    OF    CREDIT.  §    464 

Other  quality  of  currenc\%  except  that  is  payable  in  a 
particular  kind  of  coin,  gold  or  silver,  and  it  is  not  legal 
tender. 

§  463.  Bills  of  credit.  —  Bills  of  credit  is  the  name 
used  in  the  Constitution  of  the  United  States  to  describe 
all  kinds  of  government  obligations  which  are  intended  to 
circulate  as  money,  whether  they  are  legal  tender  or  not, 
and  also  whether  they  bear  interest  or  not.^  The  tenth 
section  of  the  first  article  of  the  Constitution  provided 
that  no  State  shall  "  emit  bills  of  credit."  But  it  is  held 
that  this  provision  does  not  prevent  the  States  from  au- 
thorizing banking  corporations  to  issue  bills  of  credit,  and 
this  power  has  been  frequently  exercised. ^  Of  course, 
bonds  issued  by  the  State  are  not  considered  to  be  bills  of 
credit.^ 

.  §  464.  Bank-notes  — Post-notes.  —  These  are  the  prom- 
issory notes  of  an  incorporated  bank,  which  are  intended 
to  circulate  as  money.  Bank-notes  and  bank-bills  are 
synonymous  terms.'*  Bank-bills  differ  so  little  from  an  or- 
dinary promissory  note,  that  in  an  indictment  for  the  for- 
gery of  one,  it  may  be  described  as  a  promissory  note.^ 

1  Craig  V.  State  of  Missouri,  4  Pet.  411;  City  Nat.  Bank  v.  Malian,  21 
La.  Ann.  753.  But  it  lias  been  held  tliat  tlie  government's  guaranty  of 
tlie  notes  of  a  bank,  of  wliich  tlie  State  is  the  principal  stockholder,  is 
not  a  bill  of  credit  in  the  constitutional  meaning  of  the  terra,  even  if  a 
fund  has  been  appropriated  to  their  redemption.  Darrington  v.  Ala- 
bama, 13  How.  16. 

-  Briscoe  v.  Fauk  of  Kentucky,  11  Pet.  328;  Woodrufe  v.  Trapnall,  10 
How.  203;  Darrington  v.  Alabama,  13  How.  15-17;  Owen  v.  Branch 
Bank,  3  Ala.  258;  Curran  v.  Arkansas,  15  How.  304. 

3  McCoy  V.  Washington  Co.,  3  Wall.  jr.  389.  And  they  do  not  be- 
come bills  of  credit,  because  they  are  made  receivable  for  dues.  See 
Antoni  v.  Wright,  22  Gratt.  833;  Wise  v.  Rogers,  and  Maury  v.  Rogei's, 
24  Gratt.  169. 

*  Eastman  ».  Commonwealth,  4  Gray,  416. 

*  Commonwealth  v.  Thomas,  10  Gray,  483;  Commonwealth  v.  Simouds, 
14  Gray,  59. 

749 


§    464  BANK    NOTES.  [CH.  XXIV. 

They  are  payable  to  bearer  and  on  demand.  If  they  are 
made  payable  at  some  future  time  they  are  called  Post- 
Notes.  The  bank,  which  is  authorized  to  issue  bank-bills, 
can  include  post-notes  in  the  issue. ^  The  post-note  does 
not  differ  at  all  from  bank-notes  in  respect  to  the  rules 
which  govern  their  construction. ^ 

The  rules  which  require  demand  and  notice,  in  the  case 
of  negotiable  promissory  notes,  do  not  apply  to  them  ;  ^ 
although  it  seems  that  the  post-notes  are  payable  with  days 
of  grace.* 

Bank-bills  are  nsually  required  to  be  signed  by  the  presi- 
dent and  cashier.  But,  of  course,  the  charter  or  by-laws  of 
the  bank  may  require  the  signatures  of  other  officers. 

Bank-notes  are  not  legal  tender ;  but  if  they  are  not  ob- 
jected to,  they  may  be  tendered  in  payment  of  debts,  and 
the  tender  will  have  the  same  effect  as  would  the  tender  of 
lawful  money.  But  the  creditor  may  refuse  to  receive  bank- 
bills  ;  and  in  that  case  the  debtor  must  tender  payment  in 
coin  or  treasury  notes,  even  when  the  bank  itself  is  the 
creditor.^  But  it  is  sometimes  provided  by  statute  that 
bank-notes  are  receivable  for  all  dues  to  the  bank  which 
issues  them.^     Bank-bills  are  so  far  considered  money,  that 

1  Carnpbell  v.  Miss.  Union  Bank,  6  How.  (Miss.)  625. 

2  Fulton  Bank  v.  Phcenix  Bank,  1  Hall,  562. 

3  Key  V.  Knott,  9  Gill  &  J.  342. 

*  Staples  V.  Franklin  Bank,  1  Met.  43;  Perkins  v.  Franklin  Bank,  21 
Pick.  483;  Sturdy  v.  Henderson,  4  B.  &  Aid.  592. 

5  Thomas  v.  Todd,  6  Hill,  340;  Codmau  v.  Lubbock,  5  Dowl.  &  R.  289; 
Hallowell,  etc.,  Bank  v.  Howard,  13  Mass.  235;  Suffolk  Bank  v.  Lincoln 
Bank,  3  Mason,  1;  Wright  v.  Reed,  3T.  R.  554;  Owenson  v.  Morse,  7  T. 
R.  64;  Jefferson  Co.  Bank  w.  Chapman,  19  Johns.  322;  Armsworth  v. 
Scotten,  29  Ind.  495;  Coxe  v.  State  Bank,  3  Halst.  172.  See  Morrill  v. 
Brown,  15  Pick.  173;  Edmunds  v.  Digges,  1  Gratt.  359;  Bayard  v.  Shunk, 
1  Watts  &  S.  92;  Bradley  v.  Hunt,  5  Gill  &  J.  58;  Pierson  v.  Wallace,  2 
Eng.  (Ark.)  282;  Bullard  v.  Bell,  1  Mason,  243;  United  States  Bank  v. 
Bank  of  Georgia,  10  Wheat.  333. 

«  Niagara  Bank  v.  Roosevelt,  9  Cow.  409;  Dunlap  v.  Smith,  12  lU. 
750 


CH.  XXIV.]  BANK    NOTES.  §    464 

they  will  pass  by  will  under  the  bequest  of  money  or  cash.^ 
And  where  the  statute  authorizes  the  taking  of  money  in 
execution,  bank-bills  may  also  be  levied  upon.^ 

Bank-notes  are,  like  all  other  species  of  commercial 
paper,  negotiable, "^  and  the  bona  fide  holder  can  compel 
payment  to  him,  although  they  are  proven  to  have  been  stolen 
from  the  rightful  owner.  The  mere  possession  of  the  note 
is  prima  facie  evidence  of  bona  fide  ownership,  and  the 
presumption  is  so  strong  that  it  cannot  be  overturned  by 
showing  that  the  holder  was  guilty  of  negligence  in  taking 
the  note  without  inquiry.*  In  the  case  of  ordinary  bills 
and  notes,  the  proof  of  the  fact  that  the  paper  had  been 
stolen  or  obtained  by  fraud,  shifted  the  burden  of  proof  to 
the  holder,  who  was  then  required  to  show  affirmatively, 
that  the  paper  was  obtained  in  good  faith  and  in  the  usual 
course  of  business.^  And  the  same  rule  seems  to  be  applied 
in  Eug-land  to  bank-notes.®  But  in  the  United  States,  in 
consequence  of  the  rapid  circulation  of  bank-notes  as 
money,  and  the  great  obstruction  to  their  circulation  it 
would  be  to  require  the  holder  to  prove  affirmatively  that 
he  had  received  every  bank-note  in  his  possession  in  good 
faith  and  for  value,  the  courts  have  discarded  the  general 
rule,  and  maintain  that  the  burden  of  proof  is  always  on 
the  other  party  to  show  want  of  good  faith. ^ 


399;  Exchange  Bank  v.  Knox,  19  Gratt.  746;    Moise  v.  Chapman,  24  Ga. 
249;  Union  Bank  v.  Ellicott,  6  Gill  &  J.  363. 

1  Stuart  V.  Bute,  11  Ves.  662;  Miller  v.  Race,  1  Burr.  457. 

2  Morrill  v.  Brown,  15  Pick.  173 ;  Wildes  v.  Nahant  Bank,  20  Pick.  352; 
Spencer  v.  Blaisdell,  4  N.  H.  198;  Lovejoy  v.  Lee,  35  Vt.  430. 

3  Miller  v.  Race,  1  Burr.  452. 

•*  Solomons  v.  Bank  of  England,  13  East,  135;  Lowndes  v.  Anderson, 
18  East,  130;  Raphael  v.  Bank  of  England,  17  C.  B.  161;  33  Eng.  L.  & 
Eq.  276;  City  Bank  v.  Farmers'  Bank,  Taney  C.  C.  119. 

5  See  oMte,  §  303. 

«  De  la  Chaumette  v.  Bank  of  England,  9  B.  &  C.  208.  See  also 
Solomons  v.  Bank  of  England,  13  East,  135. 

■  Worcester  Co.  Bank  v.  Dorchester,  etc.,  Bank,  10  Cush.  488;  Wyer 

751 


§    46(5  BANK    NOTES.  [CII.  XXIV. 

But  in  order  that  the  holder  can  claim  to  be  a  bona  fide 
holder,  he  must  have  taken  the  notes  in  the  usual  course  of 
business.  He  cannot  claim  to  be  a  bona  fide  holder,  if  the 
notes  are  pledged  to  him  as  security  for  a  debt,  with  the 
agreement  that  they  are  not  to  be  put  into  circulation.^ 

§  465.  When  bank-notes  are  overdue — Statute  of 
limitations.  —  Inasmuch  as  bank-notes  are  intended  for 
indefinite  circulation,  at  no  time  can  they  be  really  called 
stale  or  overdue,  as  is  the  case  with  other  commercial 
paper,  payable  on  demand.^  And  they  are  not  overdue, 
because  they  have  been  presented  to  the  bank  and  paid  and 
afterwards  re-issued.^  But  if  they  have  been  presented 
and  protested  for  non-payment,  it  has  been  held  that  any 
one  acquiring  them  afterwards  will  take  them  subject  to 
the  equitable  defenses,  whether  he  knew  of  the  dishonor 
or  not.* 

The  statute  of  limitation  cannot  run  against  the  bank- 
note, as  long  as  it  is  in  circulation.  But,  it  is  held  that,  as 
soon  as  it  ceases  to  circulate  as  currency,  the  statute  does 
begin  to  run  against  the  right  of  action  on  it.^ 

§466.  Liability  of  transferrer  of  bank-notes. — Al- 
though bank-notes  may  be  transferred  by  indorsement,^  it 
is  not  usual  or  necessary  to  do  so,  the  transfer  by  delivery 
beino-   customary   and  all-sufficient.     But  notwithstanding 

V.  Dorchester,  etc.,  Bank,  11  Cush.  51 ;  Louisiana  Bank  v.  Bank  of  United 
States,  9  Mart.  (La.)  398.  See  also  Olmstead  u.  Wiustead  Bank,  32  Conn. 
278;  New  Hope,  etc.,  Bridge  Co.  v.  Perry,  11  111.  467. 

1  Davenport  v.  City  Bank,  9  Paige,  12. 

2  Bullard  v.  Bell,  1  Mason,  243;  Solomons  v.  Bank  of  England,  13 
East,  136. 

8  2  Parsons'  N.  &  B.  95. 

<  Burroughs  v.  Bank  of  Charlotte,  70  N.  C.  284. 

5  Kirabro  t;.  Bank  of  Fultou,  49  Ga.  418;  2  Parsons'  N.  &  B.  95; 
Morse  on  Banking,  402. 

6  Corbett  »;.  Bank  of  Smyrna,  2  Harr.  (Del.)  235. 

752 


CH.  XXIV.]         UNITED    STATES    TREASUKY    NOTES.  §    4(56 

there  is  no  indorsement,  the  transferrer,  nevertheless,  war- 
rants that  the  note  is  genuine  and  not  a  counterfeit;  and  if 
it  proves  to  be  a  counterfeit,  the  loss  falls  on  the  trans- 
ferrer, and  the  debt,  in  payment  of  which  the  note  was 
transferred,  remains  unsatisfied.^  But  the  party  who  re- 
ceives counterfeit  bank-notes  loses  his  remedy  against  the 
transferrer,  if  he  does  not  give  notice  of  its  counterfeit 
character  within  a  reasonable  time  after  receiving  the  note. 
What  is  a  reasonable  time  depends  upon  the  circumstances 
of  each  particular  case :  '^  in  the  light  of  the  surrounding  cir- 
cumstances, the  delay  in  the  giving  notice  has  been  held  to 
be  unreasonable  when  it  was  six  months,^  four  months,* 
forty  days,^  and  fifteen  days.^ 

The  transferrer  will,  of  course,  be  bound  by  any  express 
warranty  of  the  solvency  of  the  bank  which  issued  the 
note.^  But  the  authorities  are  divided  on  the  question 
whether  there  is  on  the  part  of  the  transferrer  any  implied 
warranty  of  the  solvency  of  the  bank.  Some  of  the  cases 
hold  that  there  is  an  implied  warranty  of  solvency  for  the 
reason  that  by  transfer  of  bank-notes  the  transferrer  im- 
ports that  they  have  the  value  represented  on  the  face ;  and 

1  Ramsdale  v.  Hortou,  3  Pa.  St.  330;  Markle  v.  Hatfield,  2  Johns. 
455;  Edmund  u.  Digges,  1  Gratt.  359;  Joues  v.  Ryde,  5  Taunt.  488; 
Pindall  v.  N.  W.  Bank,  7  Leigh,  617;  Youug  u.  Adams,  6  Mass.  182; 
Mudd  V.  Reeves,  2  Harr.  &  J.  368;  Eagle  Bank  v.  Smith,  5  Conu.  71.  It 
seems  that  the  person,  who  innocently  pays  to  or  deposits  with  a  bank 
counterfeits  of  its  own  notes,  will  not  be  liable  to  the  bank  for  the  same, 
on  the  ground  that  a  bank  ought  to  be  able  to  detect  counterfeits  of  its 
own  notes.     United  States  Bank  v.  Bank  of  Georgia,  10  Wheat.  333. 

2  Simras  v.  Clark,  11  111.  137. 

3  Raymond  v.  Barr,  13  Serg.  &  R.  318. 

4  Pindall  v.  N.  W.  Bank,  7  Leigh,  617. 

5  Thomas  v.  Todd,  6  Hill,  340. 

^  Gloucester  Bank  v.  Salem  Bank,  17  Mass.  44. 

'  Commonwealth  v.  Stone,  4  Met.  43;  Gilman  v.  Peck,  11  Vt.  516; 
"Wainwright  v.  Weber,  11  Vt.  576;  Corbet  v.  Bank  of  Smyrna,  2  Harr. 
(Del.)  235;  Aldrich  v.  Jackson,  5  R.  I.  218;  Frontier  Bank  v.  Morse,  22 
Me.  88. 

48  753 


§    4t!7  UNITED    STATES    TREASURY    NOTFiS.        [CH.   XXIV. 

they  ui'c  uot  of  that  value,  if  the  bank  is  then  insolvent.* 
On  the  other  hand,  the  implied  warranty  of  solvency  is 
denied  by  other  authorities,  on  the  ground  that  the  bank- 
note is  transferred  always  on  its  own  intrinsic  value,  and 
the  transferee  takes  the  risk  of  any  depreciation  in  value 
on  account  of  the  insolvency  of  the  bank.^  But  the  au- 
thorities are  agreed  that  the  transferrer  is  liable,  if  he 
transfers  the  bill  of  an  insolvent  bank,  when  he  knows 
that  the  bank  is  insolvent. "^ 

If  the  transferrer  does  warrant  the  solvency  of  the 
bank,  in  order  that  he  may  be  held  bound  on  his  warranty, 
the  transferee  must  either  put  the  note  in  circulation,  or 
present  it  to  the  bank  for  payment,  and  notify  the  trans- 
ferrer of  the  insolvency  of  the  bank,  within  a  reasonable 
time.* 

§  467.  Lost  or  destroyed  bauk-uotes.  —  If  the  whole 
note  is  lost,  the  loser  nmst  bear  the  loss,  unless  he  can 
recover   the  note,  for  the   reason  that  the   bank  will  be 

J  Houghton  V.  Adams,  18  Barb.  545;  Fogg  w.  Lawyer,  9  N.  H.  365; 
Oweusou  V.  Morse,  7  T.  R.  G4;  Beechiug  v.  Gower,  Holt.  N.  P.  313; 
Thomas  v.  Todd,  G  Hill,  340;  Ward  v.  Evaus,  12  Mod.  521 ;  Cauridge  v. 
Allenby,  G  B.  &  C.  373;  Frontier  Bauk  v.  Morse,  22  Me.  88;  Lightbody 
V.  Ontario  Bauk,  11  Wend.  9;  13  Wend.  101 ;  Williams  v.  Smith,  2  Bam. 
&  Aid.  496;  Timmins  v.  Gibbous,  18  Q.  B.  722;  Rogers  v.  Laugford,  1 
C.  &  M.  637;  Harley  v.  Thornton,  2  Hill  (S.  C),  509;  Turner  v.  Stones, 
1  Dow.  &  L.  122;  Gilman  v.  Peck,  fl  Vt.  516;  Westfall  v.  Braley,  10 
Ohio  St.  188;  Townsends  v.  Bank  of  Racine,  7  Wis.  185;  Williams  v. 
Smith,  2  Barn.  &  Aid.  496. 

2  Bayard  v.  Shunk,  1  Watts  &  S.  92;  Lowery  v.  Murrell,  2  Port. 
(Ala.)  28G;  Ware  v.  Head,  3  Head,  G09;  Edmund  v.  Digges,  1  Gratt. 
359;  Corbet  v.  Bauk  of  Smyrna,  2  Harr.  (Del.)  235;  Scruggs  v.  Gass,  8 
Yerg.  175. 

3  Penn  v.  Harrison,  3  T.  R.  759;  Cauridge  v.  Allenby,  6  B.  &  C.  373; 
9  Dow.  &R.  391. 

*  Canridge  v.  Allenby,  6  B.  &  C.  373;  G  Dow.  &  R.  39;  Owenson  v. 
Morse,  7  T.  R.  64;  Ward  v.  Evans,  12  Mod.  521;  Williams  v.  Smith,  2 
Barn.  &  Aid.  496;  Timmins  v.  Gibbons,  18  Q.  B.  722;  Rogers  v.  Lang- 
forcl,  1  Crorap.  &  M.  G37;  Turner  v.  Stones,  1  Dow.  &  L.  122. 
754 


CH.  XXIV.]       UNITEr    STATES    TREASURY    NOTES.  §    467 

bound  to  pay  it  to  any  bona  fide  holder.^  If  the  note  is 
completel}'"  destroyed,  the  owner  may  recover  of  the  bank 
by  proving  the  destruction  of  certain  specific  notes,  and 
giving  the  bank  a  bond  of  indemnity  against  any  future 
presentment  of  them  for  payment.^ 

Wlien  a  part  of  the  note  has  been  lost  or  destroyed,  the 
holder  can  recover  the  value  of  the  whole  note  from  the 
bank,  upon  proof  of  the  facts.  Some  of  the  authorities 
maintain  that,  in  these  cases,  a  bond  of  indemnity  may  be 
required.^  But  the  other  authorities  maintain  what  appears 
to  be  the  better  doctrine,  that  no  bond  of  indemnity  can 
be  required,  on  the  ground  that  "  the  payor  will  never  be 
liable  again,  since  the  holder  takes  the  missing  half  with 
notice  of  prior  equities."  *  The  holder  does  not  recover 
on  the  half  note ;  he  must  show  that  he  lost  the  other  half. 
And  the  note  must  be  so  specifically  described  that  the 
other  half  may  be  readily  identified.^ 

It  was  a  somewhat  common  practice  for  one,  in  transmit- 
ting a  bank-note  by  mail,  to  cut  it  in  two,  and  send  the 
two  halves  in  separate  letters,  or  by  different  mails.®     And 

1  Hinsdale  v.  Bauk  of  Orange,  6  Wend.  378.  But  see  contra  Waters 
V.  Bank  of  Georgia,  Charlt.  193;  Robinson  v.  Bank  of  Darren,  18  Ga. 
65. 

2  Tower  V.  Appletou,  3  Allen,  387;  Carey  v.  Green,  7  Ga.  79.  The 
bond  of  iudeiunity  may  be  required  even  if  the  destruction  of  the  notes 
is  clearly  established,  the  bauk  not  being  in  a  position  to  discover  the 
falsity  of  the  testimony,  if  it  be  false.  Wade  v.  N.  O.  Canal,  etc.,  Co., 
8  Rob.  (La.)  U2;  Morse  ou  Banking,  410.  See  Welton  v.  Adams,  4  Cal. 
38,  where  the  same  rule  was  applied  to  a  certificate  of  deposit.  But  see 
contra  Bank  of  Mobile  v.  Meagher,  33  Ala.  622. 

3  Commercial  Bank  v.  Benedict,  18  B.  Mon.  311;  Bank  of  Va.  v.  Ward, 
6  Muuf.  169;  Farmers'  Bank  v.  Reynolds,  4  Rand.  186;  Story  on  Bills, 
^  448;   Mayor  v.  Johnson,  2  Camp.  325. 

4  2  Parsons'  N.  &  B.  313;  Union  Bank  v.  Warren,  4  Sueed,  171;  Pat- 
ten V.  State  Bank,  2  Nott  &  McC.  464;  Bullet  v.  Bauk  of  Pa.,  2  Wash. 
C.  C.  172;  Martin  v.  Bank  of  U.  S.,  4  Wash.  C.  C.  253;  Bank  of  U.  S. 
V.  Sill,  5  Conn.  112. 

5  2  Parsons'  N.  &  B.  313;   Bauk  of  Va.  v.  Ward,  0  Muuf.  IGG. 

6  Williams  v.  Smith,  2  B.  &  Aid.  496;   Redmayne  v.  Burton,  9  C.  B. 

755 


§    4()8  UXITKO    STATKS    THEASLRY    NOTES.        [Cll.  XXIV. 

it  is  held  that  tlio  bank  lias  not  the  right  to  refuse  to  pay 
notes  that  have  been  cut  into  parts. ^  The  courts  of  equity 
have  jurisdiction  in  such  cases,  although  there  may  be  an 
action  at  hiw.'-* 

§  468.  National  bauk-uotes.  —  The  national  bank-note 
has  superseded  the  State  bank-note  as  a  circulating  cur- 
rency, although  the  power  of  the  States  to  authorize 
banks,  chartered  under  State  laws,  to  issue  bank-notes  for 
general  circulation,  has  not  been  taken  away  or  abridged. 
The  national  bank-note  differs  from  the  State  bank-note  in 
the  security  provided  against  loss  from  the  failures  of  the 
banks.  The  notes  are  secured  by  the  deposit  of  United 
States  bonds  with  the  government  at  Washington,  and, 
based  upon  this  security,  the  United  States  government 
guarantees  the  payment  of  every  national  bank-note.  The 
financial  standing  of  the  national  bank-note  thus  differs 
in  nothing  from  the  United  States  treasury  note,  except 
that  the  latter  is  a  legal  tender  and  the  former  is  not. 

(n.  s.)  519;  Commercial  Bank  v.  Benedict,  18  B.  Mon.  307;  2  Parsons' 
N.  &-B.  314;  Chitty  on  Bills  [*  259],  294. 

1  United  States  Bank  v.  Sill,  5  Conn.  106;  Martin  v.  Bank  of  United 
States,  4  Wash.  C.  C.  253;  2  Parsons'  N.  &  B.  314. 

2  Allen  V.  State  Bank,  1  Dev.  &  Bat.  Eq.  3. 

756 


CHAPTER     XXV. 

COUPON  BONDS. 

Section  471.  Deflni'tion  and  nature  of  coupon  bonds. 

472.  Who  may  execute  coupon  bonds. 

473.  Negotiability  of  coupon  bonds  —  Rights  of  the  holder  of 

the  same. 

474.  To  whom  payable — Transfer  by  indorsement  or  delivery. 

475.  The  formal  parts  of  bond  and  coupon — Seal  not  neces- 

sary. 

476.  Presentment  of  coupons  for  payment. 

477.  Interest  and  excliange  on  bond  and  coupon. 

478.  Actions  on  bonds  and  coupons. 

479.  When  consideration  paid  to  corporation  for  invalid  «bond 

may  be  recovered. 

480.  "When  municipal  corporation  has  power  to  issue  negoti- 

able coupon  bonds. 

481.  For  what  objects  may  municipal  corporations  be  empow- 

ered to  issue  bonds. 

482.  What  defenses  may  be  set  up  against  bona  fide  holders  of 

municipal  bonds. 

§471.   Definition   and   nature    of   coupon  bonds. — A 

coupon  bond  is  a  primary  obligation,  in  the  nature  of  a 
promissory  note,  promising  to  pay  a  sum  of  money  on  a 
day  certain  in  the  future,  to  which  are  attached  certain 
other  obligations  called  coupons, ^  which  call  for  the  pay- 
ment of  the  installments  of  interest  on  the  principal  debt, 
as  they  fall  due ;  each  coupon  representing  an  installment  of 
interest,  and  payable  when  the  installment  of  interest  falls 
due.  The  coupon  may  be  severed  from  the  bond  at  or  be- 
fore its  maturity,  and  when  severed  may  and  does  pass  as  a 

1  They  are  called  coupons  from  the  French  verb,  couper,  to  cut,  be- 
cause they  are  so  attached  that  they  may  be  cut  off,  whenever  they  fall 
due.     2  Daniel's  Negot.  Inst.,  §  1489. 

757 


§    471  COUPON    BONDS.  [CH.   XXV. 

separate  and  independent  security.^  It  matters  very  little 
what  the  form  of  the  coupon  is,  it  i)ractically  amounts  to 
nothing  more  than  a  promissory  note,  essentially  differing 
from  the  ordinary  promissory  note  only  in  being  payable 
without  grace. ^  Sometimes  the  coupon  is  in  the  form  of  a 
draft  or  order  on  a  bank;  but  in  that  case  it  differs  from  a 
bill  of  exchange  in  that  it  need  not  be  presented  for  accept- 
ance.^ 

Notwithstanding  the  possibility  of  the  severance  of  the 
coupon  from  the  bond,  the  relation  between  the  two  is  so 
intimate  that  the  power  to  issue  the  coupons  is  implied 
from  the  legislative  authority  to  issue  bonds. ^  And  the 
mortgage  which  is  given  to  secure  the  payment  of  the  bond 
will  cover  each  and  every  coupon,  whether  attached  or  de- 
tached, together  with  interest  on  the  coupon.^ 

1  Clark  V.  Iowa  City,  20  Wall.  584;  Thompson  v.  Lee  County,  3  Wall. 
327;  City  v.  Lamson,  9  Wall.  477;  Clarke  v.  Janesville,  10  Wis.  13(;; 
Rose  w.  City  of  Bridgeport,  17  Conn.  243;  Railway  u.  Cleneay,  13  Ind. 
161 ;  Coraraonwealth  v.  Industrial  Assn.,  98  Mass.  12;  Spooner  v.  Holmes, 
102  Mass.  503;  Arcnts  v.  Commouwealtli,  18  Gratt.  776;  Coinrs.  of  Ku(is 
Co.  V.  Aspinwall,  21  How.  539;  Town  v.  Culver,  19  Wall.  84;  Beaver 
County  V.  Armstrong,  44  Pa.  St.  63;  Maddox  v.  Graham,  2  Mete.  (Ky.) 
56;  Brainard  v.  N.  Y.  &  H.  R.  R.  Co.,  25  N.  Y.  496;  Evertsen  v.  Nat. 
Bank  of  Newport,  11  N.  Y.  S.  C.  (4  Hun)  694;  Langston  v.  S.  C.  R  R. 
Co.,  2  S.  C.  249;  Nat,  Ex.  Bank  v.  Hartford  R.  R.  Co.,  8  R.  I.  375. 

2  2  Daniel's  Negot.  Inst.,§  1490a;  Areutsv.  Commonwealth,  18  Gratt. 
773.  But  it  has  been  held  lately  in  New  York  that  coupons  are  entitled 
to  days  of  grace.  Eversten  v.  Nat.  Bank  of  Newport,  66  N.  Y.  22.  See 
Cooper  V.  Town  of  Thompson,  13  Blatchf.  434. 

3  Va.  &  Tenn.  R.  R.  Co.  v.  Clay,  cited  from  MSS.  Special  Court  of 
Appeals  of  Va.  in  2  Daniel's  Negot.  Inst.,  §  1489. 

^  Arents  v.  Commonwealth,  18  Gratt.  773. 

s  Beaver  County  v.  Armstrong,  44  Pa.  St.  63 ;  Union  Trust  Co.  w. 
Monticello,  etc.,  R.  R.  Co.,  63  N.  Y.  314;  Miller  v.  Rutland,  etc.,  R.  R., 
4  Vt.  399;  Gibert  v.  W.  C.  V.  M.,  etc.,  R.  R.  Co.,  33  Gratt.  599 ;  Haven  v. 
Grand  Junction  R.  R.  Co.,  109  Mass.  88.  The  mortgage  proceeds  of  sale 
in  case  of  insufficiency  are  distributed  pro  rata  according  to  the  face 
value,  among  all  the  holders  of  the  bonds  and  coupons,  covered  by  the 
mortgage.  Stanton  v.  A.  &  C.  R.  R.  Co.,  2  Woods  C.  C.  523;  Ketchum  v. 
Duncan,  96  U.  S.  671;  Peunock  v.  Coe,  23  How.  130;  In  re  Regent's 
758 


CH.  XXV.]  COUPON    BONDS.  §    472 

§  472.  Who  may  execute  coupon  bonds.  —  The  coujion 
bonds  have  become  a  very  common  commercial  security, 
and  they  are  issued  very  generally  by  the  Federal  and 
State  governments,!  by  municipal  and  other  public  cor- 
porations ;  2  by  the  territorial  governments,  and  the  munici- 
pal and  other  public  corporations  of  the  same;  ^  and  by  all 
sorts  of  private  corporations,  such  as  railroads,  canal  com- 
panies, and  the  like.* 

As  a  general  rule,  the  coupon  bonds  are  issued  by  cor- 
porations, both  public  and  private,  but  not  by  individuals; 
and  if  any  doubt  exists  as  to  the  power  of  an  individual  to 
execute  a  negotiable  coupon  bond,  it  is  caused  by  the  facts 
that  the  coupon  bond  is  sealed,  and  that  according  to  the 
law  merchant  the  commercial  paper  of  an  individual  could 
not  be  sealed  and  yet  retain  its  negotiable  character.^  In 
the  case  of  the  coupon  bond,  this  rule  of  the  law  merchant 
was  disregarded,  because  of  the  necessity  or  propriety  of 
the  use  of  the  seal  in  executing  the  obligations  of  a  corpo- 
ration. But  it  has  been  held  that  the  individual,  as  well 
as  the  corporation,  may  execute  negotiable  coupon  bonds.^ 

Canal  Iron  Works  Co.,  3  Ch.  Div.  43;  Hodge's  Appeal,  84  Pa.  St.  359. 
But  the  coupons  cannot  share  with  the  bona  fide  bond  holders,  where 
they  have  been  taken  up  and  paid  by  certain  persons,  who  advanced  the 
money  for  that  purpose  to  the  corporation  which  issued  the  bonds. 
Union  Trust  Co.  w.Monticello  &  P.  J.  R.  E.  Co.,  63  N.  Y.  311.  See  Har- 
beck  V.  Vanderbilt,  20  N.  Y.  398;  Miller  w.  Rutland,  etc.,  R.  R.  Co.,  40  Vt. 
399;  Haven  v.  Grand  Junction  R.  R.  Co.,  109  Mass.  88;  James  v.  John- 
son, 6  Johns.  Ch.  423;  Robinson  v.  Leavitt,  7  N.  H.  100. 

1  See  ante,  §  132. 

2  See  chapter  on  Municipal  Corporations  as  Parties  to  Commercial 
Paper. 

3  National  Bank  v.  County  of  Yankton,  101  U.  S.  133,  in  which  the  bonds 
of  Yankton  county,  Dakota,  authorized  by  act  of  Congress  to  be  issued 
in  aid  of  a  railroad,  were  held  to  be  valid  and  binding  upon  the  county. 

4  See  §  117 

5  See  ante,  §  32. 

6  Simeon  Leland  in  Bankruptcy,  6  Ben.  175,  Blatchford,  J.,  sayino':  "I 
think  that  on  the  authority  of  the  decision  of  the  highest  courts  of  this 

759 


§    473  COUPON    BONDS,  [CIl.   XXV. 

§  473.  Negotiability  of  coupon  bonds.  —  Rights  of 
holder  of  the  same. —  Althouizh  it  '.vas  a  rigid  rule  of  the  old 
law  merchauttliat  a  seal  destroj'ed  the  uegotia))ility  of  com- 
mercial paper, ^  the  modern  demands  of  the  commercial 
world  for  corporate  securities,  —  accompanied  })y  the  highest 
evidence  of  its  execution  by  the  proper  officers,  viz.,  the 
seal  of  the  corporation,  —  and  the  further  fact  that  it  was 
once  held  that  a  corporation  could  not  act,  except  by  and 
under  its  seal,^  broke  in  upon  the  force  of  this  rule,  and 
created  an  exception  in  favor  of  the  negotiability  of  cor- 
porate securities,  notwithstanding  they  are  under  seal.  It 
is  now  the  law,  in  the  United  States,  supported  by  an  al- 
most unbroken  line  of  authorities,^  that  the  coupon  bond, 
when  it  contains  the  usual  or  equivalent  words  of  negotia- 
bility, is  for  every  purpose  as  negotiable  as  bills  of  ex- 
change and  promissory  notes. ^ 

state,  aud  of  the  Uuited  States,  the  bouds  aud  coupons  iu  question  are 
negotiable  instruments,  although  issued  by  an  individual  under  his  seal, 
aud  not  by  a  corporation,  and  are  not  specialties  so  as  to  make  them  sub- 
ject, in  the  hands  of  their  assignees,  to  equities  existing  against  their 
assignor.  Although  under  seal,  they  were  issued,  as  shown  on  their 
face,  to  secure  the  payment  of  money  on  time;  and  they  contain  on  their 
face  expressions  showing  that  they  are  expected  to  pass  from  one  to 
another  by  delivery.  Therefore,  the  attributes  of  commercial  paper 
attach  to  them.  Their  character  cannot  be  controlled  or  varied  by  the 
mere  fact  that  their  maker  put  a  seal  after  his  name  (citing  Brainard  v. 
New  York,  etc.,  R.  R.  Co.,  25  N.  Y.  496;  White  v.  Vermont  R.  R.  Co.,  21 
How.  572;  Merey  County  v.  Hacket,  1  "Wall.  83).  Such  bouds  and  their 
coupons  pass  by  delivery;  a  purchaser  of  them  in  good  faith  is  not  af- 
fected by  want  of  title  in  their  vendor,  and  the  burden  of  proof  on  a  ques  - 
tiouas  to  such  good  faith  lies  on  the  party  who  assails  the  possession." 

1  See  ante,  §  32. 

-  See  ante,  §  117. 

3  See  contra  Diamond  v.  Lawrence  Co.,  37  Pa.  St.  353:  "We  will 
not  treat  these  bonds  as  negotiable  securities.  On  this  ground  we  stand 
alone.     All  the  courts,  American  and  English,  are  against  us." 

*  White  V.  Yt.  &  Mass.  R.  R.  Co.,  21  IIow.  575;  Moran  v.  Comrs.  of 
Miami  Co.,  2  Black,  722;  Mercer  County  v.  Hackett,  1  Wall.  83;  Gelpcke 
V.  City  of  Dubuque,  1  Wall.  175;  Meyer  v.  Muscatine,  1  Wall.  382;  Mur- 
ray V.  Larduer,  2  Wall.  110;  Thompson  v.  Lee  Co.,  3  Wall.  227;  Super- 
760 


CH.  XXV,]  COUPON   BONDS.  §    473 

In  England  in  1811,  the  bonds  of  the  East  India  company 
were  declared  to  be  non-negotiable.^  Immediately  there- 
after, Parliament  enacted  that  such  bonds  were  assignable 
and  transferable  by  deli  very. ^  Following  the  example  thus 
set  them  by  Parliajnent,  the  English  courts  applied  the 
doctrine  of  negotiability  to  all  sorts  of  coupon  bonds. -^ 

The  fact  that  provision  is  made  in  the  bond  for  its  being 
*'  registered  and  made  payable  by  transfer  only  on  the 
books  of  the  company,"  will  not  of  itself  destroy  the  nego- 
tiability of  the  bond.*     But  actual  registration  does. 

The  holder  or  purchaser  of  the  coupon  bond  takes  it, 
with  all  the  rights  and  privileges  of  the  purchaser  of  a  biU 
of  exchange  or   a  promissory  note ;  and  he  will  be  a  hona 

visors  V.  Schenck,  5  Wall.  772;  Aurora  City  v.  "West,  7  Wall.  82;  Comrs. 
of  Manor  v.  Clark,  94  U.  S.  279;  First  Nat.  Bauk  v.  Mt.  Tabor,  52  Vt.  87; 
Railway  v.  Cleueay,  13  lud.  161;  Clapp  v.  Cedar  County,  5  Clarke,  15; 
Ringling  v.  Kohn,  4  Mo.  App.  63;  Lafayette  Sav.  Bank  v.  Stoneware  Co., 
4  Mo.  App.  276;  Barrett  v.  County  Court,  44  Mo.  197;  Craig  v.  City  of 
Vicksburg,  31  Miss.  216;  Society  for  Savings  v.  City  of  New  London,  29 
Conn.  174;  Virginia  v.  Chesapeake  &  Ohio  Canal  Co.,  32  Md.  501; 
Spooner  v.  Holmes,  102  Mass.  503;  Hinckley  v.  Union  Pac.  R.  R.,  129 
Mass.  52;  Langston  v.  S.  C.  R.  R.  Co.,  2  S.  C.  248;  San  Antonio  v.  Lane, 
32  Tex.  405;  Consolidated  Association  v.  Avegno,  28  La.  552 ;  Durant  v. 
Iowa  County,  1  Woolworth  C.  C.  72;  Blackman  v.  Lehman,  63  Ala.  519; 
State  ex  rel.  Plock  v.  Cobb,  64  Ala.  128;  Arents  v.  Commonwealth,  18 
Gratt.  773;  Clark  v.  Janesville,  10  Wis.  136;  Mills  v.  Jefferson,  20  Wis. 
50;  Johnson  v.  County  of  Stark,  24  HI.  75;  Chapin  v.  "Vt.  &  Mass.  R.  R. 
Co.,  8  Gray,  575;  Nat.  Exch.  Bankw.  Hartford,  etc.,  R.  R.  Co.,  8  R.  I. 
379;  Conn.  Mut.  Life  Ins.  Co.  v.  Cleveland,  etc.,  R.  R.  Co.,  41  Barb.  9; 
Bank  of  Rome  w.  Village  of  Rome,  19  N.  Y.  24 ;  Seybel  v.  Nat.  Currency 
Bank,  54  N.  Y.  288;  Evertson  u.  Nat.  Bank  of  Newport,  4  Hun  (11  N. 
Y.  S.  C),  695;  66  N.  Y.  15;  Morris  Canal,  etc.,  Co.  v.  Fisher,  1  Stock, 
667;  City  of  Elizabeth  v.  Force,  29  N.  J.  Eq.  587;  Weith  v.  City  of  Wil- 
mington, 68  N.  C.  341. 

1  Glynn  v.  Baker,  1  East.,  510. 

2  51  Geo.  III.,  ch.  64. 

3  Wookey  v.  Pole,  4  B.  &  Aid.  1 ;  Gorgier  u.  Melville,  3  B.  &  C.  45;  Lang 
V.  Smith,  7  Bing.  284;  Rumball  v.  Metropolitan  Bank,  2  Q.  B.  Div,  194; 
Goodwin  v.  Roberts,  L.  R.  10  Exch.  76,  337. 

*  Savannah  &  Memphis  R.  R.  Co.  v.  Lancaster,  62  Ala.  563. 

761 


§    474  COUPON    BONDS.  [CH.  XXV. 

fide  holder,  under  the  same  circumstauces,  and  be  subject 
to  the  same  defenses,  as  if  his  bond  had  been  an  unsealed 
bill  or  note.^ 

If  the  coupon  is  overdue  when  it  is  transferred,  the  pur- 
chaser takes  it  subject  to  all  the  equities. ^  But  the  fact 
that  overdue  coupons  are  attached  to  a  bond,  when  the 
bond  is  sold  and  transferred,  will  not  of  itself  affect  the 
negotiability  of  the  bond,  if  it  was  itself  not  yet  due."^ 
But  the  overdue  coupon  may,  in  connection  with  other 
facts  or  circumstances  in  the  knowledge  of  the  purchaser^ 
be  sufficient  to  put  the  purchaser  on  his  inquiry.*  And,  of 
course,  this  would  be  the  case,  where  it  was  stipulated  in 
the  bond  that  on  default  in  the  payment  of  any  coupon  the 
bond  itself  will  be  due  and  payable.^ 

§  474.  To  whom  payable  —  Transfer  by  indorsement 
or  delivery.  —  Coupon  bonds  are  usually  made  payable  to 
bearer,  and   are  transferable  by  delivery,^  although  they 

1  2  Diiniel's  Negot.  Inst.,  §§  1502,  1503.  See  ante,  chapter  on  Rights 
of  Bona  Fide  Holder. 

2  Arents  v.  Commonwealth,  18  Gratt.  773;  First  Nat.  Bank  v.  County 
Comrs.,  14  Minn.  79;  Ashui'st  v.  Bank  of  Australia,  37  Eng.  L.  &Eq.  195; 
Evertsen  v.  National  Bank,  66  N.  Y.  22,  23,  semble.  See  Bank  of  La.  v. 
City  of  N.  O.,  5  Am.  Law  Reg.  (n.  s.)  555;  Brown  v.  Davies,  3  T.  R.  80; 
Rothschild  v.  Carney,  9  B.  &  C.  391 ;  Hinckley  v.  Union  Pac.  R.  R.  Co., 
129  Mass.  52.  The  presumption  of  law  is,  however,  that  the  holder  ac- 
quired the  coupon  bona  fide  and  before  maturity.  City  of  Lexington  v. 
Butler,  141  Wall.  295. 

3  Railway  Co.  v.  Sprague,  103  U.  S.  762,  distinguishing  the  case  of 
Parsons  v.  Jackson,  99  U.  S.  434,  and  Cromwell  v.  County  of  Sac,  96  U. 
S.  58.  See  also  Nat.  Bank  v.  Kirby,  108  Mass.  497;  Gilbough  v.  Norfolk, 
etc.,  Co.,  1  Hughes,  410;  Bossu.  Hewitt,  15  Wis.  260;  State  ex  rel.  Plock 
V.  Cobb,  64  Ala.  158.     See  contra  14  Minn.  77. 

4  Parsons  v.  Jackson,  99  U.  S.  434. 

5  Mayor,  etc.,  of  Griffin  v.  City  Bank,  58  Ga.  584;  Walnut  t?.  Wade,  103 
U.  S.  695. 

«  Brookman  v.  Metcalf,  32  N.  Y.  591;  Conn.  Ins.  Co.  v.  C.  C.  &  C.  R. 
R.  Co.,  41  Barb.  9;  Mercer  County  v.  Hackett,  1  Wall.  83;  City  of  Ken- 
osha V.  Lamson,  9  Wall.  478;    Roberts  v.  Bolles,  101  U.  S.  122;  Morris 
762 


CH.  XXV.]  COUPON    BONDS.  §    -474 

may  be  made  payable  to  the  order  of  the  person  to  whom 
they  are  issued,  and  in  that  case  they  could  be  transferred 
only  by  indorsement.^ 

Although  it  is  necessary  in  ordinary  commercial  pa- 
per to  give  the  name  of  the  payee,  or  to  describe  him  in 
some  other  way ;  ^  this  is  not  necessary  to  the  validity  or 
to  the  negotiable  character  of  a  coupon  bond.  The  coupon 
bond  is  designed  to  pass  from  hand  to  hand  indefinitely, 
and  it  does  not  matter  to  know  to  whom  it  was  first 
issued.^ 

But  in  order  that  the  coupon  bond  may  be  transferable 
at  all,  it  must  contain  words  of  negotiability.  It  is  not 
necessary  to  employ  the  usual  words,  or  order  or  bearer, 
but  any  other  word  which  indicates  the  intention  to  permit 
its  transfer  will  suffice,  such  as  to  the  "  holder;"  *  or  to  A. 
and  his  assigns,  when  the  transfer  must  be  by  indorsement. 
Delivery  is  as  essential  to  passing  the  title  of  coupon  bonds, 
as  of  any  other  kind  of  commercial  paper  ;  and  if  possession 

Banking  &  Canal  Co.  v.  Lewis,  1  Beas.  323;  Eaton  &  H.  R.  R.  Co.  v. 
Hunt,  20  Ind.  457;  Carr  v.  Le  Fevre,  27  Pa.  St.  413;  Johnson  v.  County 
of  Stark,  24  111.  75;  Supervisors  of  Mercer  County  w.  Hubbard,  45  111. 
139;  Town  of  Eagle?;.  Kohn,  84  111.  292. 

1  City  of  Lexington  v.  Butler,  15  Wall.  295.  The  party  transferring 
by  indorsement  assumes  the  customary  liabilities  of  indorsers  of  com- 
mercial paper.  Bonner  v.  City  of  New  Orleans,  2  Woods  C.  C.  135; 
Jones  on  R.  R,  Securities,  §  348.  And  whether  the  transfer  be  by  deliv- 
ery or  by  indorsement,  the  transferrer  guarantees  the  genuineness  of  the 
bond,  and  is  obliged  to  refund  the  consideration,  if  the  bond  should 
prove  to  be  a  forgery.  Smith  v.  McNair,  19  Kan.  330;  First  Nat.  Bank  v. 
Peck,  8  Kan.  660.  See  chapters  on  Transfer  in  General,  and  Transfer  by 
Indorsement. 

^  See  ante,  §  17. 

3  Woods  V.  Lawrence  Co.,  1  Black,  360;  White  v.  Vermont,  etc.,  R.  R. 
21  How.  575;  Preston  v.  Hull,  23  Gratt.  613.     See  Eversten  v.  Nat. 
k  of  Newport,  66  N.  Y.  19,  20. 

*  Arents  v.  Commonwealth,  18  Gratt.  750;County  of  Wilson  u.  Na- 
tional Bank,  103  U.  S.  776;  lorter  w.  City  of  Janesville,  3  Fed  Rep. 
619. 

5  Brainard  v.  New  York,  etc.,  R.  R.  Co.,  25  N.  Y.  496;  10  Bosw.  832 

763 


§    475  COUPON    BONDS.  [CH.  XXV. 

ii^  procured  without  a  delivery,  the  rights  of  a  bona  fide 
holder  will  be  the  same  as  if  it  had  been  a  bill  or  note.^ 

§  475.  The  formal  parts  of  bond  and  coupon  —  Seal 
not  necessary. — The  bond  and  coupons  are  generally 
printed  on  paper  of  very  fine  texture,  more  or  less  beauti- 
fully engraved.  But  in  other  respects,  the  bond  differs  in 
form  very  little  from  a  promissory  note.  It  and  the 
coupons  are  usually  signed  by  the  president  of  the  corpo- 
ration, or  the  chief  executive  of  the  town  or  municipality^ 
which  issues  them,  and  couutersigiled  by  the  secretary, 
treasurer,  cashier,  or  other  clerk  of  the  corporation,  ac- 
cording to  its  by-laws,  or  the  statutes  *'  in  such  cases  made 
and  provided."  These  signatures  may  be  either  written  or 
printed. 2  The  coupon  may  take  on  any  form ;  sometimes 
it  is  a  promissory  note;^  at  other  times,  a  bill  of  exchange 
on  the  treasury  of  the  corporation  ;  *  a  draft  or  order,  with- 
out naming  any  drawee;  ^  a  check,^  and  a  mere  due-bill  or 
acknowledgment  of  indebtedness.^ 

It  has  been  sometimes  doubted  whether  a  coupon  bond 
would  be  unaffected  by  the  absence  of  a  seal.^  But  inasmuch 
as  the  seal  was  originally  the  only  objection  to  the  appli- 

1  Ledwick  v.  McKim,  53  N.  Y.  315;  Redlick  v.  Doll,  54  N.  Y.  236.  If 
coupons  refer  to  bonds  to  which  they  were  attached,  the  purchaser  of  a 
severed  coupon  is  chargeable  with  notice  of  all  that  the  bond  contains. 
McClure  v.  Oxford  Township.  94  U.  S.  429;  Selliman  v.  Railroad  Co.,  27 
Gratt.  119. 

2  Lyde  v.  County,  IC  Wall.  6;  McKee  i\  Vernon  County,  3  Dill.  C.  C. 
210;  Pennington  v.  Baehr.  ()5  Cal.  508.  It  has  been  held  that  if  the  bonds 
have  been  properly  executed,  it  will  not  affect  the  validity  of  the  coupons 
if  they  are  signed  by  only  one  of  the  officers.  Thayer  v.  Montgomery  Co., 
3  Dillon  C.  C.  389. 

»  Thompson  v.  Lee  County,  3  Wall.  327. 
4  Moran  v.  Corars.  of  Miami  County,  2  Black,  722. 
*  Mercer  County  v.  Hubbard,  45  111.  140. 
6  Arents  v.  Commonwealth,  18  Gratt.  753. 
">  Woods  V.  Lawrence  County,  1  Black,  360. 
8  Mercer  County  v.  Hackett,  1  Wall,  83. 
764 


OH.  XXV.  1  COUPON    BONDS.  §    475 

cation  to  these  bouds  of  the  character  and  incidents  of 
negotiability,  it  is  difficult  to  see  any  reason  why  the 
absence  of  the  seal  would  now  change  their  character  in 
any  essential  respect  and  this  is  now  the  ruling  of  the 
courts.^ 

Like  other  commercial  paper,  it  is  necessary  to  the  ne- 
sotiabilitv  of  the  bond,  that  the  amount  to  be  paid  is  cer- 
tain.  Any  uncertainty  in  respect  to  the  amount  will 
destroy  the  negotiability  of  the  bond.^ 

The  parties  to  commercial  paper  have  generally  the  un- 
restricted power  to  stipulate  a  place  of  payment  in  the 
paper  ;  and,  according  to  the  weight  of  authority,  the  parties 
to  coupon  bonds  are  not  hampered  by  any  restrictions  in 
that  regard. 3  But  it  has  been  held  in  Illinois  that  a  muni- 
cipal corporation  cannot,  without  express  authorit}'  from 
the  legislature,  provide  for  the  payment  of  its  bonds  and 
coupons  at  any  other  place  than  its  treasury.^ 

The  figures,  denoting  the  number  of  the  bond  in  a  series, 
constitute  no  essential  part  of  it,  and  sm  alteration  of  them 
will  not  affect  the  rights  of  a  bona  Jide  holder  of  the  bond.'' 
Where  the  coupon  bonds  of  a  corporation  are  guaranteed 
by  the  State,  any  agreement  entered  into   and  indorsed  on 

1  The  People  v.  Mead,  24  N.  Y.  124;  Coun.  Mut.Life  Ins.Co.t;.  Cleve- 
land, etc.,  R.  E.  Co.,  41  Barb.  22;  Augusta  v.  Augusta  Bank,  56  Me.  176; 
San  Antonio  ^?.Meharty,  96  U.  S.  315;  Draper  v.  Spriugport,  104  U.  S.  501. 

2  Parson  v.  Jackson,  99  U.  S.  434.  Also  Jackson  v.  Vicksburg,  etc., 
R.  R.  M.  Co.,  2  Woods  C.  C.  141. 

s  Gelpcke  v.  Dubuque,  1  Wall.  178;  Thompson  v.  Lee  County,  3  Wall 
338;  City  of  Kenosha  u.  Lamsou,  8  Wall.  478;  City  of  Lexington  y.  Butler, 
14  WaU.  289;  Lynde  v.  County  of  Winnebago,  16  Wall.  13;  Conn.  Mut. 
Ins.  Co.  V.  Cleveland,  etc.,  R.  R.  Co.,  41  Barb.  9. 

*  Prett^man  v.  Tazewell  County,  19  111.  406;  People  ex  rel.,  etc.,  v. 
Tazewell  County,  22  111.  151;  Johnson  v.  County  of  Stark,  24  111.  91; 
Pekin  v.  Reynolds,  31  111.  530. 

^  City  of  Elizabeth  v.  Force,  29  N.  J.  Eq.  591,  overruling  28  N.  J.  Eq. 
687;  Commonwealth  u.  Emigration  Sav.  Bank,  98  Mass.  12;  Berdsell  t?. 
Russell,  29  N.  Y.  220. 

765 


§    47(j  COUPON    BOXDS.  [CH.   XXV. 

the  boudriby  the  corporation,  subsequent  to  their  execution 
by  the  State,  will  bind  only  the  corporation,  and  not  the 
State,  as  guarantor.^ 

§  47(>.   Presentment   of   coupons  for    payment.  —  The 

coupons  need  not  be  presented  for  payment  on  the  day  of 
maturity,  in  order  to  hold  the  principal  obligors  liable,  even 
■when  they  are  in  the  form  of  a  draft  or  order  on  a  bank.^ 
But  it  would  be  necessary  to  present  at  maturity,  in  order 
to  hold  an  indorser,  if  there  be  one;^  and  within  a  reason- 
able time  after  maturity,  in  order  to  hold  a  guarantor.* 
Nor  is  a  prior  presentment  for  payment  necessary  to  the 
recovery  of  interest  on  coupons,^  even  when  the  coupons 
are  made  payable  at  a  particular  bank  in  another  State.® 
But  if  the  railroad  or  other  corporation,  which  issued  the 
bond  and  coupon,  can  show  that  it  was  ready  at  the  stipu- 
lated place,  or  at  its  treasury,  to  pay  the  coupon  on  the 
day  of  maturity,  no  interest  could  then  be  recovered  on 
the  coupon.^ 

1  Wallace  v.  Loomis,  97  U.  S.  147. 

2  Mayor,  etc.,  v.  Potomac  Ins.  Co.,  58  Tenu.  290;  County  of  Greene  v. 
Daniel  and  County  of  Pickens  v.  Daniel,  102  U.  S.  187;  Arents  v.  Com- 
monwealth, 18  Gratt.  773;  Langston  v.  S.  C.  R.  R.  Co.,  2  S.  C.  248;  Jef- 
fersonville  v.  Patterson,  2G  Ind.  IC, 

*  Bonner  v.  New  Orleans,  2  Woods  C.  C.  135. 

*  Arents  v.  Commonwealth,  18  Gratt.  773. 

5  Walnut  V.  Wade,  103  U.  S.  G83;  Ohio  v.  Frank,  103  U.  S.  697;  North 
Pa.  R.  R.  Co.  V.  Adams,  54  Pa.  St.  97;  Mills  v.  Jefferson,  20  Wis.  50;  Jef- 
fersouville  v.  Pattersonville,  2G  Ind.  16;  Langston  u.  S.  C.  R.  R.  Co.,  2  S. 
C.  248;  San  Antonio  v.  Lane,  32  Texas,  405;  Virginia  v.  Chesapeake,  etc., 
Canal  Co.,  32  Md.  501.  See  contra  Whittaker  u.  Hartford,  etc.,  R.  R. 
Co.,  8  R.  I.  47;  Pekin  v.  Reynolds,  31  111.  531 ;  Johnson  v.  Stark  County, 
24  111.  75;  Chicago  v.  People,  56  111.  327. 

6  fielpcke  w.  Dubuque,  1  Wall.  175;  Thomsons.  Lee  County,  3  Wall- 
327.  See  also  Aurora  City  v.  Welt,  7  Wall.  82;  Clark  v.  Iowa  City,  20 
Wall.  583;  Genoa  v.  Woodruff,  92  U.  S.  502. 

'  Walnut  V.  Wade,  103  U.  S.  697;  North  Penn.  R.  R.  Co.  v.  Adams, 
54  Pa.  St.  97. 

766 


CH.  XXV. I  COUPON    BONDS.  §    478 

§  477.    Interest  and   exchange  on  bond  and  coupon. — 

During  the  time  that  the  bond  is  running,  the  interest  col- 
lectible on  the  bond  is  represented  by  the  coupon,  and  it 
can  only  be  recovered  by  a  presentment  of  the  coupon. ^ 
After  maturity  of  the  bond,  interest  may  be  recovered 
by  the  holder  of  the  bond  for  any  delay  in  payment. 

Since  coupons  are  separate  and  independent  securities, 
they  bear  interest  themselves  after  their  maturity  ;  and  the 
interest  is  recoverable  by  the  holder  of  the  coupon.^ 

And  so,  also,  may  exchange  be  recovered  on  coupons, 
whenever  it  could  be  recovered  on  bills  and  notes. ^ 

§  478.  Actions  on  bonds  and  coupons.  — The  holder 
of  both  the  bond  and  the  coupons  may  sue  on  them  in  his 
own  name;  *  and  although   it  has  been  denied,^  it  is  now 

'  City  of  Keuosha  w.  Larasou,  9  Wall.  482;  Williamson  v.  New  Al- 
bany, etc.,  R.  R.  Co.,  9  Am.  Ry.  Times,  37,  U.  S.  C.  C. 

2  Aurora  City  v.  West,  7  Wall.  105;  Gelpcke  v.  Dubuque,  1  Wall.  206 
Thomson  t?.  Lee  Co.,  3  Wall.  332;  Genoa  v.  Woodruff,  92  U.  S.  502;  Amy 
V.  Dubuque,  98  U.  S.  471;  Koslikonong  v.  Burton,  104  U.  S.  668;  Mills  v 
Jefferson,  20  Wis.  50;  Saa  Antonio  v.  Lane,  32  Texas,  405;  Nat.  Exch 
Bank  V.  Hartford,  etc.,  R.   R.  Co.,  8  R.  I.  375;  Beaver  County?;.  Arm- 
strong, 6  Wright,  63;  North  Penn.  R.  R.  Co.  v.  Adams,  54  Pa.  St.  94 
Welsh  V.  St.  Paul,  etc.,  R.  R.  Co  ,   25   Minn.  320;  Arents  v.  Common- 
wealth, 18  Gratt.  776;  Gibert  v.  W.  C.  V.  M.,  etc.,  R.  R.  Co.,  33  Gratt 
599;  Hollingsworth  u.  City  of  Detroit,  3  McLean,  472;  Virginia  v.  Chesa- 
peake, etc.,  Canal  Co.,  32  Md.  501;  Laugston  v.  S.  C.  R.  R.,  2  S.  C.  248 
Conn.  Mut.  Ins.  Co.  v.  Cleveland,  etc.,  R.  R.  Co.,  41  Barb.  9. 

3  Gelpcke,  v.  Dubuque.  1  Wall.  20  Koshkouongv.  Burton,  104  U.  S.  668 
Jeffersonville  v.  Paterson,  26  Ind.  16.  In  Gelpcke  v.  Dubuque,  "  mu- 
nicipal ))onds  with  coupons  payable  to  bearer,  having  by  universal  usage 
and  consent  all  the  qualities  of  commercial  paper,  a  party  recovering  on 
the  coupons  is  entitled  to  the  amount  of  them  with  interestand  exchange 
at  the  place  where  by  their  terms  they  were  made  payable." 

*  Society  for  Savings  v.  City  of  New  London,  29  Conn.  175;  Carr  ». 
LeFevre,  27  Pa.  St.  413;  Johnson  v.  County  of  Stark,  22  111.  75. 

5  In  Jackson  V.  Y.  &  C.R.  R.  Co.,  2  Am.  LawReg.  (n.s.)  585;  Crosby  w. 
New  London,  etc.,  R.  R.  Co.,  26  Coun.  121,  it  was  held  that  no  separate 
action  can  be  maintained  on  the  coupon,  unless  the  coupon  contained  a 
distinct  promise  to  pay. 

767 


§    47J)  COUPON    BONDS.  [CH.  XXV. 

generally  held  to  be  the  law  that  the  holder  of  the  coupon 
may  in  any  case  maintain  a  separate  action  on  the  coupon, 
and  need  not  join  with  the  holder  of  the  bond;  nor  need 
the  bond  be  produced  in  evidence. ^  The  recovery  on 
the  bonds  is  so  independent  of  the  recovery  on  the 
coupons,  that  a  judgment  that  one  is  a  bona  fide  owner 
of  certain  coupons  does  not  prove  that  he  is  also  a  bona 
pie  owner  of  the  bonds,  from  which  the  coupons  were 
detached. 2 

The  same  provision  of  the  statute  of  limitation  applies 
to  both  bond  and  coupon  ;  and  in  order  that  action  may  be 
brought  on  the  coupon,  it  must  be  begun  within  the  statu- 
tory period  after  its  maturity,  although  the  bond  is  not  yet 
due.^ 

§  479.  When  consideration  paid  to  corporation  for  in- 
valid bond  may  be  recovered.  —  When  the  transaction,  in 
which  the  bonds  were  issued,  is  not  a  malum  in  se,  and  the 
parties  paying  for  the  bonds  are  not  participants  in  the 
violation  of  the  law,  the  consideration  paid  to  the  corpora- 
tion for  the  illegal  bonds  can  be  recovered  back,  with  in- 

i  Comrs.  of  Knox  Co.  v.  Aspinwall,  21  How.  54;  Beaver  County  v. 
Armstrong,  44  Pa.  St..63;  KenuardtJ.  Cass  Co.,  U.  S.  C.  C,  3  Dillon  C.  C. 
147;  Town  of  Cicero  v.  Clifford,  53  Ind.  191;  First  Nat.  Bank  w.  Mt. 
Tabor,  52  Vt.  87;  Thompson  v.  Lee  County,  3  Wall.  327;  Walnut  r. 
Wade,  103  U.  S.  605;  Nat.  Exch.  Bank  v.  Hartford,  etc.,  E.  R.  Co.,  8  R. 
1.375;  Mayor,  etc.,  v.  Potomac  Ins.  Co.,  58  Tenu.  296;  Welch  r.  First 
Div.  St.  Paul,  etc.,  R.  R.  Co.,  25  Minu.  320.  The  coupons  may  be  sued 
on,  notwithstanding  the  bonds  have  been  already  paid  and  surrendered. 
Nat.  Exch.  Bank  v.  Hartford,  etc.,  R.  R.  Co.,  supra;  and  although  the 
bonds  neeci  not  be  produced  in  evidence,  the  coupons  in  suit  should  or- 
dinarily be  identified  in  the  declaration  by  a  statement  of  the  number  of 
the  bond,  date,  sura  and  time  of  payment.  Kennard  v.  Cass  Co., 
supra. 

2  Stewart  v.  Lansing,  104  U.  S.  5C5. 

3  City  of  Kenosha  *-.  Lamson,  9  Wall.  483,  484 ;  City  of  Lexington  v. 
Butler,  15  Wall.29fi;  Clark  u.  Iowa  City,  20  Wall.  586;  Amy  v.  Dubuque, 
98  U.  S.  471;   Koshkonong  v.  Burton,  104  U.  S.  G68. 

7f>8 


CH.  XXV.]  COUPON    BONDS.  §    480 

terest  from  the  time  that  the  corporation  denied  its  liability 
and  refused  to  pay.^ 

§  480.  When  muuicipal  corporation  has  power  to  issue 
negotiable  coupon  bonds. — Although  it  has  been  ques- 
•tioned,  it  is  undoubtedly  now  the  established  rule  of  law 
in  the  United  States  that  a  municipal  corporation  has  not 
the  power  to  borrow  money  or  to  execute  and  issue  nego- 
tiable coupon  bonds,  unless  that  power  is  granted  to  it  by 
the  legislature,  expressly  or  by  necessary  implication,  as 
incidental  to  the  effectual  attainment  of  the  ends  contem- 
plated in,  and  sanctioned  by,  the  grant  of  express  powers. ^ 

But  while  this  is  true,  the  weight  of  authority  recognizes 
the  municipal  corporation  as  having  by  implication  the 
l)ower  to  contract  debts  and  borrow  money  to  pay  them, 
whenever  it  is  necessary  to  carry  out  some  express  power,^ 
unless  the  statutory  authority  directly  or  inferentially  con- 
templates the  raising  of  the  necessary  funds  by  taxation.* 
So,  also,  whenever  a  corporation  has  the  power  to  borrow 
money,  it  has  by  implication  the  power  to  evidence  the 
debt  thus  contracted    by  the  issue  of   negotiable  coupon 

•1  Louisiana  v.  Wood,  102  U.  S.  294,  affirming  s.  c.  in  5  Dillon  C.  C. 
122.  See  also  Thomas  v.  City  of  Riclimond,  12  Wall.  351;  Draper  u. 
Spriugport,  104  U.  S,  501;  Oneida  Bank  v.  Ontario  Bank,  21  N.  Y.  496; 
Jackson  County  v.  Hall,  55  111.  444. 

2  Thompsons.  Lee  County,  3  Wall.  327;  Dartmouth  College  v.  Wood- 
ward, 4  Wheat.  63C;  Miller  v.  Ray,  19  Wall.  468;  Pendleton  County  v. 
Amy,  13  Wall.  297;  Kenuicott  v.  Supervisors,  16  Wall.  452;  St.  Joseph 
Township  v.  Rogers,  16  Wall.  644;  Town  of  Coloma  v.  Eaves,  92  U.  S. 
484;  Town  of  South  Ottawa  v.  Perkins,  94  U.  S.  262;  Starin  v.  Town  of 
Genoa,  23  N.  Y.  447;  Clark  v.  Des  Moines,  19  Iowa,  200;  Dively  v.  Cedar 
Falls,  21  Iowa,  566. 

3  Lyude  V.  County,  16  Wall.  12;  City  of  Galena  u.  Corwith,  48  111.  424; 
Bankw.  Chillicothe,7  Ohio,  pt.  II.,  31;  State  u.  Madison,  7  Wis.  688;  Mills 
V.  Gleason,  11  Wis.  47.     See  Wells  v.  Supervisors,  102  U.  S.  625. 

*  Wells  V.  Supei-visors,  102  U.  S.  625.  In  such  a  case,  the  express 
power  to  contract  a  debt  would  not  include  by  implication  the  power  to 
borrow  money  to  pay  for  it.  Wilson  v.  City  of  Shreveport,  29  La.  678; 
Ketchum  v.  City  of  Buffalo,  14  N.  Y.  256. 

49  769 


§    480  COUPON   BONDS.  [CH.  XXV. 

bonds  for  the  amount.^  But  in  New  York,  it  is  held  that 
the  power  to  contract  a  debt  did  not  involve  hy  implication 
the  power  to  execute  and  issue  negotiable  bonds  for  the 
f<ame.^  The  grants  of  power  to  municipal  corporations  and 
to  their  officers  are,  however,  strictly  construed  ;  ^  and 
where  the  statute  points  out  a  particular  method  or  course 
to  be  pursued  in  the  issue  of  the  bonds,  the  bonds  are 
invalid,  if  any  other  course  is  adopted.*  Thus,  all  the 
conditions  precedent  set  down  in  the  statute  must  be  per- 
formed, before  there  can  be  a  lawful  issue  of  the  bonds. ^ 


1  Seybert  r.  City  of  Pittsburgli,  1  Wall.  372;  Meyer  u.  Muscatine.  1 
Wall.  387;  City  of  Williamsport  v.  Commonwealth,  84  Pa.  St.  500;  Cora- 
monwealth  ex  rel.  Reinbath  v.  Pittsburgh,  41  Pa.  St.  278;  Common- 
wealth V.  Pittsburgh,  34  Pa.  St.  496 ;  Middleton  v.  Alleghany  County,  37 
Pa.  St.  241;  Railroad  Co.  v.  Evansville,  15  lud.  395;  De  Voss  v.  City  of 
Richmond,  18  Gratt.  338;  Galena  v.  Corwith,  48  111.  423;  Rogers  v.  Bur- 
lington, 3  Wall.  G54. 

2  Starin  v.  Town  of  Genoa,  23  N.  Y.  454,  Lott,  J. :  '<  It  was  evidently 
the  intention  of  the  act  that  money  should  be  raised  and  paid  over  to  aid 
in  the  construction  of  a  railroad,  and  no  color  is  given  to  the  idea  or  the 
position  that  the  credit  merely  of  any  town  should  be  given,  through  and 
by  which  money  might  be  raised.  A  town  might  be  willing  to  incur  a 
debt  to  a  limited  sum  with  the  knowledge  that  the  whole  amount  for 
which  it  was  incurred  was  actually  to  be  appropriated  to  the  construc- 
tion of  a  railroad  that  might  be  deemed  conducive  to  its  interests,  but 
would  absolutely  refuse  to  issue  their  bonds,  for  the  purpose  of  sale, 
from  which  much  less  than  the  amount  for  which  they  were  given  might 
be  realized.  If  it  had  been  intended  to  authorize  bonds, to  be  given  for 
stock,  there  is  no  reason  why  that  intention  should  not  have  been  de- 
clared, as  was  done  in  the  law  in  relation  to  the  village  of  Rome,  above 
referred  to."  See  also  Gould  v.  Town  of  Sterling,  23  N.  Y.  458,  and 
Cooley  Const,  Lim.  218. 

3  Veeder  v.  Lima,  19  Wis.  291;  Treadwell  v.  Commissioners,  etc.,  11 
Ohio  St.  190. 

^  County  of  Hardin  v.  McFarlan,  82  111,  138;  Starin  v.  Town  of  Genoa, 

23  N.  Y.  439;  Gould  v.  Town  of  Sterling,  23  N,  Y.  456;  People  v.  Mead, 

24  N.  Y,  114;   Scipio  v.  Wriglit,  101  U.  S,  605, 

5  Steiues  v.  Franklin  County,  48  Mo.  107;  Flagg  u.  Palmyra,  33  Mo. 
40:   Marshall  Co.  v.  Cook,  38  111.  44;  Town  of  Eagle  v.  Kohn,  84  111.  292; 
Wallace  v.  Mayor  of   San  Jose,  29  Cal.  188;  Portland,  etc.,  R.  R.  Co,  v. 
770 


CH.  XXV.]  COUPON   BONDS.  §    481 

But  only  substantial  compliance  with  the  statute  is  re- 
quired. Immaterial  omissions  or  irregularities  will  not 
affect  the  validity  of  the  bonds. ^  It  may  also  be  added, 
that,  when  the  general  authority  to  issue  the  bonds  is 
established,  the  law  presumes,  until  the  contrary  is  shown, 
that  all  the  conditions  have  been  complied  with ;  and  the 
plaintiff  need  not  aver  a  performance  of  them.^ 

§  481.  For  what  objects  may  municipal  corporations 
be  empowered  to  issue  bonds. —  There  is  a  limit  even  to  the 
power  of  the  legislature  to  authorize  the  issue  of  bonds  by  a 
municipal  corporation.  In  order  that  the  bonds  may  be  law- 
fully issued,  they  must  be  issued  to  attain  some  public 
purpose  or  benefit.  If  the  bonds  are  issued  to  secure  some 
private  end,  the  bond  is  void,  notwithstanding  the  express 
grant  of  authority  by  the  legislature.^  And  the  tax-payers 
of  the  municipality  may  secure  by  an  injunction  the  preven- 
tion of  such  a  disposition  of  the  public  credit.* 

Of  course,  every  purpose  is  public,  which  involves  the 
construction  of  public  buildings,  works  and  grounds,   such 

Hartford,  58  Me.  23;  Barnes  v.  Town  of  Lacon,  84  III.  461;  State  of  Ar- 
kansas V.  Little  Rock,  etc.,  R.  R.  Co.,  31  Ark.  701. 

1  People  V.  Holden,  82  111.  93;  Mercer  Co.  v.  Hubbard,  45  111142; 
Town  of  East  Lincoln  v.  Davenport,  94  U.  S.  801 ;  Steines  v.  Frank- 
lin Co.,  48  Mx).  179;  Smead  v.  Trustee's  Union  Township,  8  Ohio 
St.  394. 

2  Lincoln  V.  Iron  Co.,  103  U.  S.  412;  Commissioners  of  Knos  Co.  v. 
Aspinwall,  21  How.  544;  Meyer  v.  Muscatine,  1  Wall.  393;  Gelpcke  «. 
Dubuque,  1  Wall.  203;  Supervisors  v.  Schenck,  5  Wall.  784;  Mayors. 
Lord,  9  Wall.  414;  City  of  Lexington  v.  Butler,  14  Wall.  296;  County  of 
Henry  v.  Nicolay,  95  U.  S.  626;  San  Antonio  v.  Lane,  32  Tex.  414. 

3  Davidson  v.  Ramsey  County,  18  Minn.  482;  Loan  Association  v. 
Topeka,  20  Wall.  655;  Township  of  Burlington  v.  Beasley,  94  U.  S. 
314;  Allen  v.  lulaabitants  of  Jay,  GO  Me.  124;  Lowell  v.  Boston,  111 
Mass.  454;  Commercial  Nat.  Bank  v.  lola,  9  Dill.  C.  C.  353;  9  Kan. 
700;  State  ex  rel  Griffith  v.  Osawkee  Township,  14  Kan.  418;  Weis- 
mer  v.  Village  of  Douglass,  11  N.  Y.  S.  C.  (4  Hun)  211. 

*  Crampton  v.  Zabriskie,  101  U.  S   601. 

771 


§    481  COUPOX    BONDS.  [CH.  .iXV. 

as  parks  and  cemeteries.^  And  so,  also,  is  it  a  public  pur- 
pose to  promote  the  construction  of  railroads,  turnpikes, 
canals  and  other  highways,  by  the  donation  of  money  or 
by  taking  the  stock  of  the  private  corporation,  which  under- 
takes the  construction. ■■^ 


1  County  Commissioners  v.  Chandler,  9G  U.  S.  205  (a  bridge)  ;  Town- 
ship of  Burlington  v.  Beasley,  94  U.  S.  314;  City  of  Aurora  v.  West,  9 
Ind.  74  (gas-works)  ;  Rome  v.  Cabat,  28  Ga.  50  (water-works)  ;  Stein  v. 
Mobile,  24  Ala.  591;  Hale  v.  Houghton,  8  Mich.  458;  Greeley  ».  People, 
GO  HI.  19  (town-hall);  Eogers  v.  Burlington,  3  Wall.  3C2  (construction 
and  grading  of  streets);  Sturtevaut  v.  City  of  Alton,  3  McLean,  393; 
State  V.  Madison,  7  Wis.  088  (markets) ;  Mills  v.  Gleason,  11  Wis.  470; 
Robinson  v.  St.  Louis,  28  Mo.  488  (fire  engines). 

2  Knox  County  v.  Aspiuwall,  21  How.  539;  Gelpcke  v.  Dubuque,  1 
Wall.  175;  Seybert  u.  Pittsburg,  1  Wall.  272;  Meyer  v.  City  of  Musca- 
tine, 1  Wall.  390;  Sheboygan  County  v.  Pai'ker,  3  Wall.  9G;  Havemeyer 
V.  Iowa  County,  3  Wall.  294;  Thomson  v.  Lee  County,  3  Wall.  330; 
Rogers  V.  Burlington,  3  Wall.  362;  Mitcliell  v.  Burlington,  4  Wall.  274; 
Campbell  v.  Kenosha,  5  Wall.  19G,  200;  Supervisors  v.  Schenck,  5  Wall. 
77G;  The  City  of  Kenosha  v.  Lamson,  9  Wall.  479;  Bath  County  v.  Amy, 
13  Wall.  244 ;  Pendleton  Co.  v.  Amy,  13  Wall.  298;  Kcnniscottt;.  Supervis- 
ors, IG  WaU.  452;  St.  Joseph  Township  u.  Rogers,  IG  Wall.  C44;  Olcottv. 
Supervisors,  16  Wall.  C78;  Township  of  Pine  Grove  v.  Talcott,  19  Wall. 
6GG;  City  of  Bridgetown  v.  Housatouic  R.  R.  Co.,  15  Conn.  475;  Talbot  v. 
Dent,  9  B.  Mon.  526;  Slack  v.  Maysvilie  R.  R.  Co.,  13  B.  Mon.  1 ;  Davis 
V.  Ramsey  Co.,  18  Minn.  482;  Strickland  v.  Railroad  Co.,  27  Miss.  209; 
Leavenworth  County  v.  Miller,  7  Kan.  479;  Gibbons  v.  R.  R.  Co.,  36 
Ala.  410;  Augusta  Bank  v.  Augusta,  49  Me.  507;  Starin  v.  Genoa,  23  N. 
Y.  439;  Gould  v.  Sterling,  23  N.  Y.  439;  San  Antonio  v.  Lane,  32  Tex. 
405;  Goddinv.  Crump,  8  Leigh,  120;  Nichol  v.  Mayor  of  Nashville,  9 
Humph.  252;  Commonwealth  u.  McWilliams,  11  Pa.  St.  61 ;  Sharj^les  v. 
Mayor,  21  Pa.  St.  147;  Moscrs  v.  City  of  Reading,  21  Pa.  St.  188;  Hal- 
lenbeck  w.  Hahn,  2  Neb.  377;  City  v.  Alexander,  23  Mo.  483;  Aurora  v. 
West,  9  Ind.  74;  Prettyman  r.  Supervisors,  19  111.  406;  Butler  v.  Dun- 
ham, 27  111.  474;  Stein  v.  Mobile,  24  Ala.  591;  Benson  v.  Mayor,  24  Barb. 
248;  Duaucsburg  u.  Jenkins,  40  Barb.  579;  Winn  u.  City  of  Macon,  21 
Ga.  275;  County  of  Randolph  v.  Post,  93  U.  S.  502.  It  is  even  permissi- 
ble for  a  municipal  corporation  to  donate  its  bonds  to  a  railroad  company 
■whose  coustniction  promises  to  prove  beneficial  to  the  municipality, 
whether  the  proposed  railroad  was  within  or  without  the  State.  Rail- 
road Company  v.  County  of  Otoe,  16  Wall.  667;  Town  of  Queensbury  v. 
Culver,  19  Wall.  84;  Quincy,  etc.,R.  R.  Co.  v.  Morris,  84  111.  410. 

772 


CH.  XXV.]  COUPON  BONDS.  §  481 

But  while  the  weight  of  authority  recognizes  the  right  of 
the  legishiture  to  grant  this  power  to  municipal  corpora- 
tions, there  are  some  authorities  opposing  this  view  of  the 
majority,  holding  that  the  legislature  cannot  authorize  a 
municipal  corporation  to  contract  debts  in  aid  of  the  con- 
struction of  railroads,  and  other  highways  of  commerce.^ 
The  extravasrance  and  recklessness,  which  have  been  dis- 
played  very  generally  by  municipalities  in  the  exercise  of 
this  power,  have  induced  the  imposition  of  constitutional 
prohibitions  on  the  grant  of  the  power.  And  whenever 
there  is  such  a  provision,  the  exercise  of  the  power  is  of 
course  out  of  the  question,  at  least  as  to  any  future  grant 
of  the  power.  But  if  the  provisions  of  the  constitution 
can,  by  any  reasonable  construction,  be  made  to  apply 
only  to  future  grants  of  power,  the  enforcement  of  them 
will  be  held  not  to  abrogate  any  previous  grant  of  power, 
which  has  not  yet  been  exercised.  Where  that  is  the 
proper  construction,  bonds  issued  subsequently  in  pursu- 
ance of  the  pre-existing  grant  of  authority  will  be  valid, 
notwithstanding  the  constitutional  prohibition.^ 

On  the  other  hand,  where  the  purpose  does  not  have  any 
distinct  public  benefit  in  view,  however  laudable  the  purpose 
may  be,  the  issue  of  bonds  will  be  illegal.  It  is  no  public 
purpose  to  furnish  aid  to  private  individuals  in  case  of  any 


1  People  V.  Township  Board  of  Salem,  20  Mich.  452;  Thomas  v.  Port 
Huron,  27  Mich.  320;  State  v.  Wapello,  13  Iowa,  388  (overruliug  Du- 
buque County  V.  R.  R.  Co.,  4  G.  Greene,  1) ;  Hanson  v.  Vernon,  27 
Iowa,  28. 

2  County  of  Scotland  v.  Thomas,  94  U.  S.  682 ;  County  of  Callaway  v. 
Foster,  93  U.  S.  567;  County  of  Heni-y  v.  Nicolay,  95  U.  S.  619;  County  of 
Schuyler  v.  Thomas,  98  U.  S.  173;  County  of  Cass  v.  Gillette,  100  U.  S. 
585;  Cass  v.  Dillon,  2  Ohio  St.  398;  Snead  v.  Trustees  of  Union  Town- 
ship, 8  Ohio  St.  394 ;  Commissioners  of  Knox  Co.  w.  Nichols,  14  Ohio  St. 
280;  Smith  v.  County  of  Clark,  54  Mo.  58;  The  State  v.  Greene  Co.,  54 
Mo.  540;  State  v.  Sullivan  Co.,  51  Mo.  552;  State  v.  Town  of  Clark,  23 
Minn.  423;  Moultrie  Co.  v.  Fairfield,  105  U.  S.  370. 

773 


§    482  COUPON    BONDS.  [CH.    XXV. 

general  disaster,  coming  from  any  source  whatever.^  Nor 
is  it  a  public  purpose  to  furnish  aid  in  the  establishment  of 
any  private  enterprise,  where  there  is  no  direct  and  distinct 
benefit  to  the  public. ^ 

§  482.  Wbat  defenses  may  be  set  up  against  bona  fide 
holders  of  municipal  bonds. — The  general  principles, 
set  forth  in  a  previous  chapter  ^  on  the  rights  of  bona  fide 
holders,  apply  to  the  bona  fide  holders  of  municipal  bonds  ; 
and  it  will  be  only  necessary  here  to  refer  to  some  par- 
ticular applications  of  those  general  principles . 

In  the  first  place,  if  the  issue  of  the  bonds  by  the  muni- 
cipal corporation  is  without  authority,  ultra  vires,  the  bonds 
will  be  void  even  as  to  bona  fide  holders  who  take  them 
without  actual  notice.*  For,  since  the  limitations  upon 
municipal  powers  are  matters  of  public  law  and  of  public 
record,  the  purchaser,  however  ignorant  of  their  existence, 
may  be  and  is  properly  charged  with  constructive  notice.^ 

^  Lowell  V.  Boston,  111  Mass.  454  (aid  to  rebuild  houses  destroyed  by 
fire)  ;  State  ex  rel.  Griffith  v.  Osawkee  Township,  14  Kan.  418  (to  pro- 
vide food  and  seed  to  destitute  citizens). 

2  Loan  Association  v.  Topeka,  20  Wall.  655  (to  equip  and  furnish 
manufacturing  establishments)  ,  Commercial  Nat.  Bank  v.  lola,  2  Dill. 
C.  C.  353;  9  Kan.  700;  Allen  v.  Inhabitants  of  Jay,  60  Me.  124  (construc- 
tion of  grist  mills);  Township  of  Burlington  v.  Beasley,  94  U.  S.  314; 
Weismer  v.  Village  of  Douglass,  11  N.  Y.  S.  C.  (4  Hun)  211  (to  im- 
prove a  water  privilege  for  the  manufacture  of  lumber). 

3  Chap.  XIV.  on  Rights  of  Bona  Fide  Holders. 

*  Marsh  v.  Fulton  Co.,  10  Wall.  683;  Town  of  South  Ottawa  v.  Per- 
kins, 94  U.  S.  260;  McClurc  v.  Township  of  Oxford,  94  U.  S.  432;  An- 
thony V.  Jasper  Co.,  101  U.  S.  693;  Wells  v.  Supervisors,  102  U.  S.  625; 
Township  of  East  Oakland  v.  Skinner,  94  U.  S.  257;  Town  of  Middle- 
port  V.  iEtua  Life  Ins.  Co.,  82  111.  562;  Wilson  v.  City  of  Shreveport,  29 
La.  673;  Williamson  v.  City  of  Keokuk,  44  Iowa,  88. 

5  Clark  V.  Des  Moines,  19  Iowa,  201;  Gould  v.  Sterling,  23  N.  Y.  463; 

Veeder  v.  Lima,  19   Wis.  298;  Harter  v.  Kernschan,  103  U.  S.  563;  De 

Voss  V.  Richmond,  18  Gratt.  338;  Duanesburg  v.  Jenkins,  40  Barb.  579; 

Backman  v.  Charleston,  42  N.  H.  125;  Bissell  v,  Kankakee,  64  111.  249; 

774 


CH.    XXV.]  COUPON    BONDS.  §    482^ 

This  is  especially  true  where  there  is  a  reference  on  the 
face  of  the  bonds  to  the  statute,  under  which  they  were 
issued.^ 

Where  the  power  is  given,  subject  to  certain  condi- 
tions, and  the  bonds  import  by  recitals  a  compliance  with 
the  requirements  of  the  law,  the  bona  fide  holder  is  not  ob- 
liged to  look  further  for  proof  of  the  performance  or  ob- 
servance of  the  conditions,  whether  they  are  imposed  by 
the  law  or  are  expressly  created  in  the  grant  of  the  power. ^ 
But  in  order  to  bind  the  corporation,  the  recitals  must 
purport   to    come  from   some    officer  or   officers  who  are 

Scott,  J. :  "  The  authority  of  a  municipal  corporation  to  issue  bonds  is 
derived  from  public  laws,  and  the  avenues  to  information  in  regard  to 
the  law  and  ordinances  of  such  corporations  being  open  to  public  in- 
spection, the  holder  of  such  securities  will  be  presumed  to  have  ex- 
amined them,  and  to  have  known  whether  the  corporation  had  the 
requisite  power  to  issue  the  bonds.  He  has  no  such  opportunity  in  re- 
gard to  private  corporations.  Their  by-laws  are  not  open  to  inspection 
by  those  who  deal  in  securities  issued  by  them,  and  hence  the  reason 
for  the  distinction  that  has  been  talien.  The  holder  of  the  bonds  in- 
volved in  this  action  had  every  opportunity  to  know  whether  the  city  had 
any  lawful  right  to  issue  them,  for  the  reason  that  its  authority,  if  any 
existed,  was  to  be  found  in  public  statutes,  and  if  they  did  not  in  fact 
examine,  as  it  was  their  privilege  to  do  before  buying,  they  will  be  pre- 
sumed to  have  done  so,  and  to  have  known  that  they  were  issued  with- 
out authority  of  law,  and  therefore  void  in  the  hands  of  any  holder 
either  with  or  without  notice." 

1  McClure  v.  Township  of  Oxford,  94  IT.  S.  429;  City  of  Aurora  v. 
West,  22  Ind.  89;  Silliman  v.  Fredericksburg,  etc.,  R.  R.  Co.,  27  Gratt 
119;  Fisk  v.  City  of  Kenosha,  26  Wis.  29;  Louisiana  St.  Bank  v.  Orleans 
Nav.  Co.,  3  La.  Ann.  295. 

2  Commissioners  of  Knox  County?'.  Aspinwall,  21  How.  545;  Pendle- 
ton County  V.  Amy,  13  Wall.  305;  Moran  v.  Miami  County,  2  Black,  722; 
Lamed  v.  Burlington,  4  Wall.  27G;  Kenicott  v.  Supervisors,  16  Wall. 
464 ;  Menasha  v.  Hazard,  102  U.  S.  81 ;  Township  of  Rock  Creek  v.  Strong, 
96  tJ.  S.  227;  San  Antonio  v.  Meharty,  96  U.  S.  313;  Pompton  v.  Cooper 
UnjDn,  101  U.  S.  204;  Mercer  Co.  v.  Hackett,  1  Wall.  93;  St.  Joseph 
Township  v.  Rogers,  16  Wall.  659 ;  Bissell  v.  JefEersonville,  24  How.  287; 
Grand  Chute  v.  Winegar,  15  Wall.  377;  Lynde  v.  County,  16  Wall.  6; 
County  of  Warren  v.  Marcy,  97  U.  S.  96;  Commissioners  v.  Bolles,  94 
U.  S.  104;  Commissioners  v.  January,  94  U.  S.  202. 

775 


§    482  COUPON'    BONDS.  [cil.    XXV. 

chargetl  by  the  law,  expressly  or  inferentially,  with  the 
duty  of  ascertaining  the  fact  that  the  conditions  have  been 
properly  performed.^  Where,  however,  a  particular  agent 
is  authorized  to  act  for  the  corporation  upon  the  per- 
formance or  happening  of  certain  conditions,  his  assertion, 
that  the  requirements  of  the  law  have  been  complied  with, 
will  not  be  binding  on  the  corporation,  even  as  against  bona 
fide  holders.^ 

The  failure  of  the  agents  to  observe  the  required  for- 
malities of  execution  and  issue  of  the  bonds,  or  their  fraud 
in  negotiating  them,  cannot  be  set  up  as  a  defense  against  a 
hona  fide  holder.^ 

An  illegal  issue  of  bonds  may  also  be  ratified  by  the 
members  of  the  municipal  corporation.  But  in  order  that 
the  ratification  may  have  the  effect  of  curing  any  illegality 
or  defect  of  title,  it  must  be  made  by  one  who  is  compe- 
tent to  contract;  and  it  must  refer  to  acts  which  the  i:)arty 
ratif3nng  is  competent  to  perform.*  Within  these  limits, 
an  illegal  issue  of  bonds  by  a  municipal  corporation  may 

1  Town  of  Coloma,  92  U.  S.  491 ;  Town  of  Venice  v.  Murdock,  92  U.  S. 
496;  Town  of  Genoa  v.  Woodruff,  92  U.  S.  502;  County  of  Moultrie  v. 
Savings  Bank,  92  U.  S.  631 ;  Marcy  v.  Township  of  Oswego,  92  U.  S. 
C37;  Commissioners  r.  Bolles,  94  U.  S.  104;  Bonliara  v.  Needles,  103  U. 
S.  648;  Lincoln  v.  Iron  Co.,  103  U.  S.  413;  St.  Joseph  Township  r.  Rogers, 
16  Wall.  Co!);  Lyude  v.  County,  16  Wall.  13;  Walnut  i'.  Wade,  103  U.  S. 
683;  Buchanan  v.  Litchfield,  102  U.  S.  291;  Orleans  v.  Pratt,  99  U.  S.  670; 
Commissioners  v.  January,  94  U.  S.  202;  Kenicott  v.  Supervisors,  IG 
Wall.  452;  Bank  of  Rome  v.  Village  of  Rome,  19  N.  Y.  20;  Commissioners 
of  Knox  Co.  V.  Nichols,  14  Ohio  St.  271 ;  Pompton  v.  Cooper  Union,  101 
U.  S. 204. 

2  Gould  V.  Town  of  Sterling,  23  N.  Y.  463;  Treadwell  v.  Com- 
missioners, 11  Ohio  St.  183;  Wallace  v.  Jose,  29  Cal.  188;  Clark  v.  Des 
Moines,  19  Iowa,  201;  Veeder  v.  Lima,  19  Wis.  298;  Starin  v.  Town  of 
Genoa,  23  N.  Y.  440. 

3  Kenicott  v.  Supervisors,  16  Wall.  4G5;  Town  of  East  Lincoln  v. 
Davenport,  94  U.  S.  801;  People  v.  Mead,  24  N.  Y.  114. 

4  Marsh  v.  Fulton  County,  10  Wall.  683;  Boom  v.  City  of  Utica,  2  Barb. 
105. 

776 


CH.  XXV.]  COUPOX    BOXDS.  §    482 

be  ratijSed  in  two  different  ways ;  The  corporation  will  be 
estopped  from  asserting  their  illegality  (1)  by  failing  to 
prevent  their  issue  by  injunction,  and  receiving  and  keep- 
ing the  proceeds  of  the  sale  of  the  bonds  ;  ^  (2)  by  voting 
for,  or  submitting  to,  taxation  to  pay  the  principal  and  in- 
terest of  the  bonds. 2 

1  Supervisors  v.  Schenck,  6  Wall.  581;  County  of  Eandolph  v.  Post, 
93  U.  S.  502 ;  Pendleton  County  u.  Amy,  13  Wall.  305;  Rogers  v.  Burling- 
ton, 3  Wall.  667;  State  v.  Van  Horn,  7  Ohio  St.  331;  State  v.  Trustees 
of  Union  Township,  8  Ohio  St.  403;  Meyer  w.  Muscatine,  1  Wall.  392; 
Comrs.  V.  January,  94  U.  S.  206;  County  of  Ray  v.  Vausycle,  96  U.  S.  687; 
Ferguson  v.  Landram,  5  Bush,  231 ;  Barrett  v.  County  Court,  44  Mo. 
199. 

2  Supervisors  v.  Schenck,  5  Wall.  581;  County  of  Ray  v.  Vansycle,  96 
U.  S.  687;  Hannibal,  etc.,  R.  R.  Co.  v.  Marion  Co.,  36  Mo.  295;  State  v 
Van  Horn,  7  Ohio  St.  331 ;  Shoemaker  v.  Goshen  Township,  14  Ohio  St. 
587;  Leavenworth,  etc.,  R.  R.  Co.  v.  Comrs.  Douglass  Co.,  18  Kan.  170; 
Keithsburg  v.  Frick,  34  111.  421 ;  Mercer  County  v.  Hubbard,  45  111.  142. 

777 


CHAPTER   XXYI. 

CERTIFICATES  OF  DEPOSIT. 

Section  485.  Ovifriu  and  nature  of  certificates  of  deposit. 

486.  Transfer  and  negotiability  of  certificates  of  deposit. 

487.  Overdue  certificates. 

488.  Necessity  for  demand  —  Statute  of  limitations. 

489.  Payment  by  transfer  of  certificate  of  deposit. 

§  485.  Origin  and  nature  of  certificates  of  deposit. — 

A  certificate  of  deposit  is  a  written  acknowledgment  by  a 
bank  or  banker  of  the  receipt  of  a  sum  of  money  on  de- 
posit, which  he  promises  to  pay  to  bearer,  or  to  the  order 
of  the  depositor  or  of  some  other  person.^  Whenever  the 
bank  or  banker  has  the  power  to  execute  and  issue  prom- 
issory notes,  the  power  to  execute  certificates  of  deposit  is 
included, for  they  are  in  fact  nothing  more  than  promissory 
notes. ^  They  are  used,  instead  of  drawing  checks  on  the 
fund  deposited,  whenever  the  depositor  desires  a  continu- 
ing security,  drawing  interest,  and  payable  on  demand  or 
at  some  time  in  the  future.' 

The  certificate  of  deposit  is  supposed  to  have  originated 
with  the  goldsmiths  of  England,  who,  in  the  course  of  their 
banking  business,  were  in  the  habit  of  giving  to  the  de- 
positors receipts  for  the  money  deposited,  in  the  form  of  a 
L    promissory  note.* 

§  486.  Transfer  and  negotiability  of  certificates  of  de- 
posit. —  If  the  certificate  of  deposit  is  payable  to  bearer, 

1  2  Daniel's  Negot.  Inst.,  §  1698. 

2  Morse  on  Banli.  53. 

3  2  Daniel's  Negot.  Inst.,  §  1698. 

4  Nicholson  v.  Sedgwick,  1  Ld.  Raym.  180;  3  Salk.  67. 

778 


CH.  XXVI.]  CERTIFICATES    OF   DEPOSIT.  §    486 

it  may  be,  and  is  usually,  transferred  by  delivery  merely. 
But  if  it  is  made  payable  to  the  order  of  some  one,  it  must 
be  indorsed  by  him,  in  order  to  pass  the  legal  title  ;  and  the 
liability  of  these  indorsers  is  the  same  as  the  indorser  of 
a  bill  of  exchange  or  of  a  promissory  note.^ 

Although  there  are  authorities,  which  deny  the  negotia- 
bility of  certificates  of  deposit, ^  the  great  majority  of  the 
cases  hold  that  certificates  of  deposit  have  all  the  character- 
istics of  negotiability  which  pertain  to  promissory  notes  in 
general.^  But  in  order  that  the  certificate  may  possess  the 
characteristics  of  negotiability,  it  must  contain  all  the 
requisites  of  negotiability  which  are  required  in  the  case  of 
promissory  notes.  The  absence  of  any  one  of  the  requisites 
will  destroy  the  negotiable  character  of  the  certificate  of 
deposit.*  And  the  same  is  true  of  statutory  as  well  as 
of  common-law  requisites.     If   a  statute  makes  additional 

1  Pardee  v.  Fisher,  60  N.  Y.  265;  Vastine  ».  Wilding,  45  Mo.  89;  Gate 
V.  Patterson,  25  Mich.  191;  Hazelton  v.  Union  Bank,  32  Wis.  35;  Ford  v. 
Mitchell,  15  Wis.  304;  Coye  v.  Palmer,  16  Cal.  158;  Mills  v.  Barney,  22 
Cal.  240. 

2  Patterson  v.  Poindexter,  6  Watts  &  S.  227;  Chasnley  v.  Dallas,  8 
Watts  &  S.  353.  See  Lebanon  Bank  v.  Mangan,  28  Pa.  St.  452;  Loudon 
Sav.  Society  v.  Savings  Bank,  36  Pa.  St.  498. 

3  Miller  v.  Austen,  13  How.  218;  Carey  v.  McDougald,  7  Ga.  84; 
Lynch  v.  Goldsmith,  64  Ga.  42;  Bank  of  Orleans  v.  Merrill,  2  Hill,  295; 
Drake  v.  Markle,  21  Ind.  433;  Lafayette  Bank  v.  Ringel,  51  Ind.  393; 
Fells  Point  Sav.  Inst.  v.  Weedon,  18  Md.  528;  Gate  v.  Patterson,  25  Mich. 
191;  Blood  V.  Northrup,  1  Kan.  28;  Frank  v.  Wessels,  64  N.  Y.  155; 
Pardee  v.  Fish,  60  N.  Y.  265;  Howe  v.  Hartness,  11  Ohio  St.  449;  Bank  of 
Peru  V.  Farnsworth,  18  HI.  563;  Laughliu  v.  Marshall,  19  HI.  390;  Kil- 
gore  w.  Bulkley,  14  Gonn.  362;  Bean  u.  Briggs,  1  Glarke  (Iowa),  488; 
Johnson  v.  Barney,  1  Iowa,  531;  Welton  v.  Adams,  4  Cal.  37;  .Mills  ^. 
Barney,  22  Gal.  240;  Brummaginw.  Tallant,  29  Gal.  503;  Poorman  v.  Mills, 
35  Cal.  118;  Fultz  v.  Walters,  2  Montana,  165;  Bellows  Falls  Bank  v. 
Rutland,  40  Vt.  377;  Tripp  v.  Gurteuins,  36  Mich.  494. 

*  Huse  v.  Hamblin,  29  Iowa,  501;  Riadskoff  v.  Barrett,  11  Iowa,  172; 
Ford  V.  Mitchell,  15  Wis.  304;  Lindsay  v.  McClelland,  18  Wis.  481; 
London  S.  G.  v.  Hagerstown  S.  Bank,  12  Casey,  498;  Easton  v.  Hyde,  13 
Minn.  90. 

779 


§488  CERTIFICATES    OF    DEPOSIT.  [CII.   XXVI. 

requisites  for  the  negotiability  of  promissory  notes,  the 
statute  will  apply  to  certificates  of  deposit.^  It  has  also 
been  held  that  the  certiticate  of  deposit  is  not  negotiable,  if 
it  does  not  contain  an  express  promise  to  pay  the  money 
deposited.'^  In  that  case,  the  certificate  of  deposit  is  only 
a  receipt  for  money,  and  not  an  independent  obligation. 

§  487.  Overdue  certificates.  —  Like  all  other  negotiable 
instruments,  the  certificate  of  deposit  must  be  transferred 
before  maturity,  in  order  to  enable  the  transferee  to  claim 
the  superior  rights  of  a  bona  fide  holder.^  If  it  is  overdue, 
Avhen  it  is  transferred,  the  transferee  takes  it  subject  to 
equitable  defenses.*  But  the  certificate  is  not  considered 
overdue,  when  it  is  payable  on  demand,  until  there  has  been 
a  demand  for  payment  and  a  refusal  to  pay.^ 

§  488.  Necessitj^  for  a  demand  —  Statute  of  limita- 
tions. —  It  has  been  held  that  there  is  no  need  to  make  de- 
mand of  payment  on  the  certificate  of  deposit,  even  though 
the  certificate  is  expressed  to  be  payable  "on return  (present- 
ment) of  this  certificate."  Even  in  such  cases,  it  is  the  duty 
of  the  bank  to  hunt  up  the  holder  of  the  certificate,  and 
tender  payment,  in  order  to  save  accruing  interest  and 
costs  .^  But  where  the  certificate  was  "  payable  to  order 
of  himself  on  presentation  of  this  certificate  properly  in- 
dorsed," it  was  held  that  there  was  no  right  of  action, 
until  there  had  been  a  demand.^ 

'  luternational  Bank  v.  German  Bank,  3  Mo.  App.  367. 

2  Hotclikiss  V.  Moshcr,  48  N.  Y.  482. 

■"  See  chapter  on  Rights  of  Bona  Fide  Holders. 

■»  Tripp  V.  Curtenius,  36  Mich.  494;  Coye  v.  Palmer,  16  Cal.  158. 

5  Pardee  v.  Fish,  60  N.  Y.  271,  citing  Jlerritt  v.  Todd,  23  N.  Y.  28; 
Nat.  Bank  of  Ft.  Edward  v.  Washington  Co.  Nat.  Bank,  12  N.  Y.  S.  C, 
(5  Hun)  605.      But  see  contra  Tripp  v.  Curtenius,  36  Mich.  497. 

e  Cate  v.  Patterson,  25  Mich.  191;  Bellows  Falls  Bank  v.  Rutland  Co. 
Bank,  40  Vt.  377,  affirming  Smilie  v.  Stevens,  39  Vt.315;  Hunt  v.  Divine, 
37  111.  137. 

'  Bellows  Falls  Bank  v.  Rutland  Co.  Bank,  40  Vt.  377. 

780 


CH.  XXVI.]  CERTIFICATES    OF    DEPOSIT.  §    489 

It  has  also  been  held  that  the  statute  of  limitations  be- 
gins to  run  from  the  date  of  the  certificate. ^  But  the  bet- 
ter  opinion  is,  that  the  statute  does  not  begin  to  run  until 
there  had  been  a  demand  of  payment,  the  certificate  of 
deposit  being  intended  as  a  continuing  security. ^ 

§  489.  Payment  by  transfer  of  certificate  of  deposit. — 

If  a  certificate  of  deposit  is  transferred  in  payment  of  a 
debt,  it  is  prima  facie  a  conditional  payment  only.^  But 
if  the  creditor  does  not  make  immediate  demand  of  pay- 
ment, and  instead  transfers  it  to  another  in  settlement  of 
some  obligation  of  his  own,  the  payment  becomes  absolute; 
and  the  original  payee  of  the  certificate  is  not  responsible, 
if  the  bank  should  fail  before  demand  of  payment.* 

1  Tripp -!?.  Curtenius,  36  Mich.  499;  Brumraagin  v.  Tallant,  29  Cal.  503. 

2  Hunger  v,  Albany  City  Nat.  Bank,  85  N.  Y.  587;  Pardee  v.  Fish,  60 
N.  Y.  265;  Payne  v.  Gardiner,  29  N.  Y.  146.  See  Howell  v.  Adams,  68 
N.  Y.  314;  Boughtou  v.  Flint,  74  N.  Y.  476;  Fells  Point  Sav.  Inst.  v. 
Weedon,  28  Md.  320;  Bellows  Falls  Bank  v.  Rutland  Co.  Bank,  40  Vt.  377. 

3  Lindsey  v.  McClelland,  18  Wis.  481;  Johnson  tJ.  Barney,  1  Clarke 
(Iowa),  531. 

4  Bower  V.  Hoffmann,  23  Md.  264. 

781 


CHAPTER    XXYII. 

BILLS  OF  LADING. 

Section  491.  Deflnition  aud  nature  of  bills  of  lading. 

492.  Form  and  contents  of  the  bill  of  lading. 

493.  Transfer  of  bills  of  lading — Their  negotiability. 

494.  Effect  of  attaching  bill  of  lading  to   draft  on  vendee  for 

the  purchase  money. 

§  491.  Definition  and  .nature  of    bills  of    lading. — A 

bill  of  lading  is  very  often  called  a  negotiable  instrument.^ 
But,  although  it  does  possess  some  of  the  qualities  of  ne- 
gotiability,^ it  is  not  strictly  one  independently  of  statute, 
and  is  more  properly  described  as  quasi-negotiable.^ 

The  bill  of  lading  may  be  defined  to  be  a  written  ac- 
knowledgment by  a  common  carrier  of  the  receipt  of  cer- 
tain goods  described  therein,  and  an  agreement  to  transport 
them  to  their  place  of  destination,  to  be  there  delivered  in 
o:ood  order  to  the  consignee  or  his  assio^ns.  It  has,  there- 
fore,  a  double  character,  it  being  both  a  receipt  and  contract 
for  the  carriage  of  tlie  goods.*  As  a  receipt,  it  has  be- 
com.e,  under  the  influence  of  commercial  custom,  a  symbol 
of  property,  and  passes  title  to  the  goods  by  delivery  in 

1  Lickbarrow  v.  Mason,  2  T.  R.  G3;  Berkling  v.  Watling,  7  Ad.  &  E. 
22;  Bell  v.  Moss,  5  Whart.  189. 

2  See  post,  § 

3  Gurney  v.  Behrend,  3  E.  &  B.  622;  22  L.  J.  Q.  B.  265;  Blanchard  v. 
Page,  8  Gray,  297;  Davenport  Nat.  Bank  v.  Homeyer,  45  Mo.  145;  Na- 
tional Bank  v.  Merchants'  Nat.  Bank,  91  U.  S.  98;  Barnard  v.  Campbell, 
55  N.  y.  462. 

*  Redfleld  on  Carriers,  §  247;  Knox  v.  The  Nivella,  Crabbe,  534;  1 
Smith  Lead.  Cas.  879  et  seq.;  Haille  v.  Smith,  1  Bos.  &  Pul.  564;  How- 
ard V.  Shepherd,  19  L.  J.  C.  B.  248;  Sanders  v.  Vauzeller,  12  L.  J.  Exch. 
497. 

782 


CH.  XXVII.]  BILLS    OF    LADING.  §    492 

the  same  manner  as  if  the  goods  were  themselves  deliv- 
ered.^ But  so  distinct  and  separate  are  the  two  characters 
of  the  bill  of  lading  according  to  the  common  law,  that  the 
assignee  of  the  consignee  could  sue  the  common  carrier  for 
refusing  to  deliver  the  goods,  called  for  by  the  bill  of 
lading ;  but  he  could  not  recover  damages  of  the  carrier 
for  refusing  to  transport  them,  the  bill  of  lading,  as  an 
agreement  for  the  carriage  of  the  goods,  being  according 
to  the  common  law  non-assignable. ^ 

The  bill  of  lading,  as  a  symbol  of  property  is  exhausted 
and  becomes  extinguished  as  soon  as  the  goods  have  been 
delivered  by  the  common  carrier  to  the  proper  party.  Its 
symbolical  character  is  taken  away  by  the  delivery  of  the 
goods;  and  thereafter  the  owner's  title  to  the  goods  does 
not  rest  upon  the  bill  of  lading,  but  upon  the  possession  of 
the  goods. ^ 

§  492.   Form  and  contents  of  the  bill  of  lading.  — The 

bill  of  lading  is  usually  issued  in  sets  of  three;  one  being 
retained  by  the  common  carrier,  a  second  by  the  consignor, 
and  a  third  to  be  sent  to  the  consignee.  In  case  of  any 
variance  between  them  in  regard  to  terms,  the  contract  is  to 
be  interpreted  according  to  the  terms  of  the  copies  de- 
livered to  the  consignor.  The  copy  kept  by  the  common 
carrier   cannot    control  the  terms   of   the    contract,   since 

1  Gardner  v.  Howland,  2  Pick.  599;  Empire  Trans.  Co.  v.  Steele,  70 
Pa.  St,  190;  Indiana,  etc.,  Bank  v.  Colgate,  4  Daly,  41;  Newhall  v.  Cen- 
tral Pac.  R.  R.  Co.,  51  Cal.  345;  Newsom  v.  Thornton,  6  East,  41;  Mears 
V.  Waples,  3  Houst.  582;  Mower  v.  Peabody,  3  Kern.  121;  Mechanics', 
etc.,  Bank  V.  Farmers',  etc..  Bank,  60  N.  Y.  47. 

2  Haille  v.  Smith,  1  Bos.  &  Pul.  564;  Thompson  v.  Downing,  14  L.  J. 
Exch.  320;  Howards.  Shepherd,  19  L.  J.  C.  P.  248;  Sanders u.  Vanzeller, 
12  L.  J.  Exch.   497. 

2  Hatfleld  v.  Phillips,  9  M.  &  W.  467;  Mottram  v.  Heyer,  5  Denio,  632. 
See  Meyerstein  v.  Barber,  L.  R.  2  C.  P.  661;  36  L.  J.  C.  P.  361;  First 
Nat.  Bank  17.  Kelly,  57  N.  Y.  34;  Heiskell  v.  Farmers',  etc.,  Bank,  89  Pa. 
St.  155. 

783 


§    41)2  BILLS    OF    LADING.  [CH.   XXVII. 

it  is  but  a  mere  memoranduin  in  the  hands  of  the  carrier.' 
But  the  number  of  copies  is  immaterial.  There  may  be 
four  copies  ;^  and  yet  there  need  not  be  more  than  one."^ 

Where  there  are  three  or  more  copies  of  the  bill  of 
lading,  all  the  copies  together  constitute  but  one  contract 
and  but  one  obligation,  so  far  as  the  common  carrier  is 
concerned.  And  if  the  copies  are  transferred  to  different 
parties,  there  can  be  but  one  claim  for  goods  against  the 
carrier.  In  such  a  case,  where  the  equities  are  equal,  the 
carrier  must  deliver  to  the  one  who  first  gets  possession  of 
the  copy  bill  of  lading.* 

The  bill  of  lading  should  contain  a  description  of  the 
quantitj'",  and  condition  of  the  goods  received,  the  marks 
on  the  same,  the  names  of  consignor  and  consignee,  the 
places  of  shipment  and  discharge,  and  the  price  of  the 
freight.  If  any  limitations  upon  the  liability  of  the  com- 
mon carrier  have  been  agreed  upon  between  the  parties, 
they  should  also  be  expressed  in  the  bill  of  lading.  The 
shipper  and  carrier  are  both  bound  by  the  expressed  terms 
of  the  bill  of  lading,  which  is  signed ;  and  its  terms  cannot 
be  varied  by  parol  evidence  of  agreements,  which  are  not 
incorporated  in  the  bill  of  lading.^ 

"Where  the  bill  of  lading  acknowledges  the  receipt  of 
goods  "  in  good  order  and  well  conditioned,"  it  has  refer- 
ence only  to  the  external  condition,  and  is  not  a  guaranty  of 
good  condition  internally.^ 

The  bill  usually  provides  for  the  delivery  of  the  goods  to 

'  The  Thames,  U  Wall.  98. 

2  Lickbarrow  v.  Masou,  2  T.  R.  63. 

■'  Dows  V.  Perriu,  16  N.  Y.  325. 

"•  Lamb  v.  Duraut,  12  Mass.  54;  Stevens  v.  Boston,  etc.,  R.  R.  Co.,  8 
Gray,  262;  1  Smith  Lead.  Cas.  891. 

*  Gage  V.  Morse,  12  Allen,  410;  Germauia  Fire  Ins.  Co.  v.  Memphis, 
etc.,  R.  R.  Co.,  72  N.  Y.  90;  Belger  v.  Dinsmore,  51  N.  Y.  166. 

«  Richards  v.  Doe,  100  Mass.  524;  The  Olbers,  3  Ben.  148;  Hastings  v. 
Pepper,  11  Pick.  43;  The  Oriflamme,  1  Saw.  176. 
784 


\ 


CH.  XXVII.]  BILLS    OF    LADING.  §    493 

a  named  consii2;nee,  the  cousiijuee  beino;  either  the  coDsio;aor 
or  some  one  else.  The  effect  is  the  same,  when  the  con- 
signor has  indorsed  the  bill  to  the  person  for  whom  the 
goods  were  intended,  as  if  the  bill  had  been  originally  made 
out  in  the  name  of  this  latter  person.^  And  where  the 
place  for  the  name  of  the  consignee  is  left  blank,  it  may  be 
subsequently  filled  up  with  the  name  of  any  one  who  law- 
fully gets  possession  of  the  bill  of  lading. ^ 

§  493.   Transfer  of  bill   of  lading  —  Its  negotiability. 

The  bill  of  lading  is  transferable  usually  by  indorsement, 
and  strictly  only  by  the  consignee.^  But  where  the  con- 
signor owns  the  goods  and  ships  them  on  his  own  account, 
the  consignee  is,  in  fact,  then,  only  his  agent,  and  he  can, 
by  his  own  assignment  of  the  bill  of  lading,  give  a  title  to 
the  goods,  which  will  prevail  against  every  one  but  a  hona 
fide  transferee  of  the  consignee.* 

Delivery  of  the  bill  is  as  essential,  to  pass  title  to  the 
goods,  as  the  indorsement.^  And  where  the  goods  are 
made  by  the  bill  deliverable  to  bearer,  or  where  the  bill  of 
lading  has  been  indorsed  in  blank,  the  delivery  of  the  bill, 
without  any  indorsement  or  other  writing,  is  all  that  is 
necessary  to  pass  the  title  to  the  goods. 

Not  only  may  the  indorsement  of  the  bill  of  lading  be 
made  in  blank,  but  it  may  also  be  made  conditional  or  re- 
strictive, and  the  indorsee  takes  it  under  those  circum- 
stances subject  to  the  named  conditions  or  restrictions.^ 

As  has  been  stated  in  a  previous  paragraph  the  bill  of 
lading  is  at  common  law  only  g'Ma.s^-negotiable.  Unlike 
the  bill  of  exchang-e,  the  transferrer  of   a  bill  of   lading 

1  Walley  y.  Montgomery,  3  East,  585. 

2  2  r)auiers  Negot.  Inst.,  §  1736;  Smith  Mercantile  Law,  377. 

3  The  Sally  Magee,  3  Wall.  457. 

<  Conrad  v.  Atlantic  Ins.  Co.,  1  Pet.  445. 

5  Allen  V.  Williams,  12  Pick.  297;  Buffington  v.  Curtis,  15  Mass.  528. 
^  Barrow  v.  Coles,  3  Camp.  92 ;  Walley  v.  Montgomery,  3  East,  585. 

50  785 


§    493  BILLS    OF    LADING.  [CH.  XXVII. 

docs  not  give  any  better  title  to  the  goods  to  his  transferee 
than  what  he  has  himself,  where  he  either  found  or  stole 
the  bill,  or  bought  it  from  one  who  had  found  or  stolen  it; 
and  this  is  the  case  even  where  the  bill  of  lading  was  in- 
dorsed in  blank,  and  transferred  by  delivery  to  an  innocent 
purchaser.^  But  where  the  bill  of  lading  has  been  actually 
transferred  by  the  real  owner,  but  it  was  procured  from 
himthrouo-h  the  fraud  of  the  transferee,  and  the  transferee 
subsequently  sold  it  to  an  innocent  purchaser,  the  bona 
fide  purchaser  obtains  a  good  title  to  the  same,  and  the 
defense  of  fraud  cannot  be  set  up  against  him.^ 

The  bona  fide  transferee  will,  however,  in  taking  the 
bill  of  lading,  defeat  the  vendor's  right  of  stoppage  in 
transitu.  As  long  as  the  consignee  retains  the  bill,  the 
vendor's  right  of  stoppage  in  transitu  still  exists;  but  as 
soon  as  the  bill  of  lading  has  been  transferred  to  a  bona 
fide  holder  for  value,  this  right  is  at  an  end.^  But  the 
right  is  not  destroyed  or  taken  away  by  an  assignment  of 
the  consignee's  title  to  the  goods  in  any  other  way  than  by 
an  indorsement  and  transfer  of  the  bill  of  lading.  In  such 
a  case,  the  assignee  will  take  the  title  of  the  assignor  to  the 
goods,  subject  to  the  vendor's  right  of  stoppage  in  transitu.^ 

It  has  also  been  held  that  the  bona  fide  transferee 
acquires  superior  rights  against  the  common  carrier,  in 
that  the  carrier  cannot  dispute  the  correctness  of  the  ac- 

1  Gurney  v.  Behreud,  2  El.  &  B.  622;  23  L.  J.  Q.  B.  265;  Dows  v. 
Perriu,  16  N.  Y.  333;  Moore  v.  Kobiuson,  62  Ala.  537;  Barnard  v.  Camp- 
bell, 55  N.  r.  462;  Brower  v.  Peabody,  3  Keru.  126;  Shaw  u.  Railroad 
Co.,  101  U.  S.  557;  Emery  v.  Irving  Nat.  Bank,  25  {Ohio  St.  255.  See 
Voss  V.  Robertson,  46  Ala.  483. 

2  Pease  v.  Gloahec,  1  Privy  C.  App.  219 ;  Dows  v.  Greene,  24  N.  Y. 
644. 

3  Lickbarrow  v.  Mason,!  Smith  Lead.  Cas.  895,  896;  Dows  u.  Greene, 
24  N.  Y.  641;  Becker  v.  Hallgarten,  86  N.  Y.  167;  Newhall  v.  Cent.  P. 
R.  R.  Co.,  51  Cal.  345;  Gurney  v.  Behreud,  2  El.  &  B.  622;  Emery  v.  Irv- 
ing Nat.  Bank,  25  Ohio  St.  360. 

*  Holmes  v.  Crane,  2  Pick.  606 ;  Craven  v.  Ryder,  6  Taunt.  433. 
786 


CH.  XXVII.]  BILLS    OF    LADING.  §    493 

knowledgments  contained  in  the  bill  of  lading  even  though 
the  goods,  which  he  acknowledged  in  the  bill  to  have  re- 
ceived, had  never  been  delivered  to  hini.^  But  the  author- 
ities are  divided  on  th'is  subject,  and  we  find  the  weight  of 
authority  in  favor  of  the  proposition,  that  the  carrier  is  not 
bound  on  the  bill  of  lading  issued  by  a  clerk  for  goods, 
which  had  never  been  received  by  the  carrier,  since  the 
clerk  was  not  authorized  to  execute  and  issue  the  bill  of 
lading  except  after  the  goods  had  been  received.  The 
common  carrier,  according  to  the  following  authorities, 
can  set  up  the  defense  that  the  goods  had  never  been  re- 
ceived by  it,  even  against  a  bona  fide  transferee  of  the 
bill  of  lading. 2  But  if  the  goods  are  received  by  the  car- 
rier, the  bill  of  lading  will  be  conclusive  of  any  other 
acknowledgment  which  the  bill  might  contain.^  And 
where  the  bill  is  issued  with  a  guaranty  of  the  quantity,  no 
question  can  be  raised  as  to  that  matter,  since  the  state- 
ments in  the  bill  are  coiiclusive.* 

1  Armour  v.  Mich.  Cent.  R.  R.  Co.,  65  N.  Y.  Ill;  Sioux  City  &  P,  R.  R. 
Co.  V.  First  Nat.  Bank,  10  Neb.  55G;  Savings  Bank  v.  Atcliison,  etc.,  R. 
R.  Co. J  20  Kan.  519.  As  between  tUe  original  parties,  and  except  as  to 
the  bona  fide  transferee,  the  bill  of  lading  is  only  prima  facie  evidence  of 
the  truth  of  its  acknowledgments.  The  Lady  Franklin,  8  Wall.  325 ;  The 
Delaware,  14  Wall.  579;  Sears  v.  Wingate,  3  Allen,  103;  Grace  v.  Adams, 
100  Mass.  505;  Dickenson  v.  Seelye,  12  Barb.  102;  Meyer  v.  Peck,  28  N. 
Y.  590:  Abbe  v.  Eaton,  51  N.  Y.  410;  Bissell  v.  Campbell,  54  N.  Y.  356; 
Bates  V.  Todd,  1  Mood.  &  R.  106;  Cox  v.  Peterson,  30  Ala.  608. 

2  The  Schooner  Freeman  v.  Buckingham,  18  How.  182;  Pollard  v. 
Vinton,  105  U.  S.  (1882)  7;  Grant  v.  Norway,  20  L.  J.  C.  P.  93;  10  C.  B. 
665;  Hubbersty  v.  Ward,  18  Eng.  L.  &  Eq.  551 ;  McLean  v.  Flemming,  L. 
R.  2  S.  App.  128 ,  Coleman  v.  Riches,  29  Eng.  L.  &  Eq.  S23 ;  Hall  v.  Mayo,  7 
Allen,  456 ;  Sears  v.  Wingate,  3  Allen,  103 ;  Bait.  &  O.  R.  R.  Co.  v.  Wilkens, 
44  Md.  11;  Second  Nat.  Bank  v.  Walbridge,  19  Ohio  St.  419;  Union, 
etc.,  R.  R.  Co.  V.  Yeager,  34  Ind.  1;  Louisiana  Bank  v.  Laveille,  52  Mo. 
380;  Fellows  v.  Steamer  Powell,  16  La.  Ann.  316;  Hunt  v.  Miss.  C.  R. 
R.  Co.,  29  La.  Ann.  449;  Dean  v.  King,  22  Ohio  St.  136;  Robinson  v. 
Memphis,  etc.,  R.  R.  Co.,  9  Fed.  Rep.  129. 

•"  Sears  v.  Wingate,  3  Allen,  103. 
<  Bissell  V.  Campbell,  54  N.  Y.  353. 

787 


§    494  BILLS    OV    LADING.  [CH.  XXVII. 

The  character  of  bills  of  lading  is  now  regulated  in  very 
many  States  by  statute,  and  in  some  of  the  States  bills  of 
lading  are  declared  to  be  negotiable  like  other  commercial 
paper.  Under  those  statutes,  the  bill  of  lading  may  be 
expected  to  have  all  the  characteristics  of  bills  of  exchange, 
which  affect  their  negotiability.^ 

§  494.  Effect  of  attaching  bill  of  lading  to  draft  on 
vendee  for  the  purchase  money.  —  Very  often,  for  the 
protection  of  the  vendor,  the  bill  of  lading  for  the  goods 
shipped  is  sent  to  the  vendee,  attached  to  a  bill  of  exchange 
for  the  purchase  money;  the  object  being  to  make  the  pass- 
ing of  title  to  the  goods  contingent  upon  the  honoring  of 
the  bill  of  exchange.  The  transfer  of  the  bill  of  lading,  in 
such  a  case,  is  conditional.  If  it  is  sent  direct  to  the 
vendee  with  an  indorsement  of  the  bill  of  lading  to  the 
vendee,  together  with  a  bill  of  exchange  on  him  for  the 
purchase  money,  the  vendee  does  not  acquire  title  to  the 
goods,  until  he  has  honored  the  bill  of  exchange. ^  And 
this  is  also  true,  where,  as  is  the  more  common  custom,  the 
bill  of  lading  is  attached  to  a  bill  of  exchange  on  the  vendee, 
and  both  are  sent  to  a  correspondent  for  the  collection  of 
the  draft,  and  a  delivery  of  the  bill  of  lading  upon  pay- 
ment of  the  draft.  In  such  cases,  if  the  vendee  is  by  the 
terms  of  the  bill  of  lading  the  consignee,  he  takes  the  goods 
into  his  possession,  subject  to  the  right  of  the  holder  of  the 

1  See  Tiedemau  v.  Ivnox,  53  Md.  G12;  Hale  v.  Milwaukee,  29  Wis.  482; 
Price  V.  Wiscousin  Co.,  43  "Wis.  2G7;  Erie  Dispatch  Co.  v.  St.  Louis  Co., 
d  Mo.  App.  172;  Greenbaum  v.  Me^ibbeu,  10  Bush,  419;  Merchants'  Bauk 
V.  Union  R.  R.  Co.,  09  N.  Y.  373.  In  Shaw  v.  Railroad  Co.,  101  U.  S.  557, 
it  is  held  that  although  bills  of  lading  are  made  by  statute  negotiable  by 
indorsement  and  delivery,  it  does  not  follow  that  they  are  given  every 
characteristic  of  negotiability,  which  bills  of  exchange  possess ;  and  it 
was  there  held  that  the  bona  fide  purchaser  of  a  lost  or  stolen  bill  of  lad- 
ing cannot  claim  any  better  title  than  what  the  finder  or  thief  had. 

-  Shepherd  v.  Harrison,  L.  R.  4  Q.  B.  197;  5  H.  L.  116;  Indiana,  etc., 
Bank  v.  Colgate,  4  Daly,  41;  Marino  Bank  v.  Wright,  48  N.  Y.  1. 
788 


CH.  XXVII.]  BILLS    OF    LADING.  §    494 

bill  of  exchange  to  demand  payment.  The  consignee  must 
honor  the  bill  of  exchange  or  surrender  the  goods. ^  If  the 
carrier  delivers  the  sfoods  to  the  vendee  in  contradiction  of 
the  terms  of  the  bill  of  lading,  i.e.,  where  the  bill  of  lading 
provides  for  the  delivery  of  the  goods  only  on  payment  of  the 
bill  of  exchange,  neither  the  vendee  nor  any  innocent  pur- 
chaser from  him  will  acquire  title  to  the  same;  and  the 
consignee  of  the  bill  of  lading  with  draft  attached  may 
recover  the  goods  from  any  one  who  has  possession  of 
them.^ 

Where  the  bill  of  exchange  is  payable  on  demand  or  at 
siffht,  the  holder  of  the  bill  of  lading  cannot  deliver  it  to 
the  vendee  until  the  bill  of  exchange  is  both  accepted  and 
paid,  provided  that  the  consignor  would  have  had  the  right 
to  withhold  the  bill  of  lading  until  the  purchase  money  had 
been  paid.^  But  where  the  bill  of  exchange  is  payable  in 
the  future,  in  the  absence  of  a  special  agreement,  the  bill 
of  lading  is  to  be  delivered  to  the  vendee  upon  his  accept- 
ance of  the  bill  of  exchange  according  to  its  tenor ;  and  the 
holder  cannot  insist  upon  holding  it  until  the  bill  of  ex- 
change is  paid.     The  drawee  of  the  bill  of   exchange  may 

1  Emery  v.  Irving  Nat.  Bauk,  25  Ohio  St.  255;  Dows  v.  Nat.  Exch. 
Bank,  91  U.  S.  631;  National  Bank  v.  Mercliants' Bank,  91  U.  S.  98; 
Heiskell  v.  Farmers',  etc.,  Bank,  89  Pa.  St.  155.  Tlie  consignee  could 
not  in  that  case  retain  the  purchase  money  in  liquidation  of  a  debt  due 
to  him  by  the  consignor.  Emery  v.  Irving  Nat.  Bank,  25  Ohio  St.  255. 
See  Jenkins  v.  Brown,  14  Q.  B.  496;  Schorman  v.  R.  R.  Co.,  L.  R.  2  Ch. 
App.  336;  Turner  v.  Trustees  Liverpool  Docks,  6  Esch.  543;  EUerslaw  v. 
Magniac,  6  Exch.  570. 

2  Heiskell  v.  Farmers',  etc.,  Bank,  89  Pa.  St.  155.  See  also  Dows  v. 
Nat.  Exch.  Bank,  91  U.  S.  631;  Brandt  v.  Bowlby,  2  B.  &.  Ad.  932;  Sey- 
mour V.  Norton,  105  U.  S.  272;  Stottenwerck  v.  Thacher,  115  Mass.  224; 
Alderman  v.  Eastern  R.  R.  Co.,  115  Mass.  233. 

3  Heiskell  v.  Farmers',  etc..  Bank,  89  Pa.  St.  225;  Bauk  v.  Bayley,  115 
Mass.  228;  Emery  v.  Irving  Nat.  Bank,  25  Ohio  St.  255;  National  Bank 
V.  Merchants  Bank,  100  Mass.  104;  Dows  v.  Nat.  Exch.  Bank,  91  U.  S. 
618;  Marine  Bank  v.  Wright,  48  N.  Y.  1. 

789 


§    404  BILLS    OF    LADING.  [CH.  XXVII. 

refuse  to  accept,  unless  the  bill  of  lading  is  surrendered  to 
him.^ 

1  Laufear  v.  Blossom,  1  La.  Ann.  148;  Marine  Bank  v.  Wright,  48  N. 
Y.  1.  In  National  Bank  v.  Merchant's  Bank,  91  U.  S.  93,  Strong,  J., 
said:  "It  seems  to  be  a  natural  inference,  indeed  a  necessary  implica- 
tion, from  a  time  draft  accompanied  by  a  bill  of  lading  indorsed  in  blank, 
that  the  merchandise  (which  in  this  case  was  cotton),  specified  in  the 
bill  was  sold  on  credit,  to  be  paid  for  by  the  accepted  draft,  or  that  the 
draft  is  a  demand  for  an  advance  on  the  shipment,  or  tjiat  the  transac- 
tion is  a  consignment  to  be  sold  by  the  drawee  on  account  of  the  ship- 
per. It  is  difficult  to  conceive  of  any  other  meaning  the  instrument  can 
have.  If  so,  in  the  absence  of  any  express  agreement  to  the  contrary, 
the  acceptor,  if  a  purchaser,  is  clearly  entitled  to  the  possession  of  the 
goods  on  his  accepting  the  bill,  and  thus  giving  the  vendor  a  completed 
contract  for  payment.  *  *  *  if  the  inference  to  be  drawn  from  a 
time  draft  accompanied  by  a  bill  of  lading  is,  not  that  it  evidences  a 
credit  sale,  but  a  request  for  advances  on  the  credit  of  the  consignment, 
the  consequence  is  the  same.  Perhaps  it  is  even  more  apparent.  It 
plainly  is,  that  the  acceptance  is  not  asked  on  the  credit  of  the  drawer 
of  the  draft,  but  on  the  faith  of  the  consignment.  *  *  *  Nor  can  it 
make  any  difference  that  the  draft  with  the  bill  of  lading  has  been  sent 
(as  in  this  case)  *  for  collection.'  That  instruction  means  simply  to  re- 
but the  inference  from  the  indorsement  that  the  agent  is  the  owner  of 
the  draft.  It  indicates  an  agency." 
790 


CHAPTER    XXYIII. 

SUNDRIES. 

Section  497.  Certificates  of  stock. 

498.  Receiver's  certificates. 

499.  Warehouse  receipts. 

500.  Letters  of  credit  and  circular  notes. 

§  497.  Certificates  of  stock.  — Certificates  of  stock  are 
also  classed  as  quasi-negotiable  instruments.  But  while 
sometimes  the  transferee  takes  a  better  right  in  and  to  the 
certificate  of  stock,  than  what  his  immediate  transferrer  had, 
this  arises  from  the  application  of  other  than  the  principles 
of  negotiability.  Thus,  if  the  owner  of  stock  should  in- 
trust his  agent  with  the  possession  of  his  certificates  of 
stock,  payable  to  bearer,  or  indorsed  in  blank,  any  bona 
fide  purchaser  from  the  agent  would  be  able  to  assert  a  su- 
perior title  to  that  of  the  principal,  although  the  agent  had 
fraudulently  disposed  of  his  property,  and  against  his  ex- 
press instructions.  This  conclusion  is  reached  by  an  ap- 
plication of  the  general  principle  of  agency,  that  the 
principal  is  bound  by  all  the  acts  of  the  agent  which  fall 
within  the  scope  of  his  authority.^ 

1  Johnston  v.  Laflin,  103  U.  S.  800;  Cushman  v.  Thayer  Mfg.  Co.,  76 
N.  Y.  371;  Prallu.  Tilt,  28  N.  J.  Eq.  480;  Mt.  Holly  Turnpike  Co.  v.  Fer- 
ree,  2  C.E.  Green,  117;  Thompson  r.  Toland,  48  Cal.  99;  Wood's  Appeal, 
92  Pa.  St.  379;  Bm'ton's  Appeal,  93  Pa.  St.  214;  Bridgeport  Bank  v.  New 
Yorlr,  etc.,  R.  R.  Co.,  30  Conn.  275;  Uuke  v.  Cahawba  Co.,  10  Ala.  82; 
Fraser  V.  Charleston,  11  S.  C.  486;  Commercial  Bank  w.  Kortright,  22 
Wend.  348;  N.  Y.  &  N.  H.  R.  R.  Co.  v.  Schuyler,  34  N.  Y.  30;  Leitch  v. 
Wells,  48  N.  Y.  585;  Moore  v.  Metropolitan  Nat.  Bank,  55  N.  Y.  41; 
Holbrook  v.  N.  J.  Zinc  Co.,  57  N.  Y.  616;  McNeil  v.  Tenth  Nat.  Bank,  46 
N.  Y.  325;  Burrall  v.  Bushwick  R.  R.  Co.,  75  N.  Y.  220;  Rumball  v. 
Metropolitan  Bank,  2  Q.  B.  Div.  194. 

791 


§    497  SUNDRIES.  [ciI.   XXVIII. 

So,  likewise,  the  purchaser  of  the  certificate  of  stock, 
who  takes  possession  of  the  certificate,  acquires  a  better 
title  than  the  prior  purchaser  of  the  same  certificate,  who 
•makes  the  purchase  by  formal  agreement  or  otherwise, 
without  taking  into  his  possession  the  muniment  of  title, 
in  the  shape  of  the  certificate.  And  this  is  true,  even 
though  there  has  been  a  transfer  of  the  shares  to  the  first 
purchaser  on  the  books  of  the  corporation.^  And,  on  the 
other  hand,  if  the  corporation  should  make  a  transfer  of 
the  shares  on  its  books  to  the  wrong  party,  without  secur- 
ins  a  surrender  of  the  certificate,  it  would  still  be  liable  to 
the  rightful  party  for  the  shares  of  stock  which  his  certifi- 
cate calls  for. 2 

But  the  general  rule  is  that  the  purchaser  of  the  certifi- 
cates of  stock  gets  no  better  title -than  his  vendor  had;  and 
if  stock,  which  is  payable  to  bearer  or  indorsed  in  blank,  is 
stolen  or  found,  and  unlawfully  transferred  to  an  innocent 
purchaser  for  value,  the  real  owner  may  nevertheless  re- 
cover it.^ 

The  customary  requirement  that  the  transfer  shall  be 
made  on  the  books  of  the  company  is  for  the  protection  of 
the  corporation,  and  cannot  affect  the  rights  of  purchasers 
from  the   shareholder,  who  may  acquire,  as  against  every 

1  Driscoll  V.  W.  Bradley,  etc.,  C.  M.  Co.,  59  N.  Y.  96.  See  also  Bank 
V.  Lanier,  11  Wall.  369;  Holbrook  v.  N.  J.  Zinc  Co.,  57  N.  Y.  616.  But 
see  contra  Shropshire  Union  R.  &  C.  Co.  v.  The  Queen,  L,  R.  7  H.  L.  Cas. 
496. 

2  Cushmau  v.  Thayer  Mfg.  Co.,  67  N.  Y.  267;  Bank  v.  Lanier,  1)  Wall. 
369 ;  Smith  v.  Am.  Coal  Co.,  7  Lans.  317. 

3  Bereich  v.  Marye,  9  Nev.  312;  Burton's  Appeal,  93  Pa.  St.  214 
{semhlc)  ;  RailroacU-.  Howard,  7  Wall.  415:  "  Written  contracts  are  not 
necessarily  negotiable  simply  because,  by  their  terms,  they  inure  to  the 
benefit  of  the  bearer.  Doubtless  the  certificates  were  assignable,  and 
they  would  have  been  so  if  the  word  bearer  had  been  omitted,  but  they 
were  not  negotiable  instruments  in  the  sense  supposed  by  the  appel- 
lants. Holders  might  transfer  them  but  the  assignees  took  them  sub- 
ject to  every  equity  in  the  hands  of  the  original  owners." 

792 


CH.  XXVIII.]  SUNDRIES.  §    498 

oiie  but  the  corporation,  an  absolute  right  of  property  in 
the  stock  by  any  of  the  common  methods  of  assignment  of 
choses  in  action.^  But  there  are  authorities  which  hold  that 
only  by  a  transfer  on  the  books  of  the  company,  where 
that  is  the  required  mode  of  transfer,  can  the  purchaser 
claim  a  superior  title  to  the  stock  against  the  creditors  of 
the  transferrer. 2  But,  as  against  the  corporation,  no  trans- 
fer of  a  private  nature  is  valid,  unless  there  has  been  a  cor- 
responding transfer  on  the  books  of  the  corporation,  in 
accordance  with  the  requirement  of  its  by-laws,  or  the 
provisions  of  its  charter.^ 

§  498.  Receivers'  certificates.  —  When  a  railroad  or 
other  property  is  placed  by  the  court,  on  the  application  of 
the  creditors  of  the  owner,  in  the  hands  of  a  receiver,  to 
be  administered  upon  for  the  benefit  of  the  creditors,  sub- 
ject to  the  orders  of  the  court ;  it  is  now  very  common  for 
the  court  to  authorize  the  receiver  to  issue  certificates,  which, 
in  effect,  amount  to  promissory  notes,  obligating  the  re- 

^  Black  V.  Zacharie,  3  How.  483;  Newberry  v.  Detroit,  etc.,  Iron  Co., 
17  Mich.  141;  Bank  of  Utica,  v.  Smalley,  2  Cowen,  770;  Gilbert  v.  Man- 
chester Mfg.  Co.,  11  Wend.  627;  Sargent  v.  Essex  Marine  R.  R.  Co.,  9 
Pick.  202;  Western  v.  Bear  River,  etc.,  Co.,  6  Cal.  425;  Commonwealth  ^7. 
Watmough,  6  Wheat.  139;  Stebbius  v.  Phoenix  Ins.  Co.,  3  Paige,  350; 
Farmers'  Bank  v.  Iglehart,  6  Gill,  50;  Johnson  v.  Underhill,  52 N.  Y.  203; 
Farmers'  Bank  v.  Wasson,  48  Iowa,  338;  Johnston  v.  Lafliu,  103  U.  S. 
804. 

2  Sabin  v.  Bank  of  Worcester,  21  Me.  353;  Foster  v.  Essex  Bank,  5 
Gray,  373;  Pmkertonv.  Manchester,  etc.,  R.  R.  Co.,  42  N.  Y.  424;  People's 
Bank  v.  Gridley,  91  111.  457. 

3  Union  Bank  v.  Laird,  2  Wheat.  390,  Story,  J. :  *'  No  person  can  ac- 
quire a  legal  title  to  any  shares  except  under  a  regular  transfer,  accord- 
ing to  the  rules  of  the  bank ;  and  if  any  person  takes  an  equitable 
assignment,  it  must  be  subject  to  the. rights  of  the  bank  under  the  act  of 
incorporation,  of  which  he  is  bound  to  take  notice."  See  also  Bi'ent  v. 
Bank  of  Washington,  10  Pet.  596;  German  Security  Bank  v.  Jefferson,  10 
Bush,  328 ;  Rogers  v.  Huntington  Bank,  12  Serg.  &  R.  73 ;  Farmers'  Bank 
V.  Iglehart,  6  Gill,  50. 

793 


§    490  SUNDRIES.  [CH.  XXVIII, 

ceiver  to  pay  the  amount  called  for  by  the  certificate  out  of 
any  moneys  in  bis  hands  as  receiver. 

It  has  been  very  generally  held  that  the  receiver's  certifi- 
cates are  not  negotiable,  and  that  the  transferee  takes  them 
subject  to  all  existing  defenses,  although  they  are  made  pay- 
able to  order  or  to  bearer  ;  principally  on  the  ground  that 
the  certificate  is  drawn  on  a  particular  and  uncertain  fund, 
and  does  not  create  against  any  one  any  absolute  and  un- 
conditional liability.^  It  has  been  held  that,  since  receivers 
cannot  issue  certificates  for  any  other  purpose  than  to  raise 
funds,  with  which  to  make  necessary  repairs,  and  cannot 
borrow  money  for  the  purpose  of  building  a  road,  the  cer- 
tificate, issued  for  the  prohibited  purpose,  is  void  in  the 
hands  of  any  one,  if  the  purpose  of  its  issue  is  stated  on 
the  face  of  the  certificate.^ 

§  499.  AVarehouse  receipts.  —  During  the  last  fifty 
years,  grain  of  all  kinds  has  been  handled  by  merchants  in 
bulk;  and,  for  the  more  convenient  transportation  and 
transfer  of   the  same,  it  is  kept  in  bulk  in  public  ware- 

1  "Nearly  every  quality  essential  to  the  negotiability  of  commercial 
paper  is  wanting  in  such  certificates.  In  the  first  place  they  are  not 
payable  unconditionally  out  of  any  fund;  whether,  in  any  event,  they  are 
payable  in  full,  depends  upon  the  question,  whether  the  fund  under  the 
control  of  the  court  is  sufBcient  for  that  purpose.  That  fact  cannot  be 
known  except  upon  inquiry  into  the  amount  of  such  certificates  issued 
by  the  officer  authorized  to  act,  and  as  to  the  value  of  the  fund  to  be  ad- 
ministered. A  bill  of  exchange  is  not  good  when  drawn  payable  out  of  a 
particular  fund  that  is  uncertain  and  contingent.  The  fund  out  of  which 
payment  is  to  be  made  must  be  certain,  as  well  as  the  obligation  of  the 
maker  or  drawer.  Then,  again,  there  is  no  personal  liability  upon  any 
one  for  the  payment  of  such  certificates,  and,  as  we  have  seen,  one 
essential  quality  of  negotiable  paper  is  the  personal  liability  of  the 
maker."  Turner  v.  Peoria,  etc.,  R.  R.  Co.,  95  111.  145,  146.  See  also 
Stanton  v.  Alabama,  etc.,  R.  R.  Co.,  2  Woods  U.  S.  C.  C.  506;  Bank  of 
Montreal  v.  Chicago,  etc.,  R.  R.  Co.,  48  Iowa,  518;  Newbold  v.  Peoria  & 
Springfield  R.  R.  Co.,  5  Brad.  367;  Union  Trust  Co.  v.  Chicago  &  Lake 
Huron  R.  R.  Co.,  7  Fed.  Rep.  513. 

2  Credit  Co.  v.  Arii.  Cent.  R.  R.  Co.,  15  Fed.  Rep.  46. 

794 


CH.  XXVIII.]  SUNDRIES.  §    499 

houses,  called  elevators,  where  all  the  grain  received  is 
stored  in  large  bins  according  to  quality,  and  irrespective 
of  any  prior  ownership.  Upon  receiving  the  grain,  the 
warehouseman  or  elevator  company  issues  documents,  in 
which  the  receipt  of  a  certain  quantity  of  grain  of  a  certain 
quality  and  kind  is  acknowledged,  and  the  promise  is  made 
to  deliver  it  to  the  order  of  the  depositor.  These  warehouse 
receipts  are  taken  by  the  depositor  or  the  exchanges  of  the 
cities  as  the  representative  of  the  grain  itself ;  and  when  the 
grain,  which  they  represent,  is  sold,  the  certificates  are 
transferred  by  indorsement  and  delivery,  or  by  delivery 
alone,  if  made  deliverable  to  bearer  or  indorsed  in  blank. 
And  the  title  to  the  grain  will  be  as  effectually  transferred, 
as  if  the  grain  itself  had  been  delivered. 

In  consequence  of  the  reliance  placed  by  the  mercantile 
world  upon  the  absolute  liability  of  the  warehouseman  on. 
his  receipt,  a  disposition  has  been  manifested  to  apply  the 
principles  of  negotiable  instruments  to  these  receipts  and 
to  give  to  the  bona  fide  holder  the  same  superior  rights 
as  such  a  holder  of  bills  and  notes  has.  And  in  many  of 
the  Stt'tes,  the  same  end  has  been  attained  by  the  enact- 
ment of  statutes.  But  independently  of  statute,  it  is  very 
generally  held  that  the  warehouse  receipt  is  not  a  negotia- 
ble instrument,  the  principal  objection  being  that  the 
warehouse  receipt  calls  for  the  delivery  of  goods,  instead 
of  the  payment  of  money. ^  The  receipt  is  so  far  non-ne- 
gotiable, that  the  warehouseman  is  not  liable  even  to 
a  bona  fide  holder  if  his  agent  has  issued  a  receipt  without 

1  Second  Nat.  Bankw,  Walbriclge,  19  Ohio  St.  419;  Burton  v.  Curyea, 
40  111.320;  Canadian  Bank  v.  McCrea,  40  111.  281  (see  Illinois  Statute 
on  the  subject);  Spangler  v.  Butterfleld,  6  Col.  356;  Solomon  v.  Bush- 
nell,  11  Oreg.  272  (50  Am.  Rep,  475) ;  Durr  v.  Hervey,  44  Ark.  301  (51 
Am.  Rep.  594) ;  Louisville  Bank  v.  Boyce,  78  Ky.42;  Griswold  v.  Haven, 
25  N.  Y.  595.  But  see  Allen  v.  Maury,  66  Ala.  10;  Fourth  Nat.  Bank  v. 
St.  Louis  Compress  Co.,  11  Mo.  App.  333. 

795 


§    500  SUNDRIES.  [CH.  XXVIII. 

getting  possession  of  the  goods. ^  But,  on  the  other  hand, 
if  the  goods  have  been  stored,  and  the  warehouse  receipt 
has  been  rightfully  issued,  the  warehouseman  cannot  de- 
liver the  goods  to  any  one  but  the  lawful  holder  of  the 
receipt;  and  the  warehouseman  is  liable  to  the  holder  of 
the  receipt,  if  the  goods  have  been  delivered  to  any  one 
else,  without  the  production  and  surrender  of  the  receipt 
properly  indorsed. ^ 

The  warehouseman  is  not  a  guarantor  of  the  title  of  prop- 
erty placed  in  his  custody,  although  his  receipts  therefor 
are  by  statute  negotiable.^ 

When  a  warehouseman,  having  in  store  a  quantity  of 
wheat  deposited  by  several  persons,  for  which,  under  the 
statute,  he  issues  receipts  to  each  depositor,  fraudulently 
disposes  of  part  of  the  wheat,  the  receipt-holders  must 
share  in  what  remains  according  to  the  equitable  interest 
of  each,  to  be  ascertained  by  an  accounting.* 

§  500.  Letters  of  credit  and  circular  notes.  —  The  let- 
ter of  credit  is  a  written  assurance  that  the  writer  will  pay 
a  draft  or  drafts  drawn  on  him  to  the  limit  of  the  amount 
stated  in  the  letter  by  the  person  named.  If  the  letter  is 
addressed  to  a  particular  individual  or  individuals,  it  is 
called  a  special  letter  of  credit,  and  no  one  but  the  person 
or  persons  named  can  advance  money  on  the  same,  and  then 
recover  of  the  letter  writer.^     But  if  it  is  not  addressed  to 

1  Second  Nat.  Bank  v.  Walbridge,  19  Ohio  St.  419;  Griswoldv.  Haven, 
25N.  Y.  595;  Burton  v.  Curyea,  40  111.  320;  McBombie  v.  Spader,  3  Thomp. 
&  C.  G90;  1  Ilun,  193.     See  contra  McNiel  v.  Hill,  1  Woolw.  C.  C.  96. 

2  Harris  v.  Bradley,  2  Dill.  C.  C.  284;  Hale  v.  Milwauliee  Dock  Co., 
29  Wis.  492;  Shepardson  t>.  Gary,  29  Wis.  34;  Oral  v.  Philips,  66  111. 
216;  Greenbaum  v.  Majlbben,  10  Bush,  419.  But  see  Mortimorew.  Rags- 
dale,  62  Miss.  86. 

s  Mchanics',  etc.,  Ins.  Co.  v.  Kiger,  103  U.  S.  352. 
*  Daws  V.  Eclsstone,  1  McCrary  C.  C.  434. 

5  Robins  v.  Bingham,  4  Johns.  476;  Walsh  v.  Bailie,  10  Johns.  ISO: 
Taylor  v.  Wilmore,  10  Ohio,  490. 
79H 


CII.  XXVIII.]  SUNDRIES.  §    500 

any  one  in  particular,  it  is  called  a  general  letter  of  credit, 
and  anyone,  by  advancing  money  on  the  faith  of  the  letter, 
may  recover  back  the  same  from  the  letter  writer.^ 

The  circular  note  differs  only  from  a  special  letter  of 
credit,  in  that  it  authorizes  any  one  of  a  list  of  correspond- 
ents in  different  places,  which  are  given  in  the  letter,  to 
advance  money  on  drafts  drawn  on  the  faith  of  the  letter 
of  credit.  This  form  of  letter  of  credit  is  very  commonly 
used  by  tourists  throughout  the  world,  certain  l)anking 
firms  making  a  special  business  of  furnishing  travelers 
with  these  letters  of  credit  or  circular  notes. ^ 

"Where  the  letter  of  credit  authorizes  the  drawing  of  a 
bill  of  exchange  on  the  letter  writer,  it  amounts  to  an  ac- 
ceptance of  such  a  bill,  when  it  is  drawn. ^ 

1  Lawrasou  v.  Mason,  3  Crauch,  492,  Marshall,  C.  J.:  "There  is  an 
actual  assumpsit  to  all  the  world,  and  any  person  who  trusts,  in  conse- 
quence of  that  promise,  has  a  right  of  action."  See  also  to  the  same 
effect  Watson's  Exis.  v.  McLaren,  19  Wend.  565;  26  Wend.  425;  North 
Cumberland  Bank  v.  Eyer,  58  Pa.  St.  102,  103;  Pollock  v.  Helm,  54  Miss. 
1  (28  Am.  Rep.  342)  ;  Boyce  v.  Edwards,  4  Pet.  121;  Adams  v.  Jones,  12 
Pet.  207;  Russell  v.  Wiggin,  2  Story,  213;  Brickhead  v.  Brown,  5  Hill, 
642;  Union  Bank  v.  Coster,  3  N.  Y.  214;  2  Denio,  375. 

2  2  Parsons'  N.  &  B.  109. 

3  Agra  V.  Masterman's  Bank,  2  L.  R.  Ch.  App.  297;  In  re  Blakely  Co., 
3  L.  R.  Ch.  App.  154;  Areuts  v.  Commonwealth,  18  Gratt.  769;  Bissell  v. 
Lewis,  4  Mich.  450;  Ulster  Co.  Bank  v.  McFarland,  5  Hill,  434;  Nelson  v. 
First  Nat.  Bank,  48  111.  39.  But  see  contirc  Boyce  v.  Edwards,  4  Pet.  11 ; 
Schimmelpennick  v.  Bayard,  1  Pet.  264;  Coolidge  v.  Payson,  2  Wheat.  66; 
where  it  is  held  that  the  letter  writer  cannot  be  sued  as  acceptor,  iinless 
the  letter  of  credit  specifically  describes  the  bill  which  has  been  drawn. 
See  also  ante,  §  226  on  the  effect  of  agreements  to  accept. 

797 


CIIAPTEK    XXIX. 

CONFLICT  OF  LAWS  IN  RELATION  TO  COMMERCIAL  PAPER. 

Section  506.  General  principles. 

507.  What  law  governs  the  liability  of  maker,  drawer  and  ac- 

ceptor. 

508.  What  law  governs  the  liability  of  indorsers. 

509.  What  law  governs  formalities  in  respect  to  presentment, 

protest  and  notice. 

510.  Law  applicable  to  stamps  on  commercial  paper. 

511.  Law  relating  to  payment,  interest  and  damages. 

§  506.  General  principles.  —  In  order  to  carry  out  the 
intentions  of  the  parties  to  'legal  transactions,  their  con- 
tracts and  other  transactions  must  be  construed  in  the 
li'ght  of  that  law,  which  the  parties  themselves  had  in  con- 
templation. And  although  laws  have  not,  proprio  vigore, 
any  extra-territorial  effect,  they  are  given  such  effect,  by 
international  comity,  in  order  that  the  intentions  of  the 
parties  may  be  effectuated.  When  a  court  undertakes  to 
enforce  a  foreign  law,  because  the  parties  to  the  suit  had 
assumed  obligations  in  contemplation  of  that  law,  it  is  sim- 
ply giving  a  special  application  to  the  general  rule  of  con- 
struction, that  that  construction  must  prevail  which  will  best 
carry  out  the  intentions  of  the  parties. 

But  the  courts  are  not  bound  to  recognize  in  every  instance 
the  application  of  foreign  laws  to  the  cause  at  issue.  It  is 
nothing  more  than  a  matter  of  comity ;  and  if  the  foreign 
laws  sanction  what  is  an  offense  against  domestic  morals 
and  public  policy,  they  will  not  be  enforced  by  the  courts, 
in  the  settlement  of  any  cause  of  action.^ 

^  Forbes  v.  Cochrane,  2  Barn.  &  C  448;  Armstrong  r.  Toler,  11  Wheat. 
258;  Mahorner  v.  Hooe,  9  Sm.  &  M.  247;  Ohio  Ins.  Co.  v.  Edmundson,  5 
798 


4 


CH.  XXIX.]  CONFLICT    OF    LAWS.  §    50G 

But  the  courts  do  not  take  judicial  notice  of  the  laws  of 
other  countries.  When  they  are  relied  upon  in  the  prose- 
cution of  a  suit,  they  must  be  proved  like  any  other  fact ; 
otherwise  the  foreign  law  will  be  presumed  to  be  the  same 
as  the  law  of  the  forum. ^  And  where  there  has  been  a 
separation  of  two  countries,  which  were  once  subject  to  the 
same  government  and  to  the  same  laws,  the  courts  will 
presume,  in  the  absence  of  proof  to  the  contrary,  that  the 
same  rules  of  law  prevail  in  both  countries  which  were  in 
force  before  the  separation. ^ 

Only  those  general  rules  will  be  stated  here,  which  have 
application  to  commerce.  In  carrying  out  this  proposition, 
we  find  the  most  important  rule  to  be  that  the  law  of  the  place 
where  the  contract  was  made  governs  the  interpretation 
and  construction  of  the  contract.  And  a  contract  is  to  be 
enforced  everywhere,  as  it  appears  in  the  light  of  the  lex 
loci  contractus.^     It  is,  however,  not  the  law  of  the  place 

La.  295;  Pearsall  v.  Dwight,  2  Mass.  84;  Donovan  v.  Pitcher,  53  Ala.  411; 
Robinson  v.  Bland,  2  Burr.  1077^  Wilmot,  J. :  "  In  many  countries  a 
contract  may  be  maintained  by  a  courtesan  for  the  price  of  the  prostitu- 
tion, and  one  may  suppose  an  action  to  be  brought  here  upon  such.a  con- 
tract, which  arose  in  such  a  country.  But  that  would  never  be  allowed 
in  this  country." 

1  Hunti;.  Adams,  44  N.  Y.  27;  Fouke  v.  Fleming,  13  Md.  392;  Legg 
V.  Legg,  8  Mass.  100;  Harper  v.  Hampton,  1  Harr.  &  J.  687;  Martin  v. 
Martin,  1  Smed.  &  M.  176;  Hill  v.  Wilker,  41  Ga.  449;  Kuenzi  v.  Elvers, 
14  La.  Ann.  391;  Dunn  v.  Adams,  1  Ala.  529;  Whiddeu  v.  Seelye,  40  Me. 
247;  Bean  v.  Briggs,  4  Iowa,  467;  Bernard  ■?;.  Barry,  1  Greene  (Iowa), 
:388. 

2  O'Rourke  v.  O'Rourke,  43  Mich.  58;  Flats  v.  Mulhall,  72  Mo.  622; 
Dickinson  v.  Hoomes,  8  Gratt.  408;  Arayo  v.  Currill,  1  La.  541.  See 
Hill  V.  Wilker,  41  Ga.  449. 

2  Evans  v,  Anderson,  78  111.  558;  Faut  v.  Miller,  17  Gratt.  47;  Palmer 
V.  Yarrington,  1  Ohio  St.  253;  Smith  u.  Mead,  3  Conn.  253;  Ansted  t'. 
Sutter,  30  111.  164;  Van  Shaick  v.  Edwards,  2  Johns.  Gas.  355;  Robinson 
V,  Bland,  2  Burr.  1077;  Hyde  v.  Goodnow,  3  Comst.  266;  Ford  v.  Buck- 
eye Ins.  Co.,  6  Bush,  133;  Andrews  r.  Pond,  13  Pet.  65;  Andrews  v. 
Herriott,  4  Cow.  510;  Thayer  t;.  Elliott,  16  N.  H.  102;  Pearsall  v.  Dwight, 
2  Mass.  84;  Eanaga  v.  Taylor,  7  Ohio  St.  134;  Moore  v.  Clopton,  22  Ark. 

799 


§    5()()  CONFLICT    OF    LAWS.  [CH.  XXIX. 

■where  the  contract  was  signed,  or  executed,  })ut  the  law  of 
the  phice  where  the  contract  was  consummated  by  delivery 
or  otherwise,  which  governs  the  construction  of  the  con- 
tract.^ But  a  contract  is  presumed  to  have  been  delivered 
or  otherwise  consummated  in  the  place  of  its  date ;  and, 
although,  as  between  the  original  parties,  it  may  be  shown 
that  the  contract  had  been  completed  elsewhere,  the  pre- 
sumption that  the  place  of  the  date  is  the  place  of  the  con- 
tract becomes  conclusive,  at  least  to  subsequent  holders  of 
commercial  jiaper,  who  take  the  paper  without  notice  of 
the  real  place  of  execution.^ 

This  general  rule  is  modified  by  two  other  rules  as  fol- 
lows :  — 

(1.)  If  the  contract  is  made  in  one  place,  and  it  is  agreed 
to  be  performed  in  another  place,  the  law  of  the  place  of 
performance,  instead  of  the  lex  loci  contractus,  will  govern 

125;  Mason  v.  Dousay,  35  111.  424;  Scudder  v.  Uuion  Nat.  Bank,  91  U.  S. 
400. 

1  Preese  v.  Browuell,  35  N.  J.  L,  280;  Campbell  v.  Nichols,  33  N.  J.  L 
81;  Guy  t/.Eainey,  89  111.  221;  Hart  v.  Wills,  52  Iowa,  50;  Hyde  v.  Good- 
no  w,  3  Comst.  200;  Fant  v.  Miller,  17  Gratt.  47;  Overton  v.  Bolton,  9 
Heisk.  702;  La-wreuce  v.  Bassett,  5  Allen,  140;  Cook  u.  Moffat,  5  How. 
295;  Davis  y.  Coleman,  7  Ired.  435;  Whiston  v.  Stodder,  8  Mart.  (La.) 
95;  Cook  v.  Litchfield,  5  Sand.  330;  Davis  v.  Clemson,  6  McLean,  622; 
Bell  V.  Packard,  G9  Me,  105;  Stanford  ??.  Pruet,  27  Ga.  243;  Gay  v.  Eainey, 
89  111.  221.  In  First  Nat.  Bank  v.  Morris,  1  Ilnn,  680,  it  was  held  that 
if  a  bill  is  accepted  in  New  York  for  the  accommodation  of  the  drawer 
who  resides  and  negotiates  the  bill  in  Massachusetts,  the  Massachusetts 
law  governs  and  not  the  New  York  law.  See  also  Bank  of  Georgia  v. 
Lewin,  45  Barb.  340;  Bowen  v.  Bradley,  9  Abb.  (n.  s.)  395.  But  see  con- 
tra Jewell  V.  Wright,  30  N,  Y.  259. 

2  Lemig  v.  Ealston,  23  Pa.  St.  139,  Lewis,  J. :  "  It  bore  the  dress  of 
a  bill  of  exchange  drawn  in  Pennsylvania ;  and  upon  the  principle  that 
every  one  is  presumed  to  produce  all  the  consequences  to  which  his  acts 
naturally  and  necessarily  tend,  the  presumption  is  that  the  defendants 
intended  that  the  purchasers  of  it  should  receive  it  under  the  belief  that 
it  was  a  bill  drawn  in  Philadelphia  in  the  usual  cour,se  of  business." 
The  bill  was  negotiated  in  London.  See  also  to  same  effect,  Snaith  v. 
Mingay,  1  Maule  &  Sel.  87;  Nat.  Bank  y.  Smoot,  1  McArth.  371;  Barker 
V.  Sterne,  9  Exch.  684. 

«00 


CH.  XXIX.]  CONFLICT    OF    LAWS.  §    506 

the  contract.^  If  a  contract  is  perforniable  in  part  in  one 
place,  and  in  part  in  another,  each  part  will  be  governed  by 
the  IstW  of  the  place  in  which  it  is  performable.-  But  the 
place  of  payment,  in  the  absence  of  express  statements  to 
the  contrary,  is  presumed  to  be  the  same  as  the  place  where 
the  contract  was  made.^  However,  where  both  parties  are 
in  transitu  at  the  place  where  the  contract  is  made,  the 
place  of  paj^ment  will  be  presumed  to  be  the  domicil  of  the 
obligor.*  But  if  only  one  of  the  parties  is  in  transitu,  the 
place  of  payment  will  be  presumed  to  be  where  the  con- 
tract was  made.^ 

(2.)  Everything  relating  to  the  remedy  is  determined  by 
the  law  of  the  forum,  the  place  where  the  action  is  brought, 
and  not  by  the  law  of  the  place  where  the  contract  was 
made  or  to  be  performed.®     But  whenever  any  question, 

'  AndreTVS  v.  Pond,  13  Pet.  65;  Belle  v.  Bruen,  1  How.  182;  Prentiss 
V.  Savage,  13  Mass.  23;  Smith  v.  Mead,  3  Conn.  253;  Hyde  v.  Goodnow, 
3  Comst.  266;  Thompson  v.  Ketchum,  4  Johns.  285;  Blodgett  v,  Durgin, 
32  Vt.  361;  Hunt  v.  Standart,  15  Ind.  83;  Woodrug  v.  Hill,  116  Mass. 
310;  Strieker  u.  Tinkham,  35  Ga.  176;  Goddin  v.  Shipley,  7  B.  Mon.  575; 
Fanning  v.  Consequa,  17  Johns.  511;  Chapman  v.  Robertson,  6  Paige, 
627;  Robinson  v.  Bland,  2  Burr.  1077;  Thorp  v.  Craig,  10  Iowa,  461; 
Freese  v.  Brownell,  35  N.  J.  L.  285;  Freeman's  Bank  v.  Ruckman,  16 
Gratt.  126. 

-  Pomeroy  v.  Aiusworth,  22  Barb.  118;  Young  v.  Harris,  14  B.  Mon. 
556. 

3  Blodgett  V.  Durgin,  32  Vt.  361;  Short  v.  Trabue,  4  Met.  (Ky.)  299; 
Todd  V.  Bank  of  Ky.,  3  Bush,  626;  Wilson  v.  Lazier,  11  Gratt.  477; 
Backhouse  v.  Selden,  29  Gratt.  586 ;  Thompson  v.  Ketchum,  8  Johns. 
189;  4  Johns.  285. 

4  Vanzant  v.  Arnold,  31  Ga.  210;  Wharton's  Confl.  of  Laws,  §  402. 
See  Bullard  v.  Thompson,  35  Tex,  318. 

'"  Foden  V.  Sliarp,  4  Johns.  188.  See  Grimshaw  v.  Bender,  6  Mass. 
157. 

6  Who  may  sue,  Foss  v.  Nutting,  14  Gray,  484 ;  Goodwin  v.  Jones,  3 
Mass.  514;  Stearns  v.  Burnham,  5  Greeul.  261;  Fisk  v.  Brackett,  32  "Vt. 
798;  Folcett  v.  Ogden,  1  H.  Bl.  135^  Statute  of  limitations,  Clark  v.  Con- 
ner, 2  Strobh.  346;  Mineral  Point  R.  R.  Co.  v.  Barron,  83  111.  367;  Nicolls 
V.  Rodgers,  2  Paine  C.  C.  437;  British  Linen  Co.  v.  Drummond,  10  B.  & 
C.  903;    Williams  v.  Jones,  13  East,  439;   Jones  v.  Hook,  2  Rand.  303. 

51  801 


§    507  CONFLICT    OF    LAWS.  [CH.  XXIX. 

V 

apparently  pertaining  to  the  lemedy,  raises  an  inquiry  into 
the  nature  and  validity  of  the  substantive  rights  of  the 
parties  to  the  contract,  then  it  is  to  be  determined  by  the 
law  of  the  place  where  the  contract  was  made  or  to  bo 
performed,  and  not  by  the  law  of  the  forum. ^ 

Inasmuch  as  commercial  instruments,  with  their  accept- 
ances, guaranties  and  indorsements,  constitute  an  aggrega- 
tion of  contracts,  instead  of  being  only  one  contract;  the 
application  of  these  general  principles  to  them  requires  a 
more  detailed  consideration. 

§  507.  What  law  governs  the  liability  of  maker,  drawer 
and  acceptor.  — It  is  plain  that  the  obligation  of  the  maker 
of  a  note  is  governed  by  the  law  of  the  place  where  the 

Action  may  be  brought,  although  it  is  already  barred  by  the  statute  of 
limitation  of  the  locus  contractus.  Bulger  v.  Roche,  11  Pick.  30; 
Putnam  v.  Dike,  13  Gray,  535;  Huber  v.  Steiner,  2  C.  &  M.  629; 
Power  V.  Hathaway,  43  Barb.  214;  Estes  v.  Kyle,  Meigs,  34.  But 
see  contra  Harrison  v.  Stacy,  6  Rob.  (La.)  15;  Goodman  v.  Munks, 
8  Port.  (Ala.)  89.  The  form  of  action,  Bank  of  United  States  v. 
Donally,  8  Pet.  361 ;  Le  Roy  v.  Beard,  8  How.  451 ;  Douglass  v.  Oldham, 
6  N.  H.  150;  Warren  v.  Lynch,  5  Johns.  239;  Thrasher  v.  Everhart,  3 
Gill  &  J.  319;  Williams  V.  Haynes,  27  Iowa,  251;  Andrews  i;.  Herriott, 
4  Cow.  508;  Steele  v.  Carle,  4  Dana,  381.  Questions  of  evidence,  Bain  v. 
Whitehaven,  etc.,  R.  R.  Co.,  3  H.  L.  Cas.  1;  Downer  ».  Cheesebrough,  36 
Conn.  39;  Leroux  v.  Brown,  12  C.  B.  801;  14  Eng.  L.  &  Ex.  247.  Pro- 
cess, Dela  Veda  v.  Vianna,  1  B.  &  Ad.  284;  Smith  v.  SpinoUa,  2  Johns. 
198;  White  V.  Canfleld,  7  Johns.  117;  Licard  v.  Whale,  11  Johns.  194; 
Peck  V.  Hozier,  14  Johns.  346;  Hindley  v.  Marean,  3  Mason,  90.  But  see 
contra  Melum  v.  Fitzjames,  1  B.  &  P.  133;  Talleyrand  v.  Boulanger,  3 
Ves.  jr.  447.  Set-off  and  other  defenses,  which  do  not  involve  a  con- 
sideration of  the  nature  and  validity  of  the  contract.  Gibbs  v.  Howard, 
2  N.  n.  29G;  Bank  of  Gallipolis  v.  Trimble,  6  B.  Mon.  GOO;  Mineral  Point 
R.  R.  Co.r.  Barron,  8.3  111.  367;  Bliss  v.  Houghton,  13  N.  H.  126. 

1  Any  right  or  defense  issuing  out  of  the  negotiable  character  of  the 
instrument,  Trimbey  v.  Vigmer,  1  Bing.  N.  C.  159;  Lee  v.  Selleck,  33 
N.  Y.  61.");  O'Callaghan  v.  Thomond,  3  Taunt.  82;  Woodruff  v.  Hill,  116 
Mass.  310;  Harrison  v.  Edwards,  12  Vt.  651;  Allen  v.  Bratton,  47  Miss. 
129.  The  number  of  attesting  witnesses,  Wharton's  Confl.  of  Laws,  § 
769.  The  effect  of  the  evidence,  Mason  v.  Dausar,  35  111.  424. 
802 


CH.  XXIX.]  CONFLICT    OF    LAWS.  §    507 

note  is  made  or  to  be  performed.^  The  acceptor's  liability, 
being  dependent  upon  his  acceptance,  is  governed  by  the 
law  of  the  place  where  he  accepts  the  bill,  when  no  other 
place  of  payment  is  specified.  If  there  be  no  expressed 
place  of  payment,  the  bill  is  payable  in  the  place  where  it 
was  accepted ;  but  if  a  different  place  of  payment  is  speci- 
fied in  the  bill,  then  the  liability  of  the  acceptor  is  governed 
by  the  law  of  the  place  of  payment. ^  And  the  same  rule 
holds  good,  where  a  promise  to  accept  is  made  and  com- 
municated to  the  other  parties,  before  the  bill  is  drawn. 
The  acceptance  is  governed  by  the  law  of  the  place  where 
the  bill  is  accepted.' 

The  drawer's  liability,  it  being  a  guaranty  that  the  drawee 
will  accept  and  pay  the  bill,  will  be  governed  by  the  law  of 
the  place  where  the  bill  was  drawn.  Although  the  bill  was 
primarily  payable  elsewhere,  the  drawer's  secondary  liabil- 
ity was  to  pay  where  the  bill  was  drawn.* 

1  Chartres  v.  Cairnes,  16  Mart.  (La.)  1;  Stacy  v.  Baker,  1  Scam.  417; 
Wilson  V.  Lazier,  11  Gratt.  482;  Yeatmau  v.  Cullen,  5  Blackf.  241;  Brabs- 
ton  V.  Gibson,  9  How.  263;  Harrison  v.  Edwards,  12  Vt.  648;  Lawrence 
V.  Bassett,  5  Allen,  140. 

2  Musson  V.  Lake,  4  How.  262;  Wilde  v.  Sheridan  21  L.  J.  E.;Q.  B. 
260;  Bright  v.  Judson,  47  Barb.  29;  Frazier  v.  Warfield,  9  Smed,  &  M. 
220;  Don  V.  Lipman,  5  Clarke  &  F.  1;  Worcester  Bank  v.  Wells,  8  Mete. 
107;  Lizardie  v.  Cohen,  3  Gill,  430;  Boyce  v.  Edwards,  4  Pet.  Ill;  Freese 
V.  Brownell,  35  N.  J.  L.  286;  Everett  v.  Vendryes,  19  N.  Y.  436;  Duer- 
son's  Admr.  v.  Alsop,  27  Gratt.  241;  Bainbridge  v.  Wilcocks,  1  Bald.  536; 
Cooper  V.  Earl  of  Waldergrave,  2  Beav.  282;  Lewis  v.  Owen,  4  B.  &  Aid. 
654;  Todd  v.  Bank  of  Ky.,  3  Bush,  626. 

3  Russell  V.  Wiggin,  2  Story,  230;  Bissell  v.  Lewis,  i  Mich.  459;  Car- 
negie V.  Morrison,  2  Mete.  397.  But  see  contra  Lonsdale  v.  Lafayette 
Bank,  18  Ohio,  142.  "The  letter  (of  credit)  is  dated  New  Orleans 
(Louisiana) ,  and  the  acceptances  were  to  be  there ;  but  the  contract  was 
closed  in  Cincinnati  (Ohio) ;  the  bills  were  to  be  drawn  and  indorsed 
there ;  the  money  upon  them  to  be  obtained,  and  the  produce  brought 
there.  With  such  a  state  of  facts  we  suppose  that  Ohio  furnishes  the 
law  of  the  contract. 

*  Everett  v.  Vendryes,  19  N.  Y.  436;  Raymond  v.  Holmes,  11  Texas, 
55;  Lennig  v.  Ralston,  22  Pa.  St.  137;  Bank  of  U.  S.  v.  U.  S.,  2  How.  711; 

803 


§    508  CONFLICT    OF    LAWS.  [CH,  XXIX, 

§  508.  What  law  governs  the  liability  of  an  indorser. — 

Since  the  indorser  makes  a  new  contract,  —  is  said  by  in- 
dorsement to  draw  a  new  bill  on  the  maker  of  a  note  or 
the  drawee  of  a  bill,  —  the  liability  of  the  indorser  is  de- 
termined by  the  law  of  the  place  where  the  indorsement 
was  made.i  In  consequence  of  this  ruling,  we  may  have 
each  successive  indorsement  governed  by  a  different  law 
and  different  conclusions  reached  on  the  same  state  of  facts. 
"  Thus,  if  a  bill  be  drawn  or  note  made  in  one  State  and 
indorsed  successively  in  several  others,  the  indorser  in  one 
State  may  be  merely  liable  as  a  surety;  ^  in  another,  he 
may  not  be  liable  until  the  holder  has  exhausted  his  rem- 
edy against  the  acceptor  or  maker ;  ^  while,  in  a  third,  he 
may  be  liable  according  to  the  general  principle  of  the  law 
merchant,  immediately  upon  due  notice  of  dishonor.*  Al- 
though this  ruling  is  supported  by  an  almost  unbroken  line 
of  authorities,  it  has  been  very  warmly  opposed  by  some 
law  writers,  on  the  ground  that  the  liability  of  the  drawer 

Allen  V.  Kemble,  6  Moore  P.  C.  3U;  Gibbs  v.  Fremont,  20  Eng.  L.  &  Eq. 
555;  9  Exch.  25;  Bailey  v.  Heald,  17  Texas,  102;  Freese  v.  Brownell,  35 
N.  J.  L.  28G;  Hunt  v.  Standart,  15  Ind.  33;  Kiienzi  v.  Elvers,  14  La.  Ann. 
391;  Price  v.  Page,  24  Mo.  67;  Bonedon  v.  Page,  24  Mo.  595:  Page  v. 
Page,  24  Mo.  596;  Crawford  v.  Branch  Bank,  6  Ala.  15;  Wood  v.  Gibbs, 
35  Miss.  5G0;  Musson  v.  Lake,  4  How.  262;  Roquette  v.  Overman,  16  Q. 
B.  L.  R.  525;  Duerson's  Admr.  v.  Alsop,  27  Gratt.  241. 

1  Lee  V.  Selleck,  33  N.  Y.  615;  32  Barb.  522;  Williams  v.  Wade,  1  Mete. 
82;  Dnndas  v.  Bowler,  3  McLean,  400;  Slocura  v.  Pomeroy,  6  Cranch, 
221;  Short  r.  Trabue,  4  Mete.  (Ky.)  299;  Trabue  v.  Short,  5  Cold.  293; 
Tradue  v.  Short,  18  La.  Ann.  257;  Greathead  v.  Walton,  40  Conn.  226; 
Cook  V.  Litchtield,  5  Seld.  280;  5  Sandf.  330;  Hyde  v.  Goodnow,  3  Comst. 
270;  Dow  v.  Rowell,  12  N.  H.  49;  Aymar  v.  Sheldon,  12  Wend.  448;  Nat. 
Bank  of  Michigan  v.  Green,  33  Iowa,  140;  Yeatman  v.  Cullen,  5  Blackf. 
240;  Canton  v.  Barnes,  50  Ala.  403;  Musson  v.  Lake,  4  How.  262. 

2  Ingersoll  v.  Long,  4  Dev.  &  Bat.  293. 

3  Violett  V.  Patton,  5  Cranch,  142;  Williams  !?.  Wade,  1  Mete.  82; 
Trabue  v.  Short,  18  La.  Ann.  257;  Hunt  v.  Standart,  15  Ind.  33;  Howell  v. 
Wilson,  2  Blackf.  418;  Slocura  v.  Pomeroy,  6  Cranch,  221. 

<  McDonald  v.  Bailey,  14  Me.  101. 
804 


CH.  XXIX.]  CONFLICT   OF   LAWS.  §    508 

and  indorser  should  be  uniform  with  that  of  the  maker  or 
acceptor."  ^ 

But  the  following  distinction  is  to  be  made  in  this  con- 
nection, viz. :  that  it  is  only  the  new  liability  created  by  the 
indorsement  which  is  governed  by  the  law  of  the  place  of 
indorsement. 2  In  other  words,  the  liability  of  the  indorser 
to  his  indorsee,  in  the  character  of  an  indorser,  is  deter- 
mined by  that  law.  But  the  rights  of  the  transferee  or  in- 
dorsee against  the  original  parties  to  the  instrument  are 
determined  by  the  law  of  the  place  where  the  contract  was 
made  or  to  be  performed.  Each  successive  holder  of  a 
commercial  instrument  has  the  same  rights  against  the 
acceptor  or  maker,  it  matters  not  where  the  transfers  were 
made.  These  right  are  determined  by  the  lex  loci  contrac- 
tus vel  solutionis  .^ 

1  1  Daniel's  Negot.  Inst.,  §  901;  2  Kent's  Com.  459,  460;  2  Parsons' 
N.  &  B.  347;  Shaukliu  v.  Cooper,  8  Ind.  42,  overruled  by  Hunt  v.  Stand- 
art,  15  Iml.  33.  See  Kaymond  v.  Holmes,  11  Tex.  60;  Mullen  v.  Morris, 
2  Barr.  87. 

2  Bank  of  U.  S.  v.  Donally,  8  Pet.  361 ;  Nichols'  Ex.  v.  Porter,  2  Hagans, 
13;  Carlisle  «,  Chambers,  4  Bush,  269;  Lee  v.  Selleck,  33  N.  Y.  615;  32 
Barb.  522. 

3  Robertson  v.  Burdekin,  1  Eoss.  Lead.  Gas.  812,  Lord  Medwyn:  "  It 
is  often  said,  and  truly,  that  by  indorsation  a  new  contract  is  created; 
and  I  was  puzzled,  at  onetime,  with  the  circumstance,  that  the  indorsa- 
tion in  the  present  case  was  by  an  Englishman  to  an  Englishman,  and 
executed  in  England;  audit  appeared  difficult  for  me  to  conceive  how 
such  a  contract  could  be  validly  entered  into  in  a  country  where  such  an 
indorsation  was  not  valid,  so  as  not  to  constitute  a  right  in  favor  of  the 
one,  or  an  obligation  against  the  other.  But,  although  it  might  be  con- 
sistent with  principle  to  allow  the  law  of  the  place  where  the  indorse- 
ment was  made  to  regulate  its  effect  between  indorser  and  indorsee,  as 
between  the  indorsee  and  the  maker  no  new  contract  is  created,  the  con- 
tract between  them  remaining  the  same  original  contract,  regulated  by 
the7ex  loci  contractus;  the  indorsee  is  merely  substituted  in  the  place  of 
the  original  payee ;  and  the  maker  remains  und.er  the  same  liability  he 
contracted  at  the  time  he  made  the  note,  which  was  to  pay  to  the  payee, 
or  to  the  holder  by  indorsement;  and  he  cannot  object  to  the  form  of 
the  transfer,  if  it  be  made  according  to  the  law  which  gives  it  its  char- 
acter, and  regulates  the  quality  of  the  note  —  that  is,  in  the  present  case, 

805 


§    509  CONFLICT   OF   LAWS.  [CH.  XXIX. 

The  law  of  the  forum  determines  always  in  whose  name 
the  suit  may  be  brought,  and  to  that  extent  governs  the 
determination  of  the  title  of  the  indorsee.^ 

§  509.  What  law  governs  formalities  in  respect  to  pre- 
sentment, protest  and  notice.  —  The  authorities  are  all 
agreed  that  the  required  formalities  in  respect  to  present- 
ment are  determined  by  the  law  of  the  place  of  acceptance 
or  payment. 2  And  so,  also,  does  the  law  of  the  place  of 
payment  determine  whether,  and  how  many,  days  of  grace 
are  allowed.^ 

Likewise,  the  law  of  the  place  of  payment  determines 
the  requirements  in  respect  to  protest.* 

But  the  authorities  are  divided  as  to  what  law  governs  the 
requirements  in  respect  to  notice  of  dishonor.  Some  of  the 
cases,  on  the  ground  that  the  requirement  as  to  notice  is  a 
condition  to  the  new  liability  created  by  indorsement,  hold 
that  it  must  be  determined  in  respect  to  each  successive  in- 
dorsement by  the  law  of  the  places  of  indorsement.^     But, 

according  to  the  law  of  Scotland."  See  to  same  effect  Lebel  v.  Tucker, 
2  Q.  B.  77;  s.  c.  8  Best  &  Smith,  830;  Trimbey  v.  Vignier,  4  M.  &  Scott. 
695;   1  Bing.  N.  C.  151;  6  C.  &  P.  25. 

1  Roosa  V.  Crist,  17  111.  450;  Harper  v.  Butler,  2  Pet.  239, 

2  Rothschild  V.  Currie,  1  Ad.  &  El.  (n.  s.)  434 ;  Phillips  u.  Im.  Thum,  1 
C.  P.  L.  R.  463;  Rouquette  v.  Overman,  10  Q.  B.  L.  R.  525;  Todd  t>.  Neal's 
Admrs.,  49  Ala.  266. 

3  lank  of  Washington  v.  Triplett,  1  Pet.  25;  Vidal  v.  Thompson,  II 
Mart.  (La.)  23;  Bryant  v.  Edsou,  8  Vt.  325;  Ayman  v.  Slieldou,  12  Wend. 
43;  Jewell  v.  Wright,  30  N.  Y.  264;  Thorp  u.  Craig,  10  Iowa  461;  Blodgett 
V.  Durgin,  32  Vt.  361;  Hatcher  v.  McMorine,  4  Dev.  124;  Boweu  y. 
Newell,  13  N.  Y.  290;  Goddiu  v.  Shipley,  7  B.  Mon.  575;  Bank  of  Orange 
Co.  V.  Colby,  12  N.  H.  520;  Rothschild  v.  Currie,  1  Ad.  &  El.  (n.  s.)  43; 
Cribbs  v.  Adams,  13  Gray,  597 ;  Walsh  v.  Dart,  12  Wis.  635. 

*  Townsley  v.  Sumrall,  2  Pet.  170;  Raymonds.  Holmes,  11  Tex." 54; 
Ticknor  v.  Roberts,  11  La.  16;  Aymar  v.  Sheldon,  12  Wend.  444;  Will- 
iams?;. Putnam,  14  N.  11.  543;  Todd  v.  Neal's  Admr.,  49  Ala.  266;  Carter 
V.  Union  Bank,  7  Humph.  548;  Snow  v.  Perkins,  2  Mich.  238;  Bank  of 
Rochester  V.  Gray,  2  Hill,  227;  Ross  v.  Bedell,  5  Duer,  462. 

fi  Aymar  v.  Sheldon,  12  Wend.  444;  Lee  v.  Selleck,  33  N.  Y.  815;  32 
806 


CH.  XXIX.]  CONFLICT   OF   LAWS.  §510 

in  consideration  of  the  heavy  burden  such  a  rule  would  im- 
pose upon  the  holder  of  the  paper,  it  is  maintained  hy  other 
authorities  that  the  requirements  as  to  notice  of  dishonor 
are  determined  by  the  law  of  the  place  of  payment.^ 

§  510.  Law  applicable  to  stamps  on  commercial  paper. 

In  consequence  of  the  general  rule  that  the  courts  of  one 
country  will  not  aid  in  the  enforcement  of  the  revenue  laws 
of  another  country  ,2  it  is  a  matter  of  some  doubt  whether 
the  requirement  of  a  stamp  on  a  negotiable  instrument  by 
the  law  of  the  place  where  the  contract  was  made,  would 
be  enforced  by  the  courts  of  any  other  State.  The  follow- 
ing may,  however,  be  relied  upon  as  the  conclusion  of  the 
authorities.  If  the  lex  loci  contractus  declares  the  instru- 
ment to  be  void  for  want  of  a  stamp,  then  the  instrument 
will  be  pronounced  void  everywhere ;  but  if  the  want  of  a 
stamp  only  has  the  effect  of  taking  away  the  admissibility 
of  the  instrument  in  evidence,  it  is  treated  as  a  question 
of  evidence,  and  therefore  to  be  determined  by  the  law  of 
the  forum.^ 

But,  unlike  the  general  rule,  the  stamp  is  required  or  not, 
in  the  execution  of  a  negotiable  instrument,  according  to 
the  law  of  the  place  where  the  contract  was  made,  and 
not  where  it  is  to  be  performed.* 

Barb.  522;  Raymond  v.  Holmes,  11  Tex.  55.  See  also  "Williams  v.  Put- 
nam, 14  N.  H.  543;  Snow  v.  Perkins,  2  Mich.  238. 

1  Rothschild  v.  Currie,  1  Ad.  &  El.  (n.  s.)  43;  2  Parsons'  N.  &  B.  344, 
355;  Todd  w.NeaPs  Exr,   49  Ala.  266;  1  Daniel's  Negot.  Inst.,  §§  911,  912. 

2  Ludlow  V.  Van  Rensselaer,  1  Johns.  94;  James  v.  Catherwood,  2 
Dow.  &  R.  190;  Lambert  v.  Jones,  2  Pat.  &  Heath,  144;  Skinner  v.  Tinker, 
34  Barb.  333. 

3  Alves  V.  Hodgson,  7  T.  R.  241;  Bristow  v.  Sequeville,  6  Exch.  279; 
Faut  V.  Miller,  17  Gratt.  47;  Clegg  v.  Levy,  3  Camp,  166.  But  see 
Wynne  v.  Jackson,  2  Russ.  251 ;  James  v.  Catherwood  2  Dow.  &  Ry.  190; 
Story  on  Bills,  §  137;  Wharton's  Confl.  of  Laws,  §§  686,  688. 

*  Vidal  V.  Thompson,  11  Mart.  (La.)  23;  2  Parsons'  N.  &  B.  331 ;  Story 
on  Bills,  §  159;  Wharton's  Confl.  of  Laws,  §  698  et  seq. 

807 


§    511  CONFLICT    or    LAWS.  [Cll.  XXL\. 

§  511.  Law  relating-  to  payment,  interest  and  dam- 
ages.—  The  obligation  of  the  parties,  its  character  and  its 
extent,  is  of  course  determined  by  the  law  of  the  place 
where  that  obligation  is  to  be  performed.  And  that  in- 
cludes not  only  a  consideration  of  the  principal  indebted- 
ness, but  also  the  rate  of  interest,  if  any  at  all,  where  none 
is  expressly  stipulated  for.  And  a  different  rule  will  apply 
to  each  one  of  the  parties  to  the  same  instrument,  if  they 
reside  in  different  places;  the  drawer's  liability  being  de- 
termined by  the  law  of  the  place  where  the  bill  was  drawn, 
and  the  indorser's  by  the  law  of  the  place  where  the  instru- 
ment was  indorsed. 1 

The  same  holds  good  as  to  the  damages  for  the  dishonor 
of  the  instrument.^  In  respect  to  interest,  the  maker  of  a 
note  or  the  acceptor  of  a  bill  has  a  right  to  elect  whether 
the  legality  of  the  rate  shall  be  determined  by  the  law  of  the 
place  of  payment,  or  of  the  place  of  execution.  If  a  rate 
of  interest  is  expressly  provided  for,  which  is  usurious  ac- 
cording to  the  law  of  the  place  of  execution,  and  lawful  ac- 
cording to  the  law  of  the  place  of  payment,  or  vice  versa,  it 
will  be  lawful  interest,  and  may  be  recovered  anywhere, 

1  Interest,  Campbellu.  Nichols,  33  N.  J.  L.,  81 ;  Arnott  v.  Redferne,  2  C. 
&  P.  88;  De  Wolf  v.  Johnson,  10  Wheat.  3G7;  Andrews  v.  Pond,  13  Pet, 
Go;  Davis  v.  Coleman,  7  Ired,  424;  Brainard  v.  Marshall,  8  Pick.  194; 
Hawley  v.  Sloo,  12  La.  Ann.  815;  Peck  v.  Mayo,  14  Vt.  33;  Gibbs  v.  Fre- 
mont, 20  E.  L.  &  Eq.  555;  Smith  v.  Smith,  2  Johns.  235;  Austin  v.  Imus, 
23  Vt.  286;  Montgomery  v.  Budge,  3  Dow  &  C.  297;  Consequa  ?>.  Will- 
ings,  1  Pet.  C.  C.  225;  Schofield  v.  Day,  20  Johns.  102;  Summers  r. 
Mills,  21  Tex.  77;  Boyce  v.  Edwards,  4  Pet.  Ill;  Hunt's  Exr.  v.  Hall, 37 
Ala.  702;  Thompson  v.  Powles,  2  Sim.  194.  What  rate  of  interestcol- 
lectible  of  drawers  and  indorsers,  see  Crawford  v.  Branch  Bank,  6  Ala- 
15;  Bank  of  United  States  v.  United  States,  2  How.  711;  Gibbs  v.  Fre- 
mont, 20  Eug.  L.  &  Eq.  555;  9  Exch.  25;  Peck  v.  Mayo,  14  Vt.  33;  Aus- 
tin V.  Imus,  33  Vt.  28G;  Bayley  v.  Heald,  17  Tex.  102.  See  .Mullen  t?. 
Morris,  2  Barr.  87:  Haurick  ??.  Andrews,  9   Port.  (Ala.)  10. 

2  Slocum  V.  Poraeroy,  6  Cranch,  221;  Hazelhurst  v.  Kean,  4  Yeates, 
19;  Gibbs  r.  Fremont,  9  Exch.  25;  Hendricks  r.  Franklin,  4  Johns.  119; 
Hicks  V.  Brown,  12  Johns.  142;  Prentiss  v.  Savage,  13  Mass.  20;  Lennig 
V.  Ralston,  23  Penn.  137. 

808 


CH.  XXIX.]  CONFLICT    OF    LAWS.  §    511 

even  in  the  place  where  the  rate  is  declared  to  be  usurious.^ 
But  where  the  rate  of  interest  is  usurious  according  to  the 
law  of  both  the  place  of  the  contract  and  the  place  of  pay- 
ment, the  effect  of  the  violation  of  the  law  upon  the  instru- 
ment, together  with  the  penalties  imposed,  is  to  be  deter- 
mined by  the  law  of  the  place  where  the  instrument  was 
made,  and  not  where  it  was  to  be  paid.'^ 

If  the  provision  of  the  law,  which  applies  in  the  deter- 
mination of  the  legality  and  rate  of  interest  and  damages, 
is  not  established  by  proper  testimony,  the  law  of  the 
forum  will  govern.^ 

In  reducing  the  negotiable  instrument  to  a  judgment,  in 
some  other  place  than  the  place  of  payment,  and  in  a  place 
where  there  is  a  different  currency  in  use,  the  amount  of 
the  indebtedness  must  be  computed  first  in  the  currency  of 
the  place  of  payment,  and  then  ascertain  the  equivalent  of 
that  sum,  plus  the  current  rate  of  exchange,  in  the  cur- 
rency of  the  place  in  which  the  action  is  brought.  And  in 
making  this  computation,  the  actual  current  rate  of  ex- 
change must  be  taken,  and  not  the  statutory  rate.* 

1  De  Peau  v.  Humphreys,  20  Mart.  (La.)  1 ;  Richards  v.  Globe  Bank 
12  Wis.  692;  Vliet  v.  Camp,  13  Wis.  198;  Chapman  v.  Robertson,  6  Paige 
Ch.  627;  Kilgore  v.  Dempsey,  25  Ohio  St.  413;  Harvey  v.  Archbakl,  1  Ry. 
&  Moo.  184;  "Van  Schaick  v.  Edwards,  2  Johns.  355;  Healy  v.  Gorman,  3 
Green  (N.  J.)  328;  Bank  of  Georgia  v.  Lewin,  45  Barb.  340;  Berrien  v. 
Wriglit,  26  Barb.  208;  Jacks  v.  Nicliols,  5  Barb.  38  (overruling  3  Sand. 
Ch.  313,  and  affirming  1  Seld.  178);  Potter  ?;.  Tallman,  35  Barb.  182; 
Meller  v.  Tiftany,  1  Wall.  310;  Andrews  v.  Pond,  13  Pet.  65;  Thompson 
V.  Powles,  2  Sim.  194. 

2  Andrews  v.  Pond,  13  Pet.  65;  De  Wolf  v.  Johnson,  10  Wheat.  367; 
Mix  V.  Madison  Ins.  Co.,  11  lud.  117. 

3  Woodv.  Corl,  4  Met.  203;  Ballingalls  v.  Gloster,  3  East,  481;  Jaf- 
fray  v.  Dennis,  2  Wash.  C.  C.253;  Aymar  v.  Sheldon,  12  Wend.  221. 

*  Cash  w.  Kennon,  11  Ves.  314;  Lauusse  u.  Barker,  3  Wheat.  101;" 
Lee  V.  Wilcocks,  5  Serg  &  R.  48;  Whart.  Confl.  of  Laws,  §  514;  2  Par- 
sons'N.  &  B.  370;  Delegal  u.  Naylor,  7  Biug.  460;  Scott  v.  Benan,  2 
Barn.  &Ad.  78;  Grant  v.  Healy,  3  Sum.  523.  But  see  Schofleld  v.  Day,  20 
Johns.  102 ;  Martin  v.  Franklin,  4  Johns.  125;  Adams  v.  Cordis,  8  Pick.  280, 
where  it  is  held  that  the  legal  rate  of  exchange  can  alone  be  recovered, 
at  least  in  the  case  of  commercial  paper,  other  than  bills  of  exchange. 

809 


TABLE  OF  CASES  CITED. 


References  are  to  Sections. 


A. 


Abat  V.  Rion  (9  Mart.  (La.)  465), 

335. 
Abbe  V.  Eaton  (2  B.  &  C.  945),  190, 

275. 
Abel  77.  Sutton  (3  Esp.  108),  2G2. 
Abbey  v.  Chase  (6  Gush.  54),  84. 
Abbott  V.  Agr.  Bk.  (12  N.  J.  342), 

342,  401. 
Abbott  V.  Bailey  (6  Pick.  89),  61. 
Abbott  V.  Douglass  (1 C.  B.  496) ,  24. 
Abbott  V.  Fisher   (124  Mass.  414), 

170. 
Abbott   V.   Hendricks  (1   M.  &  G. 

795),  42,  154. 
Abbott  V.  McKinley  (2  Miles,  220), 

61,  74. 
Abbotts.  Rose  (62Me.  194),  397. 
Abbott  V.  Striblen  (2  B.  &  C.  945), 

26,  280. 
Abeel  v.  Seymour  (13  N.  Y.  S.  C. 

(6  Hun)  656),  79. 
Abel  V.  Sutton  (3  Esp.  109),  108, 

109. 
Able   V.  Alexander   (45  Ind.    523), 

424. 
Aborn  v.  Bosworth  (9  Heisk.  33), 

142,  143. 
Abraham  v.  Dubois  (4  Camp.  269), 

3. 
Abraras  v.  Union  Nat.  Bk.  (31  La. 

Ann.  61),  439. 


Absolem  v.  Marks  (11  Q.  B.  19), 

262. 
Ackland  v.  Pearce  (2  Camp.  599), 

259. 
Ackland  v.  Bleatlien  (12  Heisk.  342), 

28,  29,  184,  202. 
Adams  v.  Adams  (25  Minn.  72),  192. 
Adams ■;;.  Bleathem  (66  Me.  19),  265. 
Adams  v.  Boyd  (33  Ark.  33),  116. 
Adams  v.  Cordis  (8  Pick.  2G0),  410, 

511. 
Adams  v.  Darby  (28  Mo.  182),  210, 

810,  355. 
Adams  v.  Flanagan  (35  Vt.    410), 

77. 
Adams  v.  Frye  (3  Mete.   107),  394. 
Adams  v.  Hackensack    (16  Vroom, 

638),  310. 
Adams  v.  Jones  (12  Ad.  &  E.  455), 

249,  256,  273,  500. 
Adams  u.  King  (16  111.  169),  17. 
Adams   v.  Leland   (30  New  York, 

309),  358. 
Adams  v.  Oakes  (6  Carr.  &  P.  70), 

874. 
Adams  v.  Otterbock  (15  How.  539), 

815,816,  318. 
Adams  v.  Railroad  Co.  (2  Coldw. 

645),  133,  134. 
Adams  v.   Reeves  (68   N.  C.  134), 

373. 
Adams  u.  Soule  (33  Vt.  538),  172a. 
Adams  v.  Torbert  (6  Ala.  865),  336. 
811 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Adams  v.  Wilsou  (12  Met.  138),  204. 
Adams  r.  Wordley  (1  M.  &  W.  347), 

227. 
Adams   v.  Wright    (14  Wis.   408), 

337,  340. 
Addy  V.  Grix  (8  Ves.  504),  265. 
Adle  V.  Metroger  (1  La.  Ann.  254), 

422. 
JEtim  Bank     v.     Winchester    (43 

Conn.  391),  394. 
^tna    Nat.    Bank    v.  Fourth  Nat. 

Bank  (46  N.  Y.  82),  452. 
Aggs  V.  Nicholson  (1  H.  &  N.  165), 

124. 
Agnew  V.  Bank  of  Gettysburg    (2 

HaiT.    &    GUI,    478),    212,     311, 

312. 
Agra  V.  Masterman    (2  L.   R.  Ch. 

App.  297),  500. 
Ahern  v.  Goodspeed  (16  N.  Y.  S. 

C.  (9  Hun)  265),  292. 
Aiken  V.  Marine  Bank  (16  Wis.  713), 

123. 
AinsTVorth  v.  Creke  (L.  R.  4  C.  P. 

483),  83. 
Airey  v.  Pearson  (37  Mo.  424),  363. 
Alabama  Co.  v.  Brainard  (35  Ala. 

479),  125. 
Alcock  V.   Alcock    (3   Man.  A.   G. 

268),  56. 
Alcock  1).  Hill  (4  Leigh,  622),  424. 
Alcock  V.  Hopkins  (6  Gush.  484), 

380,  381. 
Alderson  v.  Langdale   (3   Barn.  & 

Ad.  660),  392. 
Aldis  V.  Johnson  (1  Vt.  136),  257&. 
Aldous  I'.  Cornwell  (L.  R.  3  Q.  R. 

573),  24. 
Aldrich  v.  Jackson    (5  R.   L  228), 

244,  259,  466. 
Aldrich  v.  Stockwell  (9  Allen,  45), 

155,  203. 
Aldridge  v.  Branch  Bank  (17  Ala. 

45),  11,  34c. 
812 


Aldridge   v.   Turner   (1   Gill    &  J. 

427),  151. 
Alexander  v.  Cotton  (2  Wall.  404), 

354. 
Alexander  v.  Burchfleld  (7  M.  &  G. 

1067),  442. 
Alexander  v.  Hutcheson  (2  Hawks, 

535),  50. 
Alexander  v.  Mackenzie   (6   C.  B. 

766),  81. 
Alexander  v.  Polk  (39  Miss.  737), 

194. 
Alexander  v.   Springfield    (2  Met. 

(Ky.)  534),  269. 
Alexander    v.  Thomas    (16    Q.  B. 

333),  25. 
Alexandria  Canal  Co.  v.    Swan  (5 

How.  83),  120. 
Alexandria,  Loudoun,   etc.,   R.   R. 

Co.  r.  Burke  (22  Gratt.  254),  304. 
Alger  V.  Scott  (54  N.  Y.  14),  170. 
Allaire  v.  Hartshorne  (1  Zab.  665), 

163,  166,  168,  293,  304. 
Allan  V.  Mawson  (4  Camp.  115),  8. 
Alleghany  Bk.'s  Appeal  (48  Pa.  St. 

328),  447. 
Allen  V.  Allen  (9  Frost.  N.  H.  106), 

52. 
Allen  V.  Berryhill    (27  Iowa,  534), 

52,  423. 
Allen  V.  Brattou  (47 Miss.  129),  506. 
Allen  V.  Clark  (49  Vt.  390),  244. 
Allen  V.  Culver  (3  Denio,  284),  377. 
AUen'c.  Dundas  (3  T.  R.    125),  447. 
Allen  V.  Edmudson  (2  C.  &  K.  547), 

337. 
Allen  f.  F>ldred  (50  Wis.  136),  334. 
Allen  V.  Fourth  Nat.  Bank  (59  N.  Y. 

12),  399,  400. 
Allen  V.  Furbush  (4  Gray,  504),  42, 

203. 
Allen  V.  Hearn  (1  T.  R.  56),  186. 
Allen  V.  Inhabitants  of  Jay  (60  Me. 

124),  481. 


TABLE    OF    CASES    CITED. 


References  ar 

Alleav.  Keeves  (1  East,  435),  434. 
Allen  V.  Kemble  (6  P.  C.  314),  409, 

507. 
Allen  V.  King  (4  McLean,  128),  355. 
Aliens.  Merchants'  Bank  (_22Wend. 

215),  321. 
Allen  ■;;.  Miles  {i  Harr.  234),  318. 
Aliens.  Pegram  (16  Iowa,  163),  87. 
Allen  V.  Poole  (54  Miss.  323),  47. 
Allen  V.  Eightmere  (20  Johns.  365), 

310,  421. 
Allen  V.  Sea,  Fire  and  Life  As.  (9 

C.  &B.  574),  23,  128,  434. 
Allen  V.  Sharp  (37  Ind.  73),  400. 
Allen  V.  State  Bank  (1  Dev.  &  Bat. 

Eq.  3),   467. 
Allen  V.  Suydam  (20  Wend.  321), 

211,  (17 Wend.  368),  215. 
Allen  V.  Tate  (58  Miss.  588),  63. 
Allen  u.  Williams    (12  Pick.  297), 

492. 
AUis  V.  BiUings    (6  Met.  415),  52, 

55. 
Allison  V.  Juniata  County  (50  Pa. 

St.  353),  138,  139,  142. 
Allum  V.   Perry  (68  Me.  232),  247, 

288. 
Allwoodt?.  Hasledon  (2  Bailey,  457), 

243. 
Almy  u.    Reed  (10  Cush.  421),  365, 

366. 
Alnutt  V.   Ashenden    (5  Man.  &  G. 

392),  418. 
Alsop  V.Todd  (2  Root,  105),  48. 
Alsworth  V.   Cordtz  (31  Miss.  82), 

47. 
Alves  V.  Hodgson  (7   T.   R.    421), 

510. 
American  Emigrant  Co.   v.   Clark 

(47  Iowa,  671),  273,  441. 
American  Exch.  Bank  v.  Blanchard 

(7  Allen,  332),  25. 
American    Life   Insurance    Co.   v. 

Emerson  (4  Smed.  &  M.  177),  337. 


e  to  Sections. 

American  Life    Insurance   Co.    v. 

Oakley  (9  Paige,  496),  121. 
American  Bank  v.  Jenness  (2  M<et. 

288),  296. 
American  Nat.  Bank  v.   Bangs  (42 

Mo.  452),  394. 
Ames  V.  Brown  (22  Minn.  257),  392. 
Ames  V.    Meriam  (98  Mass.   294), 

446. 
Ames  V.  St.  Paul,  etc.,  R.R.Co.  (12 

Minn.  412),  88. 
Amhearst  Academy  v.   Cowles    (6 

Pick.  427),  161,242,247. 
Amison  u.Ewing(2Cold.  367),  125. 
Ammidon    v.    Woodman    (31    Me. 

580),  316. 
Amner  v.  Clark  (2  Cromp.  M.  &  R. 

468),  3. 
Araore  v.  LaMotte  (5    Abb.   N.'C. 

146),  80. 
Amoskeag  Bank  v.  Moore  (37  N.  H. 

539),  363. 
Amoskeag  Man.  Co.   v.  Gibbs    (28 

N.  H.  816),  251. 
Amy  u.   Dubuque  (98   U.   S.   471), 

477,  478. 
Ancherv.  Bank  of  England  (Doug. 

615),  268. 
Ancona    v.   Marks  (7  Hurlst.  686), 

440. 
Anderson    v.  Baumgartner  (27  Mo. 

80),  305. 
Anderson  v.  Bullock  (4  Munf .  442), 

32. 
Anderson    v.   Cleveland    (13  East, 

430),  232. 
Anderson  v.  DeSoer  (6  Gratt.  364), 

209. 
Andersons.  Drake  (44 Johns,  114), 

213,  358. 
Andersons.  Hart    (17   Wis.    297), 

305. 
Anderson  v.  Hicks  (3  Camp.  179), 

223,  227. 

813 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Auderson   v.  Laugdale   (3  B.  &  Ad. 

6G0),  394. 
Anderson  v.  Pearce  (36  Ark.  293), 

23,  (36  Ark.  393),  85,  124. 
Anderson  v.    Smith  (33  Md.  465), 

46. 
Anderson  V.Walter  (34  Mich.  113), 

284,  285. 
Anderson  v.  Warne  (71  111.  20),  280, 

423. 
Anderson  v.  Weston    (6  Bing.  (N. 

C.)  296),  346. 
Andrews  v.  Allen    (4  Harr.    (Del.) 

452),  87. 
Andrews  v.  Baggs (Minor,  173),  227. 
Andrews  v.   Blakey  (11    Ohio    St. 

89),  434. 
Andrews  v.    Estes    (11  Me.    267), 

137. 
Andrews  v.    Franklin    (1  Strange, 

24),  25. 
Andrews  v.  Ger.  Nat.  Bank  (9  Heisk. 

211),  217,  436,  443. 
Andrews    v.    Hagadon     (25     Kan. 

379),  424. 
Andrews  v.  Herriott  (4  Cow.  510), 

506. 
Andrews  v.  Hoxie  (5  Texas,  171), 3. 
Andrews   v.    Keeler  (19  Hun,  87), 

412. 
Andrews   v.   Ludlow  (5  Pick.  28), 

251. 
Andrews  v.  Marrett  (58  Me.  539), 

166,  167,  170,  424,  425. 
Andrews  v.  McCoy    (8  Ala.    920), 

176. 
Andrews  v.  Pond  (13  Pet.  65),  506, 

511. 
Andrews  v.  Simms  (33  Ark.  771), 

266. 
Andrews  v.   Woodcock    (14  Iowa, 

397),  204. 
Androscoggin  Bank  v.  Kimball  (10 

Cush:  373),10,  35,  283. 
814 


Angel  V.  Ellis  (1  McGlolu,  57),  230. 
Angel  V.  McClellen  (16  Mass.  28), 

46. 
Angel  V.  N.  W.  Mut.  Life  Ins.  Co. 

(92  U.  S.  330),  35,  283,  800,  392, 

394,  397. 
Angel  r.  Ohler  (5  M.  &  W.  600) ,  232. 
Aniba  v.  Yeomans  (39  Mich.  171), 

260,  265. 
Ansted  v.  Sutter  (30  111.  164),  506. 
Anstell  V.  Rice  (5  Ga.  472),  174. 
Anthony  v.  Co.  of  Jasper  (101  U. 

S.  693),  482. 
Antoni  v.  Wright    (22  Gratt.  833), 

463. 
Apperson  v.  Bynura  (5  Cold.  348), 

314. 
Apperson  v.  Pritchard    (9    Heisk. 

793),  314. 
Apperson  v.  Union  Bank  (4  Cold. 

445),  318,354. 
Appleby  v.  Beddolph  (8  Mod.  363), 

25. 
Appleton  V.  Donaldson  (3  Pa.  St. 

386),  158. 
Appleton  V.  Parker  (15  Gray,  173), 

380. 
Arayo  v.  Currill  (1  La.  641),  506. 
Arbouin  v.  Anderson  (1  Q.B.  498), 

155. 
Arbuckle  v.  Hawks,  (20  Vt.  538), 

204. 
Arca,ngelo  v.  Thompson  (2  Camp. 

620),  348. 
Archery.  McCray  (59  Ga.  547),  196. 
Archer  V.  Shea  (14  Hun,  493),  196, 

259. 
Archibald    v.  Argall  (53  111.  307), 

379. 
Arents  v.  Commonwealth  (18  Gratt. 

750),  295,  415,419,  471,473,  474, 

475,  476,  477,  500. 
Argenbright  v.  Campbell  (3  H.  M. 

174),  32. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Armfleld  v.  Allport  (27  L.  J.   Ex. 

42),  264. 
Armfield  v.  Tate  (7  Ire.  258),  50, 
Arraistead  v.  Armistead  (10  Leigh, 

525),  227,  310. 
Armistead  v.    Ward  (2  Pat.  &  H. 

515),  379,  381,424,  425. 
Armitagev.  Wildoe  (36  Mich.  124), 

47. 
Armour  v.  Mich.  C.  K.  R.  Co.  (65 

N.  Y.  Ill),  493. 
Armstrong  v.  Caldwell  (2  111.  546), 

310. 
Armstrong  v.   Christiani  (6   C.  B. 

687),  346. 
Armstrong  v.  Chadwick  (127  Mass. 

756),  348,  365. 
Armstrong  v.  Gibson  (31  Wis.  61), 

292. 
Armstrong  v.  Harshman  (61  Ind. 

52),  270. 
Armstrong  v.  Kirkpatrick  (79  Ind. 

527),  123. 
Armstrong  v.   South  Express  Co. 

(4  Baxt.  376),  183. 
Armstrong  v.  Stokes  (L.  R.  7.  Q. 

B.  598),  87. 
Armstrong  v.  Thurston    (11    Md. 

148),  346. 
Armstrong  v.    Toler   (11    Wheat. 

258),  198,  506. 
Armsworth  v.  Scotten  (29  Ind.  495), 

464. 
Arnold  v.  Bryant    (8    Bush,  668), 

270. 
Arnold  v.  Dresser  (8  Allen,  435), 

212,  313,  318. 
Arnold  v.  Jones  (2  R.  I.  345),  394. 
Arnold  v.   Kinlock  (50  Barb.  44), 

326,  346. 
Arnold  v.  Poole  (4  Man.  &  G.  860), 

377. 
Arnold  v.  Richmond  Iron  Works  (1 

Gray,  434),  52,  55. 


Arnold  v.  Rock  River,  etc.,  R.  R. 

Co.  (SDuer,  207),  26. 
Arnold  v.  Sprague  (34  Vt.  402),  31, 

(34  Vt.  409),  85,  87,  158,  222. 
Arnold  v.  Stackpole  (11  Mass.  27), 

85,  87. 
Arnot  V.  Erie  Railway  Co.  (12  N.  Y. 

S.  C.  (5  Hun)  608),  116. 
Arnot  V.  Symonds  (85  Pa.  St.  99), 

264. 
Arnott  V.  Redferne  (2  C.  &  P.  88), 

510. 
Arnott  V.  Woodburn  (35  Mo.  29), 

295. 
Ashley  v.  Ashley   (3  Moore  &  P. 

186),  17. 
Ashley  v.  Gunton  (15  Ark.  415),  340. 
Ashpitel  V.   Bryan  (32  L.  J.  Q.  B. 

91),  230,  398. 
Ashuelot  Man.    Co.    v.  Marsh    (1 

Cush.  507),  121. 
Ashurst  V.  Bank  of  Australia  (37 

Eug.  L.  &  Eq.  149),  202,  473.^ 
Ashurst  V.  Royall  Bank    (27    Law 

Times,  168),  295. 
Askew  V.  Torbert    (49   Ala.    101), 

185. 
Aspinall  v.   Wake    (10    Bing.  55), 

146,  230. 
Atcheson  v.  Scott  (51  Texas,  213), 

25. 
Atkins  V.  Blake  (2  J.  J.  Marsh.  40), 

289. 
Atkins  V.   Brown  (59  Me.  90),  123. 
Atkins  V.   Cobb    (56  Ga.    86),  203, 

268. 
Atkinson  v.  Brooks   (26  Vt.  574), 

166,  167. 
Atkinson  v.  Hawden  (2   Ad.  &  E. 

169),   392. 
Atkinson   v.   Mank    (1  Cow.   691), 

152,  227. 
Atlantic  Bank  v.  Merchants'  Bank 

(20  Gray,  532),  438,  430. 

815 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Atlantic  Nat.  Bank  v.  Franklin  (55 

N.  Y.  235)  1G6,  169,  175. 
Atlantic  St.  Bank  v.  Savery  (82  N. 

Y.  294),  98,  99,  299. 
Atlas  Bank  v.  Doyle  (9  R.  I.  76), 

158,  303,  304. 
Atlas  Nat.    Bank  v.   Savery    (127 

Mass.  75),  99. 
Attcuborough    v.     McKeuzie     (36 

Eng.  L.  &Eq    562),  209. 
Atty.-Gen.  v.  Continental  Life  Ins. 

Co.  (71  N.  Y.  325),  5a,  452. 
Atty.-Gen.  v.  Life  and  Fire  Ins.  Co. 

(9  Paige,  470),  115. 
Attwood  V.  Crowdie  (1  Stark.  483), 

163. 
Attwood   V.  Fish  (101  Mass.  3G3), 

181. 
Attwood  V.    Hazledon    (3    Bailey, 

457),  336. 
Attwood  V.  Munnings  (7  B.   &  C. 

278),  77,  81,  219. 
At-s^od  V.  Weeden  (12  R.  I.  293), 

178. 
Aubertu.  Maze  (2B.  &  P.  373),  198. 
Aubert  v.  Walsh    (4  Taunt.   293), 

455. 
And  V.    Magruder  (10    Cal.   282), 

424. 
Aude  V.  Dixon  (6  Exch.  869),  286. 
Augusta  Bank  v.  Augusta  (56  Me. 

176),  475,  481. 
Aurora  City  v.  "West  (22  Ind.  88), 

178,  280,473,  476,  477,  481. 
Austell  V.    Rice    (5  Ga.   472),  145, 

173. 
Austin  V.  Boyd  (25  Pick.  64),  157, 

(24  Pick.  G4),  158,270. 
Austin  V.  Buuyard  (34  L.  J.  217), 

434,  435. 
Austin  V.  Curtis  (31  Vt.  64),  425. 
Austin  V.  Dorwin  (21  Vt.  38),  424. 
Austin  V.  Gruner  (90  111.  300),  285, 

291. 

816 


.\ustin  V.  Holland   (69  N.  Y.  571), 

106. 
Austin  V.  Imus  (23  Vt.  286),  511. 
Austin   V.  Markham    (44  Ga.  161), 

193. 
Austin  V.  Vandermark  (4  Hill,  259), 

98,  99. 
Austin  V.  Whitlock  (1  Munf.  487), 

32. 
Averback  v.  Pitchett  (58  Ala.  451), 

29. 
Averett's  Adm.  v.  Booker  (5  Gratt. 

167),  21,  152. 
Ayer  v.  Hutchings  (4  Mass.  370), 

289,  296. 
Avery  v.   Stewart   (10  Conn.   69), 

315,  316. 
Aymar  v.  Beers  (7  Cow.  705),  211, 

215,  216,  360. 
Aymar  v.  Sheldon  (12  Wend.  443), 

509,  508,  511. 
Ayrault  v.  McQueen  (32  Barb.  305), 

169. 
Ayres  v.  Milroy  (53  Mo.  516),  286. 
Ayrey  v.  Fearnsides  (4  Mees.  &  W. 

168),  29c. 


B. 


Babcock  v.  Steadman  (1  Root,  87), 

34cZ. 
Bachouse  v.  Selden  (29  Gratt.  586), 

506. 
Bachellor  v.  Priest  (12  Pick.  399), 

215,  311,  312,335,  372,  374. 
Backman  v.  Charleston  (42  N.  H. 

125),  482. 
Backus  V.  Danforth  (10  Conn.  297), 

242,315. 
Backus  V.  Shepherd  (11  Wend.  16), 

363. 
Backus  V.  Taylor  (84  Ind.  503),  106. 
Backus  V.    Spaulding    (116    Mass. 

418),  172rt. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Bacon  r.  Fitch  (1  Root,  181),  17. 
Bacon  v.  Holloway  (2  E.  D.  Smith, 

159),  172a. 
Bacon  v.  Lee  (4  Clark  (Iowa),  49), 

178. 
Bacon  v.  Miss.  Ins.  Co.  (31  Miss. 

116),  115. 
Bacon  v.  Page  (1  Conn.  404),  24. 
Bacon  v.  Porter  (1  Root,  370),  204. 
Bacon  •;;.  Searles  (1  H.  Bl.  88),  376. 
Badger  v.  Bank  of  Cumberland  (26 

Me.  428),  78. 
Badnall  v.  Samuel   (3  Price,  521), 

232,  424. 
Baer  v.  Leppert  (12  Hun,  515),  311, 

359. 
Baggett  V.  Meux  (1  Phil.  627),  62. 
Bailey  v.  Bidwell  (13  M.  &  W.  73), 

303. 
Bailey  v.  Bodenham  (16  C.  B.  288), 

443. 
Bailey  v.  Dozier  (6  How.  23),  321, 

324,  325. 
Bailey  v.  Edwards  (4  B.  &  S.  761), 

422. 
Bailey  v.  Finch  (L.  R.  7  Q.  B.  34), 

447. 
Bailey  v.  Freeman  (11  Johns.  220), 

157. 
Bailey  v.  Heald  (17  Texas,    102), 

507,  511. 
Bailey  v.  Miller  (35  Ga.  330),  185. 
Bailey  v.  Rawley  (1  Swan.  205),  77. 
Bailey  v.  Smith  (14  Ohio  St.  402), 

291,  293,  305. 
Bailey  v.  Smock  (61   Mo.  213),  31, 

152. 
Bailey  v.  Southwestern  Bank  (11 

Fla.  266),  209,  356. 
Bailey  v.  Taber  (5  Mass.  286),  11, 

34,  280. 
Bailey  v.   Taylor    (11    Conn.  531), 

393. 
Bailey  v.  Walker  (29  Mo.  407),  151. 


52 


Bain  v.  Whitehaven  (3  H.  L.  Cas. 

1),  506. 
Bainbridge  v.   Wilcocks    (1   Bald. 

536),  507. 
Baird  v.  Blagrove  (1  Wash.  170), 

32. 
Baird  v.   Cochran    (4   Serg.   &  R, 

397),  98. 
Baker  v.  Baker  (4  Bibb,  346),  148, 

175. 
Baker     v.     Chambliss     (4     Green 

(Iowa)  428),  137. 
Baker  v.  Collins  (9  Allen,  253),  155, 

198. 
Baker  v.  Denning  (8  Ad.  &  El.  94), 

265. 
Baker  v.  Jubber  (1  M.   &  G.  212), 

220. 
Baker  v.  Lovett  (6  Mass.  78),  47. 
Baker  u.  Matlack  (1  Ashm.  68),  193. 
Baker  v.  Martin  (3  B.  C.  34),  376. 
Baker  v.  Morriss    (25    Bab.  138). 

342. 
Baker  v.  Robinson    (63  N.  C.  191), 

270,  272. 
Baker  v.   Scott  (5  Rich.  303),  272, 

363. 
Baker  v.  Terrell  (8  Minn.  195),  305 
Balder  v.  Walker  (14  Mees.  &  Wels. 

465),  166,  170,  425. 
Baker  v.    Williamson    (4   Pa.    St. 

456),  455. 
Balcorabe  v.   Northrup     (9    Minn. 

173),  137- 
Baldridge  v.  Cook  (27  Texas,  565), 

202. 
Baldwin  v.   Bank    of  Newburg  (1 

Wall.  234),  78,  127. 
Baldwin    v.  Farnsworth    (1   Fairf. 

414),  314. 
Baldwin  v.  Richardson   (1  B.  &  C. 

245),  348,  358. 
Baldwin   v.    Rosier      (1  McCrary, 

384),  48. 

817 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Baldwin  v.  Vau  Duesen  (37  N.  Y. 

487),  172a,  244. 
Ball  V.  Allen  (15  Mass.  435),   15, 

441. 
Ball  V.  Greaud  (14  La.  Ann.  305), 

304. 
Ball  V.  Powers  (G2  Ga.  757),  34c. 
Ballard  v.  Fuller  (32  Barb.  68),  454. 
Ballingalls  v.  Gloster  (3  East,  482), 

21,  259,  511. 
Ballinger  v.  Edwards    (4  Ired.  Eq. 

449),  292. 
Ballon  V.  Talbott   (16  Mass.  461), 

84. 
Ballew  V.  Clark  (2  Ireland,  23),  52. 
Ballston  Spa  Bank  v.  Marine  Bank 

(16  Wis.  120),  120. 
Baltimore  v.    Eschbach    (18    Md. 

276),  80. 
Baltimore    Coal,  Tar,  etc.,   Co.  v. 

Fletcher  (61  Md.  288),  88. 
Baltzer  v.  Kansas  P.  R.   R.  Co.  (3 

Mo.  App.  574),  227. 
Banbury  v.  Bassett  (2  Stra.  1211), 

227. 
Bancroft    v.  Denny    (5  Houst.   9), 

222. 
Bancroft  v.  Hale  (Holt,  476),  340, 

341. 
Bane  v.  Gridley  (67  111.  388),  412. 
Banfleld  v.  Rumsey  (2  Hun,  112), 

173. 
Bange  v.  Flint  (25  Wis.  546),  305. 
Bangor  B'k  v.  Hook  (5  Greenleaf , 

174),  411. 
Bangs  V.  Mosher  (23    Barb.  478), 

425. 
Bank  v.  Bynum  (84  N.  C.  24),  242. 
Bank  v.  Chillicothe  (7  Ohio  St.  II. 

31),  480. 
Bank  v.  Cook  (38  Ohio  St.  442),  123. 
Bank  v.   Flanders  (G   N.  H.   239), 

265. 
Bank  v.  Keene  (53  Me.  103),  398. 
818 


Bank  v.  Lanier  (11  Wall.  369),  497. 
Bank  v.   Mayberry   (48   Me.    198), 

11. 
Bank  v.  Mudgett   (45  Barb.  663), 

106. 
Bank  v.  Pittell  (41  111.  492),  437. 
Bankt;.  Slaughter  (7   Blackf.  133), 

339. 
Bank  v.  Supervisors  (7  Wall.  26), 

296. 
Bank  v.    Whitehead    (10     Watts, 

397),  299. 
Bank  v.  Willis  (4  Met.  604),  272. 
Bank  of  Albion  v.  Smith  (27  Barb. 

489),  274. 
Bank  of  Alexandria  v.  Swan  (9  Pet. 

33),  337,  345,  346. 
Bank  of    Alexandria    v.  Young  (2 

Cranch  C.  C.  52),  310. 
Bank  of  Bennington  v.  Raymond 

(12  Vt.  401),  211. 
Bank  of  British  N.  A.  v.  Hooper  (5 

Gray,  567),  124,  266. 
Bank  of  Cape  Fear  v.  Seawell  (2 

Hawks,  560),  347. 
Bank  of  Charleston  v.  Chambers  (11 

Rich.  657),  304. 
Bank  of  Charleston  v.  Zorn  (14  S. 

C.  444),  310. 
Bank  of  Chenango  v.  Hide  (4  Cow. 

667),  301. 
Bank  of  Chenango  v.  Root  (4  Cow. 

126),  336. 
Bank  of  Chillicothe    v.   Mayor    of 

Chillicothe  (7  Ohio  Pt.  II.  p.  31), 

133,  134. 
Bank  of  Chillicothe  v.   Dodge    (8 

Barb.  233),  197. 
Bank  of  Columbia  v.  Lawrence  (1 

Pet.  678),  340,  341,  343,  348. 
Bank  of  Columbia  v.  Magrader  (6 

Har.  &  J.  172),  316,  342. 
Bank  of   Columbia  v.  Patterson  (7 

Cranch,  299),  117. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Bank  of  Commerce  v.  Barrett  (38 

Ga.  126),  300,  394. 
Bauk  of  Commerce  v.  Bogy  (44  Mo. 

17),  56. 
Bank  of  Commerce   v.    Selden    (3 

Minn.  155),  98. 
Bauk  of   Commerce  v.  Union  Bank 

(3   Comst.    235),    230,    394,    399, 

451. 
Bauk  of  Commonwealth  v.  Curry  (2 

Dana,  142),  220,  283. 
Bank  of  Commonwealth  v.  Letcher 

(3  J.  J.  Marsh.  195),  379. 
Bauk  of  Commonwealth  v.  Mudgett 

(44  New  York,  514),  327,  314. 
Bank    of     Cumberland    Mayberry, 

(48  Me.  198),  34c. 
Bank  of  Decatur  v.  Hodges  (9  Ala. 

631),  325. 
Bank  of  Deer  Lodge  v.  Hope  Min- 
ing Co.  (3  Montana,  146),  77. 
Band  of  England  v.   Anderson  (4 

Scott,  50),  439. 
Bank  of  England  v.  Newman  (1  Ld. 

Raym.  442),  244,  313,  379. 
Bank  of  England  v.   Tarleton  (23 

Miss.  178),  305. 
Bauk  of  Gallipolis  v.  Trimble  (6  B. 

Mou.  600),  506. 
Bauk  of  Genesee  v.  Patchin  B'k  (9 

N.    Y.   315),    85,    116,    118,    127, 

394. 
Bauk    of    Geneva    v.    Hewlett    (4 

Wend.  328),  340,  342. 
Bank  of  Georgie  v.  Lewin  (45  Barb. 

340),  506,  511. 
Bauk  of  Ireland  v.  Archer  (11  M.  & 

W.  383),  22#. 
Bank   of   Ireland  v.  Beresford    (6 

Dow.  237),  301. 
Bauk  of   Kansas  City  v.  Mills  (24 

Kan.  610),  312,  373,  375. 
Bank  of  Kentucky  v.  Garey  (3    B. 

Mou.  629),  324. 


Bauk  of  Kentucky?).  Hickey  (4  Litt. 

225),  310. 
Bauk  of  Kentucky  v.  Pursley  (3  T. 

B.  Mou.  240;,  326. 
Bauk  of   Limestone    v.  Penick    (5 

T.  B.  Mou.  25),  35,  283. 
Bank  of  Louisiana  v.  Mansaker  (15 

La.  115),  340. 
Bauk  of  Louisville    v.   EUery   (34 

Barb.  630),  220. 
Bank  of  Louisville  v.   Young   (37 

Mo.  398),  198. 
Bank  of   Manchester  v.  Glasen  (13 

Vt.  334),  262,  326. 
Bank    of    Marietta    v.    Pendall  (2 

Rand.  475),  256. 
Bank    of   Metropolis  v.   Jones    (8 

Pet.  12),  121. 
Bank  of   Metropolis   v.   New  Eng. 

Bk.  (1  How.  234),  163. 
Bauk  of  Michigan  v.  Ely  (17  Wend. 

508),  226. 
Bank  of   Missouri  v.   Phillips  (17 

Mo.  30),  286. 
Bank    of  Missouri  v.  Vaughn    (36 

Mo.  90),  335. 
Bauk  of   Missouri  v.  Wright    (10 

Mo.  719),  410. 
Bank    of    Mobile    v.  Hall   (6   Ala. 

€39),  176. 
Bauk  of   Mobile    v.   Meagher    (33 

Ala.  622),  467. 
Bank  of   Montgomery  v.  Walker  (9 

S.  &  R.  229),  232. 
Bank   of    Montreal  v.  Howard    (8 

Jones  &  S.  156),  226. 
Bauk  of  Montreal  v.  Page  (98  111. 

110, 121),  107. 
Bauk  of  New  York  v.  Bank  of  Ohio 

(29  New  York,  019),  127. 
Bank  of  New  York  v.  Vauderhost 

(32  N.  Y.  553),  163,  169. 
Bank  of  N.  A.  v.  Meredith  (2  Wash. 

C.  C.  37),  377. 

819 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Bauk  of   Ohio  Valley  v.  Lockwood 

(13  W.    Va.    392),  154,  158,  380, 

381,  3'J4, 
Bauk  of   Orleans  v.  Merrill  (2  Hill, 

295),  486. 
Bank  of    Pern   v.  Farnsworth  (18 

111.  563),  486. 
Bank   of  Pennsylvania   v.   Reed  (1 

Watts  &S.  101),  78. 
Bank    of    Pittsburg    v.     Neal    (22 

How.  (U.  S.)  107),  35,  154,  217, 

283,  289,  303. 
Bank  of  Port  Gibson  v.   Baugh  (9 

Smcdes&M,  290),  107. 
Bank    of    Republic  v.  Baxter    (31 

•Vt.  101),  436. 
Bauk  of  Republic  v.  Carrington  (5 

R.  I.  515),  165. 
Bank  of  Republic  v.  Millard    (10 

Wall.  152),  452. 
Bank    of  Rochester  v.   Bowen    (7 

Wend.  158),  98. 
Bank    of    Rochester   v.    Gould     (9 

Wend.  279),  345. 
Bank  of  Rochester  v.  Gray  (2  Hill, 

227),  326,  327. 
Bank   of  Rochester  v.   Mintent    (1 

Den.  405),  85. 
Bauk  of  Rochester  v.   Monteath  (1 

Denio,  402),  87,  104. 
Bank  of  Rome  v.  Village   of  Rome 

(19  N.  Y.  24),  473,  482. 
Bank  of  Rutland  v.  Woodroof  (34 

Vt.  89),  224. 
Bank    of     Salina    v.    Babcock   (21 

Wend.  499),  165,  166,  1(;9. 
Bank  of   Sandusky  v.  Scoville   (24 

Wend.  115),  165,  294. 
Bank  of   Scotland   v.  Hamilton  (1 

Bell's  Commentaries,  409),  215. 
Bank  of  Sherman  v.   Api^erson    (4 

Fed.  R.  25),  21. 
Bank  of  St.  Albans  v.   Gilliand  (23 

Wend.  311),  99,  165,  294. 

820 


Bank  of  St.  Louis  v.  Rice  (98  Mass. 

288),  226. 
Bank  of  S.  C.  v.  M'Willie  (14  Mc- 

Cord,  438),  77. 
Bauk  of  S.  C.  V.  Meyers  (1  Bailey, 

412),  362,  424. 
Bank  of  State  v.  Muskingum  Branch 

Bank(29  New  York,  319),  127,  262. 
Bank  of   Syracuse  v.   HoUister  (17 

New  York,  46),  317. 
Bauk  of  Tennessee  v.  Gumming  (9 

Heisk.  465),  184,  198. 
Bank  of  Troy  v.  Topping  (9  Wend. 

273),  146,  147,  170. 
Bauk  of  U.    S.  V.  Bierne  (1   Gratt. 

234),  78a,  261   (1 Grat.  265),  261, 

336. 
Bank  of  U.  S.  v.  Bauk  of   Georgia 

(10  Wheat.  333),  230,  399,  451. 
Bank  of  U.  S.  v.  Bank  of  Carneal 

(2  Pet.  543),  342,  343,   344,  345, 

347. 
Bank  of  U.  S.  v.  Corcoran  (2  Peter- 
son, 121),  338,  340. 
Bank  of  U.    S.  v.   Dandridge    (12 

Wheat.  64),  117. 
Bank   of   U.    S.  v.  Daniel  (12   Pet. 

32),  379. 
Bank  of  U.  S.  v.  Dunn  (6  Pet.  51), 

121,  273. 
Bank  of  U.  S,  v.  Goddard  (5  Mason, 

366),  335. 
Bauk  of  U.  S.  V.  Hatch  (6  Pet.  250), 

340,  415,  423,  424. 
Bauk  of  United  S.  v.  Leathers  (10 

B.  Mou.  64),  321. 
Bauk  of  U.  S.  V.  Norwood  (1  Har. 

&  J.  423),  343. 
Bank  of  U.  S.  v.  Sill  (5  Conn.  112), 

467. 
Bank  of  U.  S.  v.  Smith  (11  Wheat. 

171),  30,  310,  327. 
Bank  of  U.  S.  v.  Wagenor  (19  Pet. 

378),  196. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Bank  of  U.  S.v.  U.S.  (2  How.  711), 

312,  405,  507,  511. 
Bank  of  Utica  v.  Bender  (21  Wend. 

643),  348,  359. 
Bank  of  Utica  v.  Davidson  (5  Wend. 

588),  342. 
Bank  of  Utica  v.  Ives  (17  Wend. 

501),  424,  425. 
Bank  of  Utica  v.  Phillip  (3  Wend. 

408),  342. 
Bank  of  Utica  u.  Sraalley  (2  Cowen, 

770),  497. 
Bank  of  Vergennes  v.  Cameron  (7 

Barb.  143),  98,  99,  326,  376. 
Barker  v.  Stearne  (9   Excli.  684), 

346. 
Barnes  v.  Gorham    (9  Rich.  297), 

29c. 
Barnes  v.  Trenton  Gas  Co.  (12  C. 

E.  Green,  33),  299. 
Barr  v.  Baker  (9  Mo.  840),  201,  203. 
Barrett  v.   County  Court    (44  Mo. 

197),  473,  482. 
Barrett  V.  Funday  (38  Ind.  86),  13. 
Barrett  v.  Scliuyler  Co.  Court  (44 

Mo.  197),  117. 
Barrett  v.  Skinner  (2  Bailey,  88), 

13. 
Barrick  v.  Austin  (21   Barb.  241), 

120. 
Barring  v.   Clark    (19  Pick.    230), 

373. 
Barring  v.   Lyman  (1  Story  C.  C. 

396),  226. 
Barron  v.  Cady  (40  Mich.  259),  422. 
Barron V. How,  13 Mart.  (La.)  144), 

380. 
Barrow  v.  Coles  (3  Camp.  92),  493. 
Barrows  v.  Lane  (5  Vt.  161),  272. 
Barry  iJ.  Clark  (19  Pick.  220),  228.  i 
Barry  v.  Merchants  Exch.  Co.  (1 

Sand.  Ch.  280),  115,  134. 
Barry  v.  Morse   (3  N.  H.  132),  273,  | 
274,363.  I 


Barry  v.  Page  (10  Gray,  398),  88. 
Barstrow  v.   Hiriart  (6   La.   Ann. 

98),  347. 
Bartsch  v.  Atwater  (4  Conn.  419), 

244, 
Bartlett  v.  Bailey  (59  N.  H.  408), 

46. 
Bartlett  v.  Ould  (28  Gratt.  7  ),  34. 
Bartlett  v.  Robinson  (39  N.  Y.  187), 

342. 
Bartlett  v.  Tucker  (104  Mass.  345), 

19,  84  (104  Mass.  338),  85. 
Barton  v.  Baker  (1  Serg.  &  R.  334), 

362. 
Barton  v.  Beer  (35  Barb.  78),  162. 
Barton  v.  Bennett  (3  Camp.   220), 

416. 
Barton  v.  Trent  (3  Head,  167),  244. 
Barwick  v.  White  (2  Del.  Ch.284), 

148. 
Bascom  v.  Young  (7  Mo.  1),  100. 
Basford  v.  Pearson  (9  Allen,  388), 

35. 
Bass  V.  Clive  (4  M.  &  S.  13),  230. 
Bass  V.  O'Brien  (12  Gray,  477),  87, 

124. 
Bass  V.  Randall  (1  Minn.  404),  87. 
Bassett  v.  Avery  (15  Ohio  St.  299), 

295. 
Bassett  v.  Bassett  (55  Barb.  505), 

172ffl. 
Bassett  u.  Garthwaite  (22  Tex.  230),  " 

251. 
Bassett  v.  Haines  (9  Cal.  261),  223. 
Batchellorv.  Priest  (12  Pick.  399), 

211. 
Bateman  v.  Joseph  (12  East,  433), 

213,  357,  358. 
Bateman    v.     Kingston     (6  L.    R. 

(Ireland)  328),  48. 
Bateman  v.  Mid  Wales  R.  R.  Co. 

(L.  R.  1  C.  P    490,  509,  512),  115. 
Bates  V.  Ball  (72  HI.  108),  57. 
Bates  V.  Butler  (46  Me.  387),  257a. 
821 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Bates  V.  Kerap  (12  Iowa,  00),  295. 
Bates  V.    Keinpton   (7  Gray,    382), 

252. 
Bates  V.  Rosekrans  (37  N.  Y.  409), 

379. 
Bath  Co.  V.  Amy  (13  Wall.  298),  481. 
Bathe  v.  Taylor  (15  East,  412),  394. 
Batly  V.  Carswell  (2  Johns.  48),  77. 
Battle  V.  Weems  (44  Ala.  105),  295. 
Battles    V.   Laudenslager    (84   Pa. 

St.  44r.),  303. 
Baughu  V.  Shackleford   (48    Miss. 

255),  145. 
Baumgartner  v.  Reeves  (35  Pa.  St. 

250),  314. 
Baxters.  Duren  (29  Me.  434),  244. 
Baxter  v.  Earl  of  Portsmouth  (5  B. 

&  C.  170),  54,  (7  Dow.  &  Ry.  614)^ 

64. 
Baxter  v.   Ellis  (57  Me.  180),  154, 

303. 
Baxter  v.   Little  (C>   Mete.  7),  269, 

295. 
Baxter  v.  Stewart  (4  Sneed,  213), 

29c. 
Bayard  v.  Lathy  (2   McLean,  462), 

220. 
Bayard  v.   Shunk     (1   "Watts.  &  S. 

92),  244,  380,464,466. 
Baley  v.  Faber  (5  Mass.  286),  178. 
Baylies  v.  Paterson  (15  Iowa,  279), 
•      137. 
Bayliss  v.  Pearson  (15  Iowa,  279), 

124,  206. 
Bazeudale  v.  Bennett  (L.  R.  3  Q.  B. 

D.527),  282,307. 
Beale  v.  Parrish  (20  New  York,  407), 

335. 
Beall  V.  Brown  (12  Md.  550),  203. 
Beall  V.  Leverett  (32  Ga.  104),  269. 
Beals  V.  Peck  (12  Barb.  245),  336, 

345,  346. 
Beals  V.  See  (10  Pa.  St.  56),  53. 
Bean  v.  Arnold  fl6  Me.  251),  363. 
822 


Bean   v.    Briggs    (1  Clark    (Iowa) 

488^    "86,506. 
Bean  i    3rown  (54  N.  H.  395),  377. 
Bean  v.  Jones  (8N.  II.   149),  IOC. 
Beard  v.  Dedolph    (29  Wis.  136), 

248. 
Beard  v.  Kirk  (11  N.  H.  397),  80. 
Beard  v.   Root  (11    S.  C.  N.  Y.  (4 

Hun)  356),  425. 
Beard  v.  Webb  (2   B.  &  P.  03),  61. 
Beard  v.   Westerman  (32  Ohio  St. 

29),  362. 
Beardslee  v.  Horton  (3  Mich.  560), 

300. 
Beardsley  v.   Baldwin  (2  Strange, 

1151),  25. 
Beardsley  v.  Hill  (61  111.  354),  20r. 
Beardsley  v.     Warner    (6    Weud. 

613),  415. 
Beatty  t).  Tete  (9  La.  Ann.  129),  146. 
Beaty  v.  Grim  (18  Ind.  131),  418. 
Beaver  Co.  r.  Armstrong  (44  Pemi. 

St.  63),  117,  471,  477. 
Beck  V.  Robley  (1  H.  Bl.  89m),  37(1. 
Beck  V.   Thompson    (4   Har.    &  J. 

531),  315. 
Becker    v.    Vroomlan    (13  Johns 

302),  203. 
Beckwith  v.  Angell  (6  Conn.  315), 

270. 
Beckwith  v.  Corrall  (2  C.  &  P.  250), 

289. 
Beckwith  v.  Farnum  (5  R.  I.  230), 

244. 
Beckwith  v.    Smith    (22   Me.  125), 

342. 
Bedford   Com.   Ins.    Co.  v.  Covell 

(8  Met.  442),  85. 
Bedford   v.    Deakin    (2   B.    &   Aid, 

210),  425. 
Bedford  v.  Hickman  (1  Yerg.  166), 

341. 
Beebe  v.  Brooks  (12  Cal.  308),  310, 

336. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Beecham  v.  Smith  (E.  B.  &  E.  (96 

E.  C.  L.  R.)  442),  13. 
Beeching  v.  Crowar  (1  Holt,  313), 

314,  466. 
Beecher  v.   Dacey    (45  Mich.  92), 

116. 
Beeker  v.  Saunders  (6  Ired.  380), 

421. 
Beeler  v.  Frost  (70  Mo.  186),  274, 

363. 
Beeler  v.  Young  (1  Bibb,  519),  48. 
Beeman  v.  Duck  (11  M.  &  W.  257), 

230,  288,  397,  398,  399. 
Beers  v.  Williams  (16  111.  69),  203. 
Begbie.  v.  Levi  (1  C.  &  J.  180),  220. 
Behrens    v.    McKenzie    (23    Iowa, 

333),  53. 
Belcher  v.  Belcher  (10  Yerg.  121), 

57. 
Belcher  V.  Smith  (7Cush.  482),  419. 
Belden  v.  Lamb  (17  Conn.  452),  292, 

348. 
Belderback  v.  Burlingame  (27  111. 

338),  152. 
Belger  ».  Dismore  (51  N.  Y.  166), 

492. 
Belknap  v.  Nat.  Bank  of  N.  A.  (100 

Mass.  379),  392. 
Bell    V.   Alexander    (21    Gratt.   6), 

444,  452. 
Bell  V.  Bruen  (1  How.  182),  506. 
Bell  V.  Dagg  (60  N.  Y.  530),  244, 

245. 
Bell  V.  Haggerstown  Bank  (7  Gill, 

210),  342,  343. 
Bell  V.  Hall's  Exrs.  (2  Duv.  288), 

354. 
Bell  V.  Kellar  (13  B.  Mon.  381),  62. 
Bell   V.    Lord   lugestre    (12   Q.   B. 

(64  E.  C.  L.  R.)  317),  273. 
Bell  V.  Morrison  (1  Pet.  351),  110. 
Bell  V.  Moss  (5  Whart.  189),  491. 
Bell  V.  Norwood  (7  La.  95),  375. 
Bell  V.  Packard  (69  Me.  105),  506. 


Bell  V.  Simpson  (75  Mo.  485),  170. 
Bell  V.  State  Bank  (7  Blackf.  457), 

343. 
Bell  V.  Wood  (1  Bay  249),  183. 
Bellamy  v   Majoribanks  (8  Eng.  L. 

&Eq.  519),  431,  452.  . 
Bellasis    v.   Hester  (1   Ld.   Rajrm. 

280),  217. 
Bellows  Falls  Bk.   v.  Rutland  Co. 

(40  Vt.  377),  486,  488. 
Bellows  V.  Lovell  (5  Pick.  307),  424. 
Belmont  Branch  Bk.   v.  Hoge  (35 

New  York,  65),  154,  280,  289,  300, 

303. 
Belotte  V.  Wynne  (7  Yerg.  534),  110. 
Belton  V.  Briggs  (4  Des.  465),  47. 
Beltzhoover  v.  Blackstock  (3  Watts, 

20),  289. 
Bemis  v.  McKenzie  (13  Fla.  553), 

310,  336. 
Bend  v.  Weitze  (12  Wis.  611),  300. 
Benedict  v.  Cowden  (49  N.  Y.  402), 

41,  394,  397. 
Benedict  v.  Cox  (52  Vt.  250),  422. 
Benedict  v.  Miner   (58  111.  19),  83. 
Benedict  v.  Smith  (10  Paige,  127), 

83. 
Benham  v.  Bishop  (9  Conn.  330) ,  50. 
Benjamin  v.   Fillman    (2  McLean, 

213),  31. 
Benman  v.  Millison  (58  111.  36),  166. 
Bennell  v.  Wilder  (67  111.  327),  377. 
Bennett  r.Farnell  (1  Camp.  130),  19. 
Bennett  u.  Stoddard  (58  Iowa,  654), 

80. 
Bennett  v.  Young  (18  Pa.  St.  261), 

327. 
Bensell  v.  Chancellor    (5    Whart. 

371),  52. 
Benson  v.    Carmel    (8    Greenieaf, 

110),  142. 
Benson  v.  Drake  (55  Me.  555),  34c. 
Benson  v.   Mayer   (24  Barb.  248), 

481. 

823 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Beuthall  v.  Judkius  (14  Met.  2G5), 

157,  273. 
Bentley  v.  Daggett  (51  Wis.  224), 

77. 
Beutnick  v.  Dorrien  (G  East,  199), 

221,  227,^32. 
Benton  v.  Gibson  (1  Hill  (S.  C), 

50),  2576,  310, 
Benton  v.  Martin  (52  N.  Y.  574),  34d. 
Berdsell  v.  Russell  (29  N.  Y.  220), 

475. 
Berge  v.  Abbott  (83  Pa.  St.  159), 

314. 
Bereich  v.  Marye  (9  Nev.  312),  497. 
Berkeley  v.  Cannon  (4  Rich.  136), 

57. 
Berkshire  Bk.  v.  Jones    (6  Mass. 

524),  318,  3G3. 
Bernerd  v.  Barry  (1  Green  (Iowa) 

388),  50G. 
Bernheiraer  v.   Marshall  (2  Minn. 

81),  399. 
BeroUes  v.  Ramsey  (Holt  N.  P.  77), 

46. 
Berry  v.  Anderson  (22  Ind.  40),  iid. 
Berry  v.  Griffin  (10  Md.  27),  380. 
Berry  v.  Pulleu  (69  Me.  101),  424. 
Berry  v.  Robinson  (9  Johns.  121), 

310,336. 
Berry  v.  South  Bank  (2  Duv.  379), 

341,  354. 
Berthune  v.  McCrary  (8  Ga.  114), 

293. 
Bertrand  v.  Barkmau  (8  Eng.  (Ark.) 

150),  1G8,  294. 
Besant  v.  Cross  (10  C.  B.  896),  227. 
Besshears  v.  Rowe    (46  Mo.  501), 

222. 
Bestr.  Crall  (23  Kan.  482),  163,  373. 
Best  V.  Hoppie  (3  Col.  139),  270. 
Best  V.  Nokomis  Nat.  Bk.  (76  111. 

608),  158. 
Betterton  v.   Roops  (3  B.  J,  Lea, 

216),  304,  334. 

824 


Betts  V.  Kimpton  (2  Bam.  &  Ad. 

273),  64. 
Beverley's  Case  (4  Rep.  126),  52. 
Bibb    V.   Hitchcock  (49  Ala.  468), 

183. 
Bibb  V.  Tomberlin    (1   Duv.  186), 

251. 
Bickford  v.  First  Nat.  Bk.  (42  111. 

238),  87,  443,  456. 
Bickford  v.  Gibbs    (8   Cush.  184), 

417,  420,  421. 
Bicknall  v.  Watterraan  (5  R.  I.  43), 

244. 
Bigelow  V.  Colton    (13  Gray,  309), 

270,  273. 
Bigelow  V.  Stephen   (35  Vt.  525), 

392. 
Bigler  v.  Waller  (14  Wall.  298),  375. 
Billgerry  v.  Branch  (19  Gratt.  393), 

66,  354. 
Billing  V.  Devaux  (3  M.  &  G.  565), 

220,  223,  224,  225. 
Billings  V.  Collins  (44   Me.    271), 

294. 
Billington  v.  Wagenor   (33  N.  Y. 

31),  424. 
Bingham  v.  Barley  (55  Texas,  281), 

47. 
Bingham  v.  Calvert  (13  Ark.  399), 

145. 
Bingham  v.  Noyes  (Chitty  on  Bills 

(21)  28),  62. 
Bingham  v.  Stanley  (2  Q.  B.  117), 

154. 
Bingham  v.  Stewart  (13  Minn.  106), 

87,  123, 137. 
Binney  v.  Pluraley  (5  Vt.  500),  34. 
Bird  V.  Brown  (4  Exch.  786),  83. 
Bird  V.  Daggett  (9  Mass.  494),  116. 
Bird  V.  LeBlanc  (6  La.  Ann.  470), 

362. 
Bird  V.  McElvain  (10  Ind.  40),  222. 
Birdsall  v.  Russell  (29  N.  Y.  249), 

289. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Birdsong    v.   Birdsong     (2    Head, 

289),  57. 
Bise  V.  Moreau  (2  C.  &  P.  (12  Bug, 

L.  R.)  376),  3. 
Bishop  V.  Dexter  (2    Couu.   419), 

336. 
Bishop  V.  Kowe  (71   Me.  263),  20, 

85,  247,  376. 
Bissell  V.  City  of  Kankakee  (64  III. 

249),  482. 
Bissell  V.  First  Nat.  Bank  (69  Pa. 

St.  415),  120. 
Bissell  V.  Gowdy   (31   Conn.   47), 

295. 
Bissell  V.  JefEersonville  (24  How. 

299),  83,482. 
Bissell  V.  Lewis  (4  Mich.  450),  226, 

500,  507. 
Bissell  V.  Morgan  (11  Cush.  198), 

154,303. 
Black  V.  Duncan  (60  Ind.  522),  34. 
Black  V.  Shreve  (13  N.  J.  458),  34d. 
Black  V.  Ward  (27  Mich.  173),  29. 
Black  V.   Zacharie    (3  How.  483), 

380,  497. 
Blackbourne,   Ex    parte    (10  Ves. 

204),  379. 
Blackman  v.  Doren  (2  Camp.  N.  C. 

503),  355. 
Blackman    v.   Dowling     (63    Ala. 

304),  205. 
Blackman  v.   Greene    (24  Vt.  18), 

266. 
Blackman  v.  Lehman  (63  Ala.  547), 

25,257,  257a,  473. 
Black  River  Ins.  Co.  v.  N.  Y.  L.  & 

T.  Co.  (73N.  Y.  282),  286. 
Blackstone  Bk.   v.  Hill   (10  Pick. 

133), 424. 
Blackstone  v.  Buttermore  (3  Smith 

(Pa.)  266),  80, 
Blades  v.  Free  (9  B.  &  C.  167),  80. 
Blaine    and   Hoge    v.  "Wilson    (28 
Gratt,  172),  354,  442,  456. 


Blaine  v.  Bourne  (11  R.  I.  1),268. 
Blair   v.   Bank  of    Tennessee    (11 

Humph.  84),  227,  310,  394,  415. 
Blair  v.  Perpetual  Ins.  Co.  (10  Mo. 

561),  115. 
Blake  v.  Coleman  (22  Wis.  416),  41, 

394. 
Blake  v.  Fash  (44  111.  305),  Sid. 
Blake  v.  McMillen  (22  Iowa,  258), 

313,  336. 
Blakely   v.  Bennecke  (59  Mo.  193), 

124. 
Blakely    v.  Grant   (6   Mass.  386), 

246,  257,  340. 
Blakemore     v.   Wood     (3     Sneed 

(Tenn.)  470),  200. 
Blakenship  v.  Ninemo  (50  Ala.  506), 

163. 
Blakey  v.  Johnson  (13  Bush,  197), 

392,  397. 
Blakiston  v.  Dudley  (5  Duer,  373), 

226. 
Blane  v.  Mut.  Nat.   Bank  (28  La. 

922),  362,  363,364. 
Blanchard  v.  Kaull   (44  Cal.  448), 

124. 
Blanchard  v.  Page   (8   Gray,  297), 

491. 
Blanchard  u.  Stevens  (3  Cush.  168), 

166,  168. 
Blanchard  v.  Wood  (26  Me.  358), 

363. 
Blanckenhagen  v.  Blundell  (2  Barn. 

&  Aid.  418),  18. 
Bland  v.  O'Hagen  (64  N.  C.  471),  35. 
Blankenshipt;.  Rogers  (10  Ind.  33), 

355,  445. 
Blazer  v.  Bandy  (15  Ohio  St.  57), 

424. 
Blethen  v.  Lovering  ^58  Me.  437), 

260. 
Bliss  V.  Clark  (88  Mass.  60),  202. 
Bliss  V.  Houghton  (13  N.  H.  126). 

506. 

825 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Blight  V.  Scheuck  (10  Pa.  St.  285), 

Sid. 
Block  V.  Bell  (1  M.  &  R.  149),  8. 
Block  V.  Wilkinson  (42  Ark.  253), 

223. 
Blodgett  V.   American  Nat.   Bank 

(49  Conn.  9),  lOG. 
Blodgett  t).  Durgin  (32  Vt.  361),  606. 
Blodgett  V.  Jackson  (40  N.  H.  26), 

19. 
Bloods.  Goodrich  (9  Wend.  68),  75. 
Blood  u.  Mavense  (38  Cal.  590),  122. 
Blood  V.  Northrup  (1  Kan.  291),  25, 

486. 
Bloom  V.  Helm  (58  Miss.  21),  98. 
Blount  y.  Bestland  (5  Ves.jr.  615), 

64. 
Blount  V.  Proctor  (5  Blackf.  265), 

198. 
Blow  V.  Maynard  (2  Lay,  54),  426. 
Blum  V.   Loggin    (53  Texas,  121), 

168,  299,  303^ 
Boalt  V.  Brown  (13  Ohio,  364),  394. 
Board  of  Education  v.  Fonda  (77 

N.  Y.  350),  379,  425. 
Boardman  v.  Hayne  (29  Iowa,  339) , 

136. 
Bobe  V.  Stlckney  (36  Ala.  482),  377. 
Bobsu.  Hansel  (2  Bailey,  114),  50. 
Bock  V.  Laum  (24  Pa.  St.  448),  292. 
Bocock  V.  Pavey  (8  Ohio  St.  270), 

89. 
Boddington  v.  Schlencher  (4  Barn. 

&  Aid.  752),  443. 
Bodley  v.  Higgins  (73  HI.  375),  34a. 
Boehm  v.  Garcias  (I  Camp.  425), 

227. 
Boehm  v.  Sterling  (T.  R.  423),  295, 

443,  446. 
Boeka  v.  Nuella  (28  Mo.  180),  247. 
Bogart  V.  M'Clung  (11  Heisk.  105), 

365. 
Bogarth  v.   Breedlove  (39    Texas, 

561),  394. 

82r^ 


Bogertu.  Hertell  (4  Hill,  503),  148. 
Bogeran  v.  Gueriuger  (14  La.  Ann. 

478),  108. 
Boggess  V.  Lilly    (18  Texas,  200), 

198. 
Bogy  V.  Keil  (1  Mo.  743),  355. 
Boit  V.  Corr  (54  Ala.  113),  314. 
Boit  V.  Whitehead  (50  Ga.  76),  295. 
Bolitho,    Ex  parte   (1   Buck.  100) » 

104. 
Bolland  v.  Bygrave  (1  R.  &  M.  271), 

163. 
Bolton    V.   Dugdale     (4  B.   &  Ad, 

619),  28. 
Bolton  V.   Horrod    (9  Mart.  326), 

215,  216. 
Bonchell  v.  Clary  (3  Brev.  194),  46. 
Bonbonus,  Ex  parte  (8  Ves.  642), 

98. 
Bond  V.  Bond  (7  Allen,  1),  62. 
Bond  V.  Bragg  (17  HI.  69),  327. 
Bond  V.  Central  Bk.  (2  Ga.  92),  165. 
Bond??.   Farnhara  (5  Mass.    171), 

355,  362. 
Bondu.  Storris  (13  Conn.  412),  310, 

373. 
Bond  V.  Warden    (1  Colyer,  583), 

443. 
Bondurant  V.  Everett  (1  Met.  (Ky.) 

658),  343. 
Bonedon  v.  Page  (24  Mo.  595),  507. 
Boneton   v.   Welsh  (3   Bing.  N.  C. 

688),  346. 
Bouham  v.  Needles  (103  U.  S.  648), 

482. 
Boone  v.  Boone   (58  Miss.    822), 

174. 
Boone  v.  Clarke   (3   Cranch  C.  C. 

389),  80. 
Bonner  v.  City  of  New  Orleans  (2 

Wood  C.  C.  135),  474,  475,  476. 
Bonner  v.  Nelson  (27  Ga.  433),  286. 
Bonney   v.  Smith    (17  111.  531),  80, 

172. 


TABLE    OF    CASES   CITED. 


References  are  to  Sections. 


Booker  u.  City  Robbin  (26  Ark.  660), 

198. 
Bookstaver  v.  Jayne  (60  N.  Y.  145), 

204. 
Bool  V.  Mix  (17  Wend.  119),  47,  49. 
Booth  u.Fitzer  (82  Ind.  266),  203. 
Booth  V.  Powers  (56  N.  Y.  31),  392. 
Booth  V.  Smith  (3  Wend.  66),  380. 
Booth  V.   Wallace   (2   Root,    247), 

29fZ. 
Booyer  v.  Hodges   (45  Miss.  78), 

148. 
Borden    v.    Clark    (26  Mich.  412), 

300. 
Borel  V.  Rollins  (30  Cal.408),  77. 
Borueman  v.    Sidlinger     (15    Me. 

429),  252. 
Borough  V.  Perkins  (1  Salk.  131), 

321. 
Borst  V.   Spellman   (4  N.  Y.  284), 

63. 
Bosauquet».  Deedman  (1  Stark.  1), 

163. 
Boss  V.  Hewitt  (15  Wis.  260),  297, 

473. 
Bossanger  v.  Ross  (29  Barb.  576), 

292,  293. 
Boston  Ice  Co.  v.  Potter  (123  Mass. 

28),  241. 
Bostwick    V.    Dodge     (1      Doug. 

(Mich.)  413),  165. 
Bouchell  V.  Clary  (3  Brev.  194),  48. 
Boughton  V.  Flint  (74  N.  Y.  476), 

488. 
Boultbee  v.  Stubbs   (18  Ves.  20), 

424. 
Boulton  V.  Coglan  (1  Bing.  N.  C. 

640)  178,  180. 
Bourne  v.  Ward  (51  Me.  191),  152. 
Boutell  V.  Cowdin   (9  Mass.  254), 

161. 
Bouts  V.  Ellis  (17  Beav.  121),  252. 
Bowen  v.  Bradley  (9  Abb.  (n.  s.) 

395),  506. 


Bowen  v.  Newell  (4  Seld.  190),  315, 

431,  432,  433,  434. 
Bowen  V.  Stoddard  (10  Met.  375), 

78,  408. 
Bower  v.  Hastings  (12  Casey,  285), 

295. 
Bower  v.  Hoffman  (23  Md.   264), 

489. 
Bowerbank  v.  Monteiro    (4  Taunt. 

844),  43,  227,  (37  Mo.  50),  227. 
Bowers  v.   Hurd   (10  Mass.   427), 

160,  252. 
Bowie  V.  Duvall    (1  Gill  &  J.  175), 

312,  373. 
Bowkert?.  Hill  (60  Me.    172),  251. 
Bowles  V.  Lambert  (54  HI. 239),  17. 
Bowling  V.  Harrison  (6  How.  248), 

338,  339. 
Bowman  v.  Hiller  (130  Mass.  153), 

259,  287. 
Bowman  v.  McChesney  (22  Gratt. 

609),  24,  25,  296,  315. 
Bowman  v.  Van  Kuren    (29  Wis. 

219),  163,  167. 
Bowyer    v.  Bampton    (2   Strange, 

1155),  259. 
Boyce  v.  Edwards  (4 Pet.  Ill),  226, 

411,  500,  506,  511. 
Boyce  v.  Geyer  (2  Mich.  N.  P.  71), 

300. 
Boyce  v.  Smith  (9  Gratt.  704)  52. 
Boyd  V.  Bank  of  Toledo  (32  Ohia 

St.  .'526),  363,  364. 
Boyd    V.    Cleveland  (4  Pick.  525), 

274,  363. 
Boyd  V.  Cummings  (17  N.  Y.  101), 

169,  174. 
Boyd  V.Emerson  (2  Ad.  &  El.  184), 

449. 
Boyd  V.  Hitchcock  (20  Johns.  76)^ 

379,  380. 
Boyd  V.  McCann  (10  Md.  118),  154,. 

295. 
Boyd  V.  Mclvor  (11  Ala.  822),  303. 

827 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Boyd  V.  Ortou    (1(1  Wis.  495),  336. 
Boyd  V.  Plumb  (7  Wend.  309),  98, 

99. 
Boyd  V.  Vauderkemp  (1  Barb.  Ch. 

273),  299. 
Boyd's  Adm's  v.  City  Sav.  Bk.  (15 

Gratt.  501),   313,   336,   338,   339, 

34-1. 
Boyle  V.  Skinner  (19  Mo.  82),   104. 
Boynton  v.  Pierce  (79111.  14.>),  270, 


Bozeinau    v.    Allen  (48  Ala.   512), 

185. 
Bozeman  r.  Rushing  (51  Ala.  529), 

185. 
Brabstone  v.  Gibson  (9  How:  263), 

507. 
Brackettr.  Montfort  (11  Me.  115), 

394. 
Bractonr.  Willing  (4  Call, 288),  209. 
Bradbury  v.  Blake  (25  Me.  397) ,  1 70. 
Bradford  v.  Corey  (5   Barb.  4G1), 

261. 
Bradford  v.  Fox  (38  N.  .J.  289),  421, 

456. 
Bradford  v.  Williams  (91  N.  C.   7), 

242. 
Bradlee  v.  Boston   Glass   Co.   (46 

Pick.  348),  85,  124. 
Bi-adleyf.  Carey  (8  Me.  234),  420. 
Bradley  v.  Davis  (26  Me.  45),  338, 

340,  345. 
Bradley    v.    Harrington   (5    Harr. 

305),  434. 
Bradley  v.  Hunt  (5  Gill  &  J.  58), 

'464. 
Bradley  v.  Lill  (4  Biss.  473),  28. 
Bradley  v.  Marshall  (54  111.  173), 

295. 
Bradley  v.  Northern  Bank  (60  Ala. 

258),  313,  326,  327. 


Bradley  f.  Trammel  (Herapst.  164), 

243. 
Bradsliaw  v.  Hedge  (10  Iowa,  402), 

327. 
Brady  v.  Chandler  (31  Mo.  28),  23. 
Brady  v.  The  Mayor  (16  How.  Pr. 

432),  83. 
Brailsford    v.    Williams    (15   Md. 

150),  335,  348. 
Brainard  v.  Davis  (2  Mo.  App.  490), 

168. 
Brainard  v.  Harris  (14  Ohio,  107), 

175. 
Brainard  v.  N.  Y.  &  H.  R.  R.  Co. 

(25  N.   Y.   496),   117,    471,    472, 

474. 
Brainard  v.   Reavis    (2   Mo.   App. 

490),  295. 
Braithwait  v.  Gardner  (8  Q.  B.  473), 

230. 
Bramah  v.  Roberts  (3  Bing;  N.  C, 

963),  115. 
Braman   v.  Hawk  (1  Blackf.  392), 

424. 
Braman  v.  Hess  (13  Johns.  52),  292, 

293. 
Bramhall  v.  Van  Camper  (8  Minn. 

13),  34c. 
Branch  Bankt?.  Gafifrey  (9  Ala.  153), 

310,  336. 
Branch  Bk.  v.  Hodges  (17  Ala.  42), 

313, 
Branch  Bank  v.  James  (9  Ala.  94), 

422. 
Branch  Bank  v.  Pierce  (3  Ala.  321), 

342. 
Branch  Bank  v.  Tillman  (12  Ala. 

214),  366. 
Branch  State  Bk.  v.  McLeran   (36 

Iowa,  306),  212,  313. 
Brandt  v.  Mickle  (28  Md.  436),  310. 


Bradley  v.   Phelps    (2   Root,  32.j),  '  Erny   v.    Hawden   (5  Maule  &  Sel. 

270.  I       68),  337. 
Bradley  v.  Pratt  (23  Yt.  378),  48.      Bray  v.  Kettell  (1  Allen,  80),  87. 
82S 


TABLE    OF    CASES    CITED^ 


References  are  to  Sections. 


Brazelton  v.   McMurray    (44    Ala. 

323),  8. 
Breckenridge  v.  Ralls  (4  Mou.  533), 

29. 
Breed  v.  Cook  (15  Johns.  242),  379. 
Breed  v.  Hillhouse  (7  Conu.  523), 

310,  421. 
Brefogle  v.  Beckley  (16  Serg.  &  R. 

2G4),  310. 
Breituug    v.    Lindauer    (37  Mich. 

217),  379. 
Breuemau  v.   Furness  (90  Pa.  St. 

186),  273,  274. 
Brengle  v.   Bushey    (40  Md.  141), 

425. 
Brenuer     v.     Gundersheimer     (14 

Iowa,  82),  157. 
Brent's  Exrs.  v.  Bk.  of  Metropolis 

(1  Pet.  92),  314. 
Breseuthal  v.   Williams  (1  Duval, 

329),  23. 
Brett  V.  Tomlinsou  (16  East,  293), 

183. 
Brewer  v.  Brewer  (6  Ga.  588),  22. 
Brewster  v.  Arnold  (1  Wis.  2G4), 

340. 
Brewster  v.  Burnett  (125  Mass.  68), 

400. 
Brewster  v.  Hobart  (15  Pick.  302), 

89. 
Brewster  v.   McCardel  (18  Wend. 

478),  11,  316. 
Brewster  v.  Silence  (11  Barb.  144), 

418. 
Brewster    v.  Wakefield  (22   How. 

118),  412. 
Brewster  v.  Williams  (2  S.  C.  455), 

25. 
Bricket  v.  Spaulding  (33  Vt.  109), 

314. 
Bridge  r.  Batchelder  (9  Allen,  394), 

244,  380. 
Bridge  City  B'k  v.  Welch  (29  Conn. 

475),  168. 


Bridgeport  v.  Housatouic  R.  R.  Co. 

(30  Conn.  275),  497. 
Bridgeport  Bank  v.  Dyer  (19  Conn. 

13G),  215. 
BridgeportCity  Bk.  v.  Empire  Stone 

Dressing  Co.  (30  Barb.  421),  ri6. 
Bridges   v.  Berry   (3  Taunt.   130), 

334. 
Briggs  V.  Boyd  (137   Vt.  534),  201, 

301,  426. 
Briggs  V.  Downing  (48  Iowa,  550), 

157. 
Briggs  V.  Ewart  (51  Mo.  251),  285. 
Briggs  V.  Hervey  (130  Mass.  186), 

348. 
Briggs  V.  Merrill  (58  Barb.   379), 

294. 
Briggs  V.  Partridge  (64  N.  Y.  357), 

87. 
Brigham  v.  Peters  (1  Gray,  139), 

85. 
Brigham  v.  Potter  (14   Gray,  522), 

179. 
Bright  V.    Judson    (47  Barb.  29), 

165,  507. 
Brighton  Market  Bk.  v.  Philbrick 

(40  N.  H.  506),  359. 
Brill  V.  Crick  (1  M.  &  W.  232),  40. 
Brill  V.  Tuttle  (81  N.  Y.  547),  5c. 
Brindley  v.  Barr  (3  Harr.    (Del.) 

419),  343. 
Brinkley    v.  Boyd   (  9  Heisk.    149), 

271. 
Brinkley    v.    Going  (Breese,  288), 

312,  373. 
Brinley  v.  Mann  (2  Cush.  337),  85. 
Briscoe  v.   Bank  of  Kentucky  (11 

Pet.  328),  463. 
Briscoe  v.  Kenealy    (8    Mo.   App. 

26),  174,  412. 
Bristol  Knife  Co.  ■;;.  First  Nat.  Bk. 

(41  Conn.  421),  449. 
Bristol  V.  Sprague  (8   Weud.  423), 

106,  109. 

829 


TABLK    OF    CASES    CITED. 


References  are  to  Sections. 


Bristol  V.  Warucr  (19  Couu.  7),  25. 
Bristow    I'.    Sequeville     (5    Exch. 

279),  510. 
Briti.sii   Liueu  Co.    v.  Drumraoud 

(10  B.  &C.  903),  506. 
Britt  V.   Lawson  (22  N.   Y.  S.  C. 

(15  Hun)  123),  313. 
Brittou  V.  Bishop  (11  Vt.  70),  269. 
Brittonv.  Clarlv  (IGOhio,  297),  205. 
Britton    v.  Dierker  (46   Mo.  592), 

394. 
Britton  v.   Hughes  (5   Biug.  400), 

193. 
Britton  v.  Nichols  (104   U.  S.  757), 

314. 
Broadway   S.    B.  v.    Shuraaker    (7 

Mo.  App.  171),  423. 
Brock  V.  Thompson    (1  Bailey  (S. 

C.)  L.  329),  292,  293. 
Brockway  v.  Alien  (17  Wend.  40), 

123. 
Brockway     v.      Comparree       (11 

Humph.  355),  261. 
Bromage  v.   Lloyd    (1    Exch.  32), 

34,  148. 
Bron  V.  Becknel  (20  La.  Ann.  254), 

179. 
Bronson    v.    Alexandres     (43  Ind. 

244),  271,  310. 
Bronson  v.   Eodes    (7  Wall.  245), 

375. 
Brook  V.  Hook  (L.  R.  6  Exch.  89), 

398. 
Brooke  v.    Smith     (Moore,    679), 

393. 
Brooker  v.  Scott  (11  M.  &  W.  67), 

46. 
Brookman  v.    Metcalf    (5    Bosw. 

429),  304,  474. 
Brooks  V.  Cutter  (119  Mass.  132), 

205. 
Brooks  V.  Hargreaves    (21    Mich. 

255),  25. 
Brooks  V.  Hatch  (6  Leigh,  634),  5c. 
830 


Brooks  V.  Hey  (23  Hun,  372),  158, 

301. 
Brooks  V.  Higby  (18  N.  Y.  S.  C.  (11 

Hun)  23G),  314. 
Brooks  V.  Martin  (2  Wall.  10),  198, 

288. 
Brooks  V.  Mintun  (1  Cal.  481),  88. 
Brooks  V.  Mitchell  (9  M.  &  W.  15), 

296. 
Brookshire  v.  Brookshire  (8  Ired. 

74),  80. 
Brookshire  v.  Voncannon  (6  Ired. 

231),  80. 
Broughton  v.  Fuller  (9   Vt.    373), 

394. 
Broughton     v.     M.     &    S.    Water 

Works  (3  B.  &  Aid.  1),  115,  (3  B. 

&  Aid.  110),  189. 
Brower    v.    Fisher    (4  Johns.  Ch. 

441),  52. 
Brower  v.  Peabody  (3  Kern.  126), 

493. 
Brown,  Ex  parte  (1  Glyn  &  J.  407), 

262. 
Brown  v.  Baker  (7  Allen,  339),  87. 
Brown  v.  Barber  (59  Ind.  533),  28. 
Brown  v.  Barry  (3    Dallas,    365), 

321. 
Brown  v.  Brown  (3  Conn.  299),  52, 

(108  Mass.  386),  52,  252. 
Brown  v.  Burns  (67  Me.  535),  377. 
Brown  V.    Butchers,  etc..  Bank  (6 

Hill,  443),  12,  265. 
Brown  v.   Butler    (99  Mass.  179), 

272,  273. 
Brown  v.  Byers  (16  M.  &  W.  252), 

115. 
Brown  v.   Clark  (14   Pa.  St.   469), 

107. 
Brown    v.   Coit  (1    McCord,  408), 

227. 
Brown  v.  Curtis  (2  New  York,  225), 

418,  421. 
Brown  v.  Davis  (3  T.  R.  80),  473. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Brown  V.  Dickinsou  (27  Gratt.  693) 

262. 
Brown  v.  De  Wiuton  (17  L.  J.  C 

P.  (60  E.G.  L.  R)  380),  20. 
Brown  v.  Donnell  (49  Me.  421),  77 
Brown  v.  Ferguson  (4  Leigh,  37) 

3,  336,  337,  344. 
Brown  v.   Gilman  (13  Mass.  158) 

17. 
Brown  v.  Harraden  (4  T.  R.  148) 

315. 
Brown  v.  Hull    (23  Gratt.  27),  30 

(33  Gratt.  29),  256,  269,  310,  363 
Brown  v.  Jackson    (1  Wash.  C.  C 

512),  268. 
Brown  v.    Jones   (3  Port.    (Ala.) 

420),  394. 
Brown  v.  Leavitt   (31  N.  Y.  113) 

164,  165,  169. 
Brown  v.  Leckie  (43  111.  500),  452 

453,  456. 
Brown  v.   Leeson   (2  H.  Bl.   43) 

188. 
Brown  v.  Lusk  (4  Yerg.  210),  433 
Brown  v.   MafEey    (15  East,   216) 

355. 
Brown  v.  M'Dermont  (5  Esp.  265) 

313. 
Brown  v.  Montgomery   (20  N.   Y 

287),  380. 
Brown  v.  Mott  (7  Johns.  361),  158 

292,  293,  295.    . 
Brown  v.   North  (21  Mo.  528),  164 
Brown  v.  Olmsted  (50  N.  Y.  163) 

379. 
Brown  V.  Parker  (7  Allen,  339),  77 

(7  Allen,  337),  85. 
Brown  v.   Penfleld  (36  N.  Y.  473) 

292. 
Brown  v.  Phelps  (103  Mass.  303) 

189. 
Brown  v.  Reed  (79  Pa.  370),  397. 
Brown  v.  Speyer   (20  Gratt.  309) 

189. 


Brown  v.   SpofEord  (95  U.  S.  393), 

273,  280,  303. 
Brown  v.  Straw  (6  Neb.  536),  394. 
Brown  v.   Todrell  (3  C.  &  P.  30), 

53. 
Brown  v.  Turner  (7T.R.  630),  295, 

313,  336. 
Brown  v.  Ward  (3  Duer,  660),  304. 
Brown  v.  Wilcox  (7  Iowa,  414) ,  259. 
Browne  v.  Wiley  (2  W.  Va.  502), 

185. 
Browuell  V.  Bonny  (1    Q.  B.   39), 

348. 
Browning  v.  Kinnier   (1  Dow.  81), 

213,  358. 
Browning  v.  Merritt  (61  Ind.  225), 

271,  272. 
Brownlee  v.    Arnold    (60  Mo.  79), 

305. 
Brua's  Appeal  (55  Pa.  St.  294),  189. 
Bruce  v.  Bruce  (1  Marsh.  165),  259. 
Bruce  v.    Burr  (67  N.  Y.  237),  244. 
Bruce  v.   Lord  (1   Hilt.  247),  123, 

125. 
Bruce  v.  Lee  (4  Johns.  410),  193. 
Bruce  v.  Lytle  (13  Barb.  163),  358. 
Bruce  v.   Warwick  (6  Taunt.  118), 

47. 
Bruce  v.   Westcott  (3   Barb.  274), 

394. 
Brueu  v.  Marquend  (17  Johns.  58), 

424. 
Brumah  v.   Roberts  (3  Bing.  N.  C. 

96), 96. 
Bruraagin  v.  Tallant  (29  Ca'..  503), 

486,  488. 
Brumrael  v.  Enders  (18  Gratt.  905), 

155,  (18  Gratt.  873),  196. 
Brunsen  v.  Napier   (1  Yerg.  199), 

362. 
Brush  V.  Reeves '(3  Johns.    439), 

257a. 
Brush  V.    Scribner  (11  Conn.  388), 

168,  289. 

831 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Bryan  v.  Berry  (G  Cal.  304),  78rt. 
Bryan  v.  Priram  (1  111.  33),  295. 
Bryan  v.  Philpot  (3  Ired.  407),  170. 
Bryan  v.  Wilcox  (49  Cal.  47),  364. 
Bryant  v.   Christie  (I  Stark.  329), 

193. 
Bryant  v.   Damon    (0  Gray,    164), 

305. 
Bryant  v.  Edson  (8  Vt.  325),  509. 
Bryant  v.  Lord  (19  Minn.  397),  363- 
Bryautr.  Merchants'  Bank  (8  Bush, 

43),  363. 
Bryants.  Pember  (45  Vt.  487),  203. 
Bryant  v.  Vix  (83  111.  14),  305. 
Brydenr.  Taylor  (2  Har.  &  J.  399), 

326. 
Bryson  v.   Lucas    (84  N.  C.  (280) 

080),  84,  85. 
Buchanan  v.   Pindley    (9  B.  &   C. 

738),  301. 
Buchanan  v.  International   Bk.  (78 

111.  500),  158,  304. 
Buchauan  v.   Litchfleld  (102  U.  S. 

291),  482. 
Buchanan  v.  Marshall  (22  Vt.  561), 

363. 
Buck  V.  First  Nat.  Bk.  (27   Mich. 

292),  183. 
Buck  V.  Kent  (3  Vt.  99),  373. 
Buckalew  v.    Smith  (44  Ala.  638), 

424. 
Bucklen   v.  Huff  (53  Ind.  474),  392. 
Buckley,  Ex  parte    (14    M.   &  W. 

469),  447. 
Buckleyu.  Briggs  (30Mo.  452),  115, 

117,  118. 
Buckley    v.    Beardsley    (2    South. 

570),  418. 
Buckley  v.  Jackson  (L.  R.  3  Exch. 

135),  268. 
Buckley  v.  Seymour  (30  La.  Ann. 

1384),  324. 
Buckner  v.   Clark  ((>   Bush,    168), 

162. 

832 


Buckner  v.   Finley  (2  Pet.  586),  3. 
Buckner   v.    Greenwood    (1    Eng. 

(Ark.)  200),  242. 
Buckner  v.  Jones  (I  Mo.  App.  538), 

289. 
Buckner  v.  Lee  (SGa.  285),  96,  104. 
Buckner  v.  Sayre  (17  B.  Mon.  754), 

5b. 
Buckstone  v.  Jones  (1  Scott  N.  R. 

19), 213. 
Budington  v.  Curtis  (15  Mass.  628), 

492,  493. 
Buffum  V,  Chadwick  (8  Mass.  103), 

126. 
Buhrman  v.  Bayles  (21  N.  Y.  S.  C. 

(14  Hun)  608),  165,  168,  203. 
Bulbeck   v.    Jones  (5  Jur.  (n.  s.) 

1317),  13. 
Bulger  V.  Roche  (11  Pick.  36),  506. 
Bulkley  v.  Butler  (2  B.    &  C.  425), 

35. 
Bull  V.   First    Nat.   Bk.    (14   Fed. 

Rep.  612),  296. 
Bull   V.  Sims   (23  N.    Y.  571),  139, 

140. 
Bull  V.  Tuttle   (81  N.  Y.  457),  5a. 
Bullard  v.  Bell  (1  Mason,  243),  464, 

465. 
Bullard  v.   Randall    (1  Gray,  605), 

209,  452. 
Bullard  v.  Thompson    (35  Texas, 

318),  50G. 
Bullet  V.  Bank  of  Penn.  (2  Wash. 

C.  C.  172),  467. 
Bullock   V.   Ogburu  (13  Ala.  346), 

170. 
Bullock   V.  Taylor  (39   Mich.  137), 

28. 
Bulton  V.   Winslow  (53  Vt.  430), 

87. 
Bumpass  v.  Tirams  (3  Sneed,  459), 

346. 
Bundy  v.  Town  of  Monticello  ( 

Ind.  (1882) ),  447. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Bunu  V.  Winthrop  (1  Johns.  329), 

174,  183. 
Burbank  v.  Posey  (7  Bush,  373), 

123. 
Burbridge  v.   Manners    (2   Camp. 

195),  337. 
Burch  V.  Hill  (24  Texas,  153),  324. 
Burch    V.  Tebbutt   (2  Stark.   74), 

377. 
Burchard  v.  Frazier(23  Mich.  228), 

380. 
Barchell  v.  Slocock  (2  Ld.  Raym. 

1545),  21. 
Burchfield  v.  Moore  (25  L.  &  Eq. 

123),  394. 
Burden  v.   Southerland    (70  N.  C. 

528),  35. 
Burdette   v.  Clay  (8  B.  Mou.  287), 

305. 
Burdick  17.  Greene  (15  Johns.  247), 

247,  379. 
Burges  v.  Pollock  (53  Iowa,  273), 

52. 
Burgess  v.    Chapin  (5   R.  I.    225), 

244. 
Burgess   v.   Dewey    (36   Vt.   618), 

424. 
Burgess  v.  Merrill  (4  Taunt.  468), 

51. 
Burgess  v.  Northern  Bk.  of  Ken- 
tucky (4  Bush,  600),  230,  399. 
Burgess   v.  Vreeland  (4  N.  J.  71), 

337,  346,  347. 
Burgh  V.  Legge  (5  M.   &  W.  418), 

348. 
Burhaus  v.  Hutcheson  (25  Kan.  631 

(1881),  305. 
Burke  v.  Allen  (29  N.  H.  106),  262. 
Burke  v.  Bishop  (27  La.  Ann.  465), 

160,  252,  447. 
Burke  v.  McKay  (2  How.  66),  321, 

322. 
Burke   v.   Wilber    (42   Mich.  329), 
98. 

53 


Burkham  v,  Trowbridge  (9  Mich. 

209),  346. 
Burmester    v.    Barron    (17    Q.  B. 

828),  342. 
Burmester  v.  Hogarth  (11  M.  &  W. 

97),  257ffl. 
Burns  v.  Lynde  (6  Allen,  305),  35. 
Burnett   v.    Tidmarsh    (5    Bradw. 

341),  211. 
Burnham  v.  Allen    (1  Gray,   469), 

29d. 
Burnham  v.  Hunter  (73  Mo.  172), 

226. 
Burnham  v.  Webster  (16  Me.  232), 

127,  (17  Me.  50),  218,  363. 
Burnham  v.  Wood  (8  N.  H.  334), 

269. 
Burr  V.  Smyth  (21  Barb.  262),  371. 
Burr  V.  Wilson  (26  Ind.  389),  204. 
Burrall  v.  Bushwick  (75  N.  Y.  220), 

497. 
Biirrill  v.  Parsons    (71   Me.   282), 

173,  280. 
Burrill-y.  Smith  (7Pick.  291),  259, 

357,  415. 
Burrough   v.    Moss    (10    B.  &   C. 

558),  63,  262,  295. 
Burroughs  v.  Bank  of  Charlotte  (70 

N.  C.  284),  465. 
Burrouglis    v.  Richman   (1  Green 

(N.  J.)  233),  57. 
Burrows   v.  Hanegan   (1   McLean, 

309),  362. 
Burrows  v.  Keays  (37  Mich.  431), 

247. 
Burson  v.   Huntington    (21   Mich. 

415),  282. 
Burt  V.  Walker   (4  B.  &  Aid.  697), 

33. 
Burton  v.  Baxter  (7    Blackf.  297), 

305. 
Burton  y.  Brooks  (25  Ark.  215),  29. 
Burton    v.   Schermerhorn    (21  Vt. 
289),  201. 

833 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Burton  v.  Slaughter  (2G  Gratt.  91'.)), 

372,  426. 
Burton  v.  Wynne  (55  Ga.  615),  251. 
Bushu.  Baldry  (11  Allen,  307),  375. 
Bush  V.  Brown  (49    lud.  573),  287. 
Bush  V.  Pickard  (3  Harr.  38.")),  165, 

168. 
Bushworth    v.   Moore    (36  N.    H. 

144),  327. 
Bussai'd  V.    Levering    (6    Wheat. 

192),  316,  337,  338,  340,  341,  348. 
Bussey  v.  Whitaker  (2Nott  &  McC. 

374),  33. 
Butler  V.  Dunham   (27    111.    474), 

481. 
Butler  V.   Duval  (4  Yerg.  265),  336. 
Butler  V.    Horwitz  (7  Wall.   259), 

375. 
Butler  V.  Mulvihill  (1  Bligh,  137), 

57. 
Butler  V.     Muuson    (18    La.   Ann. 

363),  295. 
Butler   V.   Paine  (8  Minn.  324),  29. 
Butler  V.  Prentiss  (6  Mass.  430), 

222. 
Butler  V.   Stocking  (4  Seld.  108), 

98. 
Butter  V.  Baker  (3  Rep.  26),  63. 
Butts  V.  Dean  (2  Met.  76),  380. 
Buxton  V.  Jones  (1  Man.  &  G.  83), 

313,  314. 
Buy  V.  Sprader  (50  Miss.  330),  41a. 
Byars  v.  Doore  (20  Mo.  284),  84. 
Byers  v.   Harris    (9    Heisk.  652), 

86,  154. 
Bynum  v.  Apperson  (9  Heisk.  625), 

314. 
Bynum  v.  Rogers  (4  Jones  L.  399), 

292. 
Byrd  v.  Bertrand  (7  Ark.  327),  230. 
Byrdv.  HoUoway  (6  Sm.&M.  199), 

147,  170. 
Byrora  r.  Thompson  (11  Ad.  &  El. 

31), 394. 

834 


C. 


Cabot  Bank    v.    Morton  (4   Gray, 

158),  244,  245,  399. 
Cabot  Bank  v.  Warner    (10  Allen, 

524),  338,  339,  341. 
Cadwalader  U.Hartley  (17Ind.520), 

251. 
Cady  V.    Shepherd  (12   Wis.    713), 

158,  260,  261,  271,  272. 
Cahal  V.  Frierson  (3  Humph.  411), 

261. 
Cahokia  School  Trust  ■0.  Eautenburg 

(88  111.  219),  123,  137. 
Cahounu.  Moore  (11  Vt.  604),  148. 
Cain  V.  Southern  Express   Co.  (1 

Baxt.  315),  183. 
Caisteru.  Eccles  (1  Ld.  Raym.  683), 

241. 
Caldwell  v.  Cassaday  (8  Cow.  271), 

30,  227,  310. 
Calfee  v.  Burgess  (3  W.  Va.  274), 

185. 
Calhoun??.  Calhoun  (2  Strobh.231), 

62. 
Callander  v.  Kirkpatrick  (Thomson 

on  Bills,  112),  394. 
Callislier  v.  Bischoffsheim  (L.  R.  5 

Q.  B.  449),  174. 
Gallon  V.  Lawrence  (3  M.  &  S.  95), 

396. 
Calway  v.  Harold  (61  Ga.  Ill),  273. 
Calvert  V.  Williams  (64  N.  C.  168), 

199. 
Camden  v.  Doremus  (3  How.  515), 

318,  415. 
Camden  v.  M'Coy  (3  Scam.  437), 

270,  272. 
Camden  n.  Mullen  (29  Cal.  566),  61, 
Camidge  v.  Allenby  (C.  B.  &  C.  373), 

244,  379. 
Cammer  r.    Harrison    (2  McCord, 

246),  315. 
Camp  V.  Bates  (11  Conn.  488),  348. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Camp  V.  Clark  (14  Vt.  387),  296. 
Camp  V.  Knox  Co.  (3  Lea   (Teuu.) 

199),   138. 
Campbell  v.  French  ((3  T.  R.  200), 

321. 
Campbell  v.  Humphreys  (2  Scam. 

478),  373. 
Campbell  v.  Kenosha  (5  Wall.  196, 

200),  481, 
Campbell  v.  Knapp  (15  Pa.  St.  27), 

417. 
Campbell  v.  Kuhn  (45  Mich.  531), 

52,  55. 
Campbell  v.   Miss.    Union  Bk.    (6 

How.  (Miss.)  625),  464. 
Campbell  v.  Nichols  (33  N.  J.  L.  88) , 

288,  506,  511. 
Campbell  v.  Pettengill  (7  Greeuleaf , 

126),  227,  355. 
Campbell  v.  Polk  Co.  (3  Iowa,  467), 

1S9. 
Campbell  v.  Eobins  (29  Ind.  271), 

273. 
Campbell  v.  Richardson  (10  Johns. 

406),  188, 
Campbell  v.  Sloan  (62  Pa.  St.  481), 

196,  199. 
Cambell  v.  Weister  (1  Litt.  30),  29. 
Can  V.  Read  (3  Atk.  695),  447, 
Canal  Bk.  v.  Bk.  of  Albany  (1  Hill, 

287),  230,  259,  373,  399,  451. 
Cannan  v.  Bryce  (3  B.  &  Aid.  179), 

198. 
Cannon  v.  Caufleld  (11  Neb.  506), 

291. 
Cannon  v.  Gibbs  (1  McCord,  370), 

310,  421. 
Caphart  v.  Dodd  (3  Bush,  584),  124. 
Capps  V.  Gorham  (14  111.  198),  295. 
Capron  v.  Capron  (44  Vt.  412),  25. 
Cardell  v.  McNeil  (21  N.  Y.  336), 

244,  418. 
Cardwell  v.  Allan  (33  Gratt.  167), 

335. 


Cardwill  v.  Hicks  (37  Barb.  458), 

165,  168. 
Carey  v.  Green  (7  Ga.  79),  467. 
Carey  v.  McDougald  (7  Ga.  84),  486. 
Cariss  v.  Tattersall  (2  Man.  &  G. 

890),  394.  . 
Carliu  v.  Kenealy  (12  M.  &  W.  139), 

25. 
Carlisle  v.  Hill  (16  Ala.  405),  292. 
Carlisle  v.  Hooks  (7  Me.  129),  227. 
Carlisle  v.  Wishart  (11  Ohio,  172), 

165,  168. 
Carlton   v.  Bailey  (27  N.  H.  234), 

179,  198,  296. 
Carlton  v.  Woods  (28  N.  H.  292), 

179. 
Carmichael  v.    Bank  of  Penn.    (4 

How.  (Miss.)  567),  211,  217,  363. 
Carnegie  ■».  Morrison  (4  Mete.  406), 

226,  507. 
earner  v.  Cameron  (31  Mich.  373), 

99. 
Carolina  N.  B.  v.  Wallace  (13  S.  C. 

347),  336,  338,  339,  366. 
Carpenter     v.     Farnsworth     (106 

Mass,  561),  18,  124. 
Carpenter  v.   Longau     (16     Wall. 

271),  305. 
Carpenter  v.  Minturn  (6  Lans.  56), 

172,  203. 
Carpenter  v.  Murphee  (49  Ala,  84), 

170, 
Carpenter  v.    Northborough    Nat, 

Bank  (123  Mass.  69),  400. 
Carpenter  v.   Oakes  (10  Rich,  17), 

270. 
Car  V.   LeFevre  (27  Pa,    St.  413), 

474,  477. 
Carr  v.  Nat.  Sec.  Bank  (107  Mass. 

45),  209,  436,  452. 
Carr    v.   Rowland    (14    Tex.   275), 

270. 
Carr  v.  Silloway   (111  Mass.   24), 
160. 

835 


TABLE    OF    CASES    CITED. 


Can-oil   V.    HayvTRYd 

120),  289. 
Carroll  v.  Peters  (1  McGloiu  (La.) 

SS),  295. 
Carroll  v.  Weld  (13  111.  482),  270. 
Carrollton  Bauk  v.  Tayleiir  (10  La. 

(o    s.)  490),  226. 
Carruth  v.  Carter  (26 La.  Ann.  231), 

201. 
Carruth  v.   Walker   (8   Wis.  252), 

2576. 
Carruthers  V.  West  (11  Q.B.  (G3  E. 

C. L.  R.)  143),  295. 
Carson  v.  Bank  of  Alabama  (4  Ala. 

148),  343. 
Carson  v.  Hill  (1  McMull.  76),  172a. 
Carson  v.  Russell  (26  Texas,  452), 

218. 
Carstairs  v.   Rolleston    (5  Taunt. 

551),  232,  422, 
Carter  v.  Bradley  (19  xMe.  62),  345. 
Carter  v.  Brown  (6  Humph.  548), 

324. 
Carter  v.  Burley  (9  N.  H.  558),  3, 

321,  326,  337. 
Carter  v.  Flower  (16  M.  &  W.  743), 

215,  348,  355,  357. 
Carter  v.  Peuu  (4  Ala.  140),  29. 
Carter  v.  Sanders  (2  How.  (Miss.) 

851),  146,  148. 
Carter  v.  Sprague    (51   Cal.   239), 

266,  365. 
Carter    v.    Thomas    (3    lud.   213), 

146. 
Carter  v.  Union  Bank  (7  Humph. 

543),  3,  .321,  324,342. 
Carter  v.  Whalley  (1  B.  &  Ad.  11), 

106. 
Carver  v.  Hayes  (47  Me.  257),  23. 
Carville  v.  Crane  (5  Hill,  583),  222. 
Cary,  Ex'rs  of  Greatorex  v.  Gerrish 

(4Esp.  9),  455. 
Cary,  Ex'rs  of  Greatorex  v.  White 

(52  N'.  Y.  138),  424. 

836 


References  are  to  Sections. 

(124    Mass. 


Casborne  v.  Button  (1  Selwyn's  N. 

P.  401),  23. 
Casco  Bank?;.  Keene  (53  Me.  104), 

288,  398. 
Casco  Bk.  V.  Mussey  (19  Me.  20), 

313. 
Case  V.  Burt  (15  Mich.  82),  217. 
Case  >;.  Gerish  (15  Pick.  49),  193. 
Case  V.  Henderson  (23  La.  Ann.  49), 

452. 
Case  V.  Jennings  (17  Tex.  661),  77. 
Case  V.  Morris  (31  Pa.  St.  100),  442. 
Cash  V.  Kennion  (11  Ves.  314),  410, 

511. 
Cash  V.  Taylor  (8  Law  J.  262),  79. 
Cashman  v.  Haynes  (20  Pick.  132), 

28. 
Cass  V.  Dillon  (2  Ohio  St.  398),  481. 
Cassebeer  v.  Kalbfleisch  (18  N.  Y. 

S.  C.  (11  Hun)  123),  292. 
Cassell  V.  Dowes  (1  Blatchf.  C.  C. 

335),  226. 
Castle  V.  Belfast  Foundry  Co.  (72 

Me.  167),  123. 
Gate  V.  Patterson  (25  Mich.  191), 

486,  488. 
Cathcart  v.   Gibson    (1    Rich.  10), 

365. 
Catlin  V.  Gunier  (6  Kern.  368),  292. 
Catlin  V.    Haddox  (49  Conn.  492), 

50.* 
Catron  v.  First  Universalist  Society 

(46  Iowa,  106),  119. 
Catskill  Bank  v.   Stall   (15  Wend. 

364),  100. 
Catton  V.  Simpson  (8  Ad.  &  El.  136), 

394. 
Caulkins  v.  Fry  (35  Conn.  170),  57. 
Caulkins  v.  Whisler  (29  Iowa,  495), 

284. 
Caunt  V.  Thompson  (7  C.  B.  400), 

347,  356. 
Cavazos  v.  Trevins  (6  Wall.  773)^ 

272. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Cavenah    v.     Somerville    (Dallam 

(Tex.),  534),  295. 
Cavender  v.   Waddingham  (5  Mo. 

App.  457),  57. 
Caverick  v.  Vickery  (2  Doug.  652), 

262. 
Caweiu  v.  Browinski  (6  Bush,  457), 

443. 
Cayuga  Co.  Bk.  v.  Bennett  (5  Hill, 

236),  336,  338 
Cayuga  Co.  Bk.  v.  Dill  (5  Hill,  404), 

364. 
Cayuga  Co.  Bk.   v.  Hunt    (2  Hill, 

635),  212,  214,  225,  313,  337. 
Cayuga  Co.  Bk.  v.  Warden  (I  New 

York,  413),  310,  345. 
Cazet  V.  Hicks  (29  Gratt.  1),  412. 
Cazet  V.  Kirk  (4  All.  N.  B.  543),  28. 
Cecil  Bk.  v.   Heald  (25  Mo.  562), 

165. 
Cedar  Falls  Co.  v.  Wallace  (83  N. 

C.  229),  355. 
Centourier  v.  Hastie  (8  Exch.  39), 

86. 
Central  v.  Wilcoxen  (3  Col.  566) , 

140. 
Central   Bk.   v.  Allen  (16  Me.  41), 

314,  358. 
Central  Bk.  v.  Davis  (19  Pick.  376), 

266,  363. 
Central  Bk.  v.  Hammett  (50  N.  Y. 

159),  280,  292,294. 
Central  Bank  of  Brooklyn  v.  Lang 

(1  Bosw.  202),  243. 
Central  Nat.  Bank  v.  Adams  (US. 

C.  452),  359. 
Central  Nat.  Bk.  v.  Charlottevllle, 

etc.,  K.  R.  Co.  (5  S.  C  156),  32. 
Central   Savings    Bk.   v.  Richards 

109  Mass.  413),  225,226. 
Central  Savings  Bk.  v.  Shines  (48 

Me.  461),  420. 
Chaddock  v.  Van  Ness  (6  Vroom, 

518),  170,  270,  272,  273. 


Chadsey  v.  McCreery  (27  111.  253), 

126. 
Chad  wick  v.  Allen  (2  Strange,  706), 

17. 
Chadwick  v.  Eastman  (53  Me,  16), 

392. 
Chains  V.  McCrum  (22  Kan.  157), 

•244,  260. 
Chalmers  v.  Lanier  (1  Camp.  383), 

295. 
Chalmers   v.    McMurdo  (5    Munf. 

252),  260,  261. 
Challoner  v.  Bouck  (56  Wis.  652), 

75. 
Chamberlains.  Huson  (5  Mod.  71), 

61. 
Chamberlain  v.  Pacific  Wool    Co. 

(54  Cal.  103),  123. 
Chamberlains.  Townsend  (26  Barb. 

611),  288. 
Chambers  v.  George  (5  Lit.   335), 

375. 
Chambers  v.  Hill  (26  Texas,  472), 

215,  216. 
Chambers  v.   Seay   (73  Ala.  372), 

80. 
Chandlers.  Glover  (32  Pa.  St.  509), 

50. 
Chandler  v.  Johnson  (39  Ga.  85), 

179,  183. 
Chandler  v.  Mason  (2  Vt.  193),  173. 
Chandler  v.  Parks  (3  Esp.  76),  51. 
Chandler    v.    Ruddick    (1    Carter, 

(Ind.)  391),  13. 
Chandler  v.  Westfall  (30  Tex.  477), 

270. 
Channing    Canal    Bank  v.    Super- 
visors (5  Denio,  517),  142. 
Chanoiue  v.  Fowler  (3  Wend.  173), 

326,  335. 
Chapiu  V.  Vt.  and  Mass.  R.  R.    (8 

Gray,  575),  473. 
Chapman  r.    Black    (2    B.  &  Aid. 

590),  178,  179,  180. 

837 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Chapman  u.  Chapman  (13  lud.  39(1), 

47. 
Chapman    v.     Commissioners    (25 

Gratt.  721),  377. 
Chapman  v    Cotterell  (34  L.  J.  (n. 

S.)  18G),  221,250. 
Chapman  v.  Cowles  (41  Ala.  103), 

375. 
Chapman  v.  Durant  (10  Mass.  51), 

37'.). 
Chapman   v.    Eddy    (13  Vt.  20.)), 

204. 
Chapman  y.  Foster  (119  Mass.  189), 

125. 
Chapman  v.  Hughes  (61  Miss.  339), 

4G. 
Chapman  v.   Keene    (3  Ad.  &  EI. 

193),  335. 
Chapman  v.  Lipscombe  (1  Johns. 

294),  359. 
Chapman  v.    Robertson  (6  Paige, 

(527),  60,  506,  511. 
Chapman  v.  Rose  (56  N.  Y.  137), 

259,  285. 
Chapman  v.  White  (6  N.  Y.  412), 

5c,  209,  452,  453. 
Chapell    V.   Brockway    (21    Wend. 

127), 190. 
Chard  v.  Fox  (14  Q.  B.  200),  347. 
Charles  v.  Blackwell  (2  Comp.  PI. 

Div.  H.  C.  J.  151),  431. 
Charles  v.  Dennis  (42  Wis.  56),  273. 
Charles  r.  Marsden  (1  Taunt.  224), 

158,  232,  269,  295,301. 
Charnley  v.  Dallas   (8  Watts  &  S. 

353),  486. 
Chartresu.  Cairnes  (16  Mart.  (La.) 

1),  506. 
Chase  v.   Alexander    (G  Mo.  App. 

506),  5a. 
Chase   v.  Haughton  (16  Vt.    594), 

251. 
Chase  v.  Redding  (13  Gray,  418), 

252. 

838 


Chase  r.  Taylor  (4  liar.  &  J.  54), 

32G. 
Chase  v.  Weston  (12  N.  H.  413), 

201,  202. 
Charter  v.  Bell  (4  Esp.  48),  324. 
Chautauqua  Co.  Bk.  v.  Supervisors 

(21  Wend.  584),  312. 
Chauncey  v.  Arnold  (24  N.  Y.  330), 

35. 
Chenowith   v.    Chamberlain    (6  B. 

Mon.  60),  3,  98,  324. 
Cherry  v.  Miller  (7  B.  J.  Lea,  305), 

304. 
Chesbrough  v.   Wright  (41  Barb. 

28),  168,  1G9. 
Cheshire    v.    Barrett    (4  McCord, 

241),  48,  50. 
Chesner  v.  Noyes    (4  Camp.  129), 

327. 
Chester  v.  Door  (41  N.  Y.  270),  295. 
Chester,  etc.,  R.  R.  Co.  v.  Lickiss 

(72  111.  521),  34. 
Chew  V.  Bank  of  Baltimore  (14  Md. 

299),  58. 
Chews  Administrator  v.  Beall  (13 

Md.  348),  62. 
Chicago   Marine  Ins.  Co.  v.  Stan- 
ford (28  111.  168),  452. 
Chicago  V.  People  (56  111.  327),  476. 
Cliick    V.   Pittsburg  (24  Me.  458), 

337. 
Chick  V.  Trevitt  (20  Me.  462),  123. 
Chicopee  Bank  v.  Chapin  (8  Me.  40), 

163,  168,  293,  304. 
Chicopee  Bank  v.  Eager   (9  Melc. 

583),  339. 
Chicopee  Bankt;.  Philadelphia  Bank 

(8  Wall.  641),  34a,  318. 
Childs  V.  Monins  (2  Brod.  &  B.  460), 

146,  170. 
Childs    V.  Wyman  (44     Me.    433), 

270. 
Chipmanw.  Foster  (119  Mass.  189), 

124. 


TABLK    OF    CASES    CITED. 


References  are  to  Sections, 


Chipman  v.  Tucker  (38   Wis.  43), 

did,  286. 
Chisni  V.  Toomer  (27  Ark.  109) ,  393. 
Chitwood  V.  Cromwell    (12  Heisk. 

(158),  145. 
Cholmely  v.   Darley  (14   M.   &  W, 

344),  41. 
Chom  V.  Merrill  (9  La.  Ann.   533), 

270. 
Chouteau  v.  Allen  (70  Mo.  339),  25, 

82,  291,  297. 
Chouteau  v.  Leech  (6  Harris  (Pa.) 

224),  82. 
Chouteau  v.  Merry  (3  Mo.  254),  59, 

61. 
Chouteau  u.  Paul  (3  Mo.  260),  87. 
Chouteau  v.  Webster  (6  Met.   1), 

342. 
Christian  Church  v.   Johnson    (53 

Ind.  273),  117. 
Christian  v.  Morris   (50  Ala.  585), 

146. 
Christmas  v.   Mitchell  (5  Ire.  Eq. 

535),  52. 
Christmas  v.  Eussell  (14  Wall.  84), 

5a,  5c. 
Chrysler  v.  Kendis  (42  N.  Y.  209), 

29,  166. 
Chrysler  v.  Kenois  (43  N.  Y.  209), 

169. 
Churchy.  Barlow  (9 Pick.  547),  232. 
Church  V.  Clark  (21  Pick.  310),  317. 
Church  V.  Howard  (24  N.  Y.  S.  C. 

(16  Hun)  5),  394. 
Church  u.  Maloy  (70New  York,  63), 

424. 
Churchill  v.  Gardiner  (7  T.  R.  596), 

34,  Sib. 
Churchman  v.  Martin  (54  Ind.  380), 

28,  196. 
Chute  V.  Pattee  (37  Me.  102),  424. 
Cicotte  V.    Gaynier  (2  Mich.   381), 

805. 
Cidne  v.  Chidester  (85  111.  523),  25. 


Citizens   Bank    v.   Payne    (18    La. 

Ann.  222),  168. 
Citizens  Nat.  Bank  v.  Hooper  (47 

Md.  88),  289. 
Citizens    Nat.  Bank  v.   Ferry   (32 

La.  Ann.  120),  249. 
Citizens  Nat.    Bank    v.  Richmond 

(121  Mass.  110),  392. 
City   V.  Alexandria    (23   Mo.  483), 

481. 
City  V.  Lamson  (9  Wall.  477),  471. 
City  Bank  v.  Cutter  (3  Pick.  414), 

315,  316,  348. 
City  Bank  v.    Dearborn  (20  N.   Y. 

244),  106. 
City  Bank  v.  Farmers  Bank  (Taney 

C.  C.  119),  464. 
City  Bank  17.  Goodrich  (3  Col.  137), 

270. 
City  Bank  v.  McChesney  (20  N.  Y. 

240),  106. 
City  Bank  v.  Perkins  (29  N.  Y.  554), 

120,  292. 
City  Nat. .  Bank  v.   Mahan    (21   La. 

Ann.  753),  456. 
City  of  Aurora  v.  West  (9  Ind.  74), 

481,  482. 
City  of  Bridgeport  v.  Housatonic 

R.  R.  Co.  (15  Conn.  475),  481. 
City  of  Elizabeth  v.  Force  (29  New 

Jersey  Eq.  587),  473,  475. 
City  of  Galena  v.  Corwith  (48  III. 

423),  133, -134,  480. 
City  Kenosha  v.  Lamson  (9  Wall. 

478),  474,  475,477,  478,  481. 
City  of  Lexington  v.  Butler   (141 

Wall.   295),    473,   474,   475,   478, 

480. 
City  of  St.  Louis  v.  Shields  (62  Mo. 

247),  118. 
City  of  Williamsport  v.  Common- 
wealth (84  Pa.  499),  133,  480. 
Claflin  V.  Farmers  (25  N.  Y.  293), 
I       438,  439. 

839 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Claflin  V.  Wilson  (51  Iowa,  15),  83,  j  Clark  v.  Moses  (50  Ala.  326),  U8. 

2G8. 
Clagett  V.  Salmon  (5  Gill  &  J.  314), 

424. 
Clarapit   V.   Newport   (8  La.  Ann. 

124),  148. 
Clapp  V.  County  of  Cedar  (5  Clarke, 

15),  473. 
Clapp  V.  Rice    (13  Gray,  403),  261, 

270,  272. 
Clarcmont  Bank  v.  Wood   (10  Vt. 

582),  422. 
Claridge  v.   Daltou  (4  Maule  &  S. 

226),  355,  423. 
Clark  r.  Bank  (2  McArth.  249),  431, 

442. 
Clark  V.   Blackstock    (Holt  N.  P. 

474),  394. 
Clark  V.  Boyd  (2  Ohio,  56),  34,  148, 

250. 
Clark  V.  Caldwell   (6  Watts,  139), 

67. 
Clark  V.   Conner   (2    Strob.  346), 

506. 
Clark  V.  Deaderick   (31  Md.  148), 

295. 
Clark  V.  Devlin   (3  Bos.  &  P.  363), 

415,  424. 
Clark  V.  Eldridge  (13  Met.  96),  346. 
Clark    V.   Farmers    Woolen    Man. 

Co.  (15  Wend.  256),  32,  115,  117, 

242. 
Clark,  In  re  (14  M.  &  W.  469),  103. 
Clark  V.  Iowa  City  (20  Wall.  583), 

117,  471,  476,  478. 
Clark  V.  Janesville    (10  Wis.  136), 

471,  473. 
Clark  V.  King  (2  Mass.  524),  242. 
Clark  V.  Litcomb  (42  Barb.   122), 

374. 
Clark  r.   Loomis    (5    Duer,   468), 

292. 
Clark  V.   Merriam  (25  Conn.  576), 

270,  310. 

840 


Clark  V.  Nat.  Metropolitan  Bank  (2 

McArth.  249),  442,  443. 
Clark  V.  Peace  (41  N.  H.  414),  287. 
Clark  V.  Polk  Co.  (19  Iowa,  248), 

135,  138,  139,  140. 
Clark  V.   Pomeroy,  (4  Allen,  534), 

183. 
Clark  I'.  Reed,  (12  Smed.  &  M.  554), 

366. 
Clark  V.  Ricker  (14  N.  H.  44),  178, 

179,  180,  198. 
Clark   V.   School  District    (3  R.  I. 

199),  115,  133,  134,  139. 
Clark  t7.  Sisson  (4  Duer,  408),  288, 

293. 
Clark  V.  Small  (16  Yerg.  418),  157. 
Clark  V.   Thayer   (105  Mass.  217), 

300,  301 . 
Clark  V.  Tyler  (105  Mass.  216),  158, 
Clark  V.  Whitaker    (50  N.  H.  474), 

248. 
Clark  V.  Young    (1  Cranch,    181), 

379. 
Clark  V.  Cock  (4  East,  57),  226,  227. 
Clarke  v.    Des    Moines  (19  Iowa, 

199),  133,  134,  135,  138,  139,  480, 

482. 
Clark  V.  Gordon  (3  Rich.  311),  223, 

227. 
Clarke  r.  Hampton  (1   Hun,  612), 

162. 
Clarke  v.  Johnson  (54  HI.  296),  282. 
Clarke  r.  Leslie  (5Esp.  28),  46. 
Clarke  v.  Morey  (10  Johns.  70),  80. 
Clarke  v.  Percival  (2  B.  &Ad.  660), 

26,  28. 
Clarke  v.  Russell  (3  Dallas,  295), 

321. 
Clarke  v.  Scott  (45  Cal.  86),  377. 
Clarke  v.  Sigoiirney  (17  Conn.  511), 

10,  34,  148. 
Clarke   r.  Sharp  (3   M.  &  W.  166), 

;U2. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Clarke  v.   Smith    (21  Miun.   539), 

205. 
Clarke  v.  Trevitt  (20  Me.  662),  124. 
Clarke  Nat.  B'k  v.  Bauk  of  Albion 

(52  Barb.  592),  120,  438,  439. 
Clasey  v.  Sigs  (51  Iowa,  373),  305. 
Clason  V.  Bailey   (14  Johus.  484), 

12. 
Clausert'.  Stone  (29  111.  116),  28. 
Claxton   V.    Swift   (2  Show.   496), 

152. 
Clay  .V.   Cottrell  (18  Pa.  St.  408), 

101,295. 
Clay  V.  Edgertou  (19  Ohio  St.  549), 

310,  415,  421. 
Clay  V.    Oakley    (17    Mart.    (La.) 

137),  336. 
Clayton  v.  Gosling  (5  B.  &  C.  360), 

24,  31. 
Clayton  v.  Merritt  (52   Miss.  353), 

80. 
Clegg  V.  Cotton  (3  Bos.  &  P.  239), 

355. 
Clegg  r.     Lemesurier   (15     Gratt. 

108),  32. 
Clegg  V.  Levy  (3  Camp.  166),  510. 
Clements  v.  Hull  (35  Ohio  St.  141), 

29c. 
Clements  v.    Reppard  (15  Pa.  St. 

11), 154. 
Clerk  V.  Blackstock   (Holt's  N.  P. 

C.  (3  E.  C.  L.  R.)  474),  13. 
Clerke  v.  Martin  (2  Ld.  Raym.  757), 

6. 
Clendennin  v.  Southerland  (31  Ark. 

20),  269. 
Cleveland  v.  Williams    (29  Texas, 

204),  80. 
Cleveland  w.  Worrell  (13  Ind.  545), 

366. 
Cleveland  v.   Stewart  (3    Ga.  283), 

124. 
Clinton  Nat.    Bk.     v.   Graves    (48 

Iowa,  228),  34c. 


Clode  V.  Bayley  (12  L.  J.  Exch.  17), 

335. 
Clopper  V.  Union  Bank  (7  Harr.  & 

J.  92),  232,  379. 
Cloptonv.  Elkin  (46  Miss.  95),  179. 
Clopton  V.  Hall  (51  Miss.  482),  157. 
Closson  V.  Stearns    (4  Vt.  11),  12, 

265. 
Clothier  v.  Adriance  (51  N.  Y.  322), 

165. 
Cloud  V.  Whiting  (38  Ala.  57),  288. 
Clough  17.  Baker  (48  N.  H.  254),  204. 
Clough  V.  Davis  (9  N.  H.  500),  34c. 
Clough  V.  Patrick  (37  Vt.  421),  203. 
Clouston    V.    Barbiere    (4     Sueed, 

336),  310. 
Clowes  V.  Chaldecott  (7   L.  J.  K. 

B.  147),  337. 
Clute  V.  Small  (17  Wend.  238),  392. 
Cobb  V.  Titus  (10  N.  Y.  198),  172«, 

293. 
Coburu  V.  Ware  (30  Me.  202),  164, 

201. 
Coburn  v.  Webb    (56  Ind.  96),  35, 

283,  393. 
Cocheco    Nat.  Bk.  v.    Haskell  (51 

N.  H.  110),  120,  121. 
Cohen  v.  Hunt  (2  Smed.  &  M.  227), 

317. 
Cochran     v.    Atchison     (27     Kan. 

(1882)  728),  259. 
Cochran  v.  Nebeker  (48  Ind.  459), 

393. 
Cock  V.  Fellows  (1  Johns.  143),  17. 
Cockrell    v.    Kirkpatrick    (9    Mo. 

688),  29. 
Cockrill  V.   Lowenstine  (9  Heisk. 

206),  327. 
Cocks  V.   Masterraan    (1    B.  &  C. 

902),  31,  400. 
Cockshott  V.  Bennett  (2  T.  R.  763), 

193. 
Codraan  v.  Lubbuck  (5  Dowl.  &  R. 

289),  464. 

841 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Coffraan  v.  Campbell  (87  111.  (1878) 

98),  223,  225,  227. 
Coge  V.  Palmer  (16  Cal.  158),  292. 
Coggill  V.  American  Ex.   Bauk  (1 

Comst.  113),  259,  399. 
Coghliu  V.  May  (17  Cal.  615),  295. 
Cogle  V.  Eaph  (24  Minn.  194),  46, 
Cohen  v.  Prater  (56  Ga.  203),  242. 
Cohn  V.  Dutton  (60  Mo.  297),  270. 
Colbuni  V.  Averill  (30   Me.    310), 

417. 
Coldstone  v.  Toney  (6   Bing.  98), 

74. 
Coler.  Cushiug  (8  Pick.  48),  266. 
Cole  V.  Jessup  (10  N.  Y.  96),  311. 
Cole  V.  Merchants    (60  Ind.  350), 

419. 
•Cole  V.  Milmiue  (88  111.  349),  189. 
Cole  V.  Pennell   (2  Rand.  174),  48, 

51. 
Cole  r.  Sackett  (1  Hill,    516),  379, 

381. 
Cole  V.  Saulpaugh  (48  Barb.  104), 

165. 
Cole  V.  Saxby  (3  Esp.  159),  50. 
Cole  V.  Smith  (29  La.  Ann.   551), 

273. 
Cole  V.  Withers    (33  Gratt.   204), 

377. 
Colehau  v.  Cook  (Welles,  393),  25. 
Coleman  v.   Carpenter  (9  Pa.   St. 

178),  337. 
Coleman  v.  Davies    (45  Ga.   489), 

170. 
Coleman  v.   Sayer  (1   Barn,    303), 

315,  316. 
Coleman  v.  Smith  (26  Pa:  St.  255), 

327. 
Coleman  v.  Woolley  (10  B.   Men. 

320),  62. 
Coles  V.  Frecothick  (9  Ves,  274) ,  89. 
Coles  V.  Jones  (2  Vern.  692),  242. 
Colgate  V.   Buckingham  (39  Barb. 

177),  296. 
842 


Colgin  V.  Ileuley  (6  Leigh,  85),  418 
Coliger  u.  Francis  (58   Tenu.  423), 

291,  293, 
Colkett  V.  Freeman   (2  T,  R,  59), 

337. 
Collenridge    v.     Farquharson     (1 

Stark.  259),  163. 
Collier    v.    Baptist    Ed'al    Society 

(8  B,  Mon.  68),  161. 
Collier  v.  Gray  (1  Tenn.  110),  24. 
Collier  w.  Nevill  (3  Dev.  31),  292. 
Collier  v.  Waugh  (64  Ind.  456).,  183. 
Collins,  Ex  parte  (2  Cox,  427),  447. 
Collins  V.  Bradbury    (64  Me,  37), 

26. 
Collins   V.  Buckeye   State  Ins.  Co. 

(17  Ohio  St.  215),  85,  87. 
Collins    V.  Butler   (2    Stra,   1087)^ 

213. 
Collins  V.  Gilbert  (94  U.  S.  757), 

154,  178,  269,  303. 
Collins  V.  Johnson  (16    Ga.   458), 

127,  262. 
Collins  V.  Larrenburg  (19  Ala.  68.5), 

62, 
Collins  V.  Lincoln  (11  Vt,  268),  29. 
Collins  V.  Makepeace  (13  Ind,  448), 

392. 
Collisv.  Emett  (1  H,  Bl.  313),  19. 
Collins  V.  Trotter  (81  Mo.  275),  310, 
Colson  V.  Arnot  (57  N,  Y,  253),  259. 
Colt  V.  Barnard  (12  Pick.  260),  336, 
Coman  v.  The  State  (4Blackf.  241), 

424, 
Combs  V.  Ingram  (4  D.  &  R.  211), 

170. 
Commercial  Bk,   v.  Barksdale    (3© 

Mo,  563),  322,  324,  325. 
Commercial  Bk,  v.  Benedick  (18  B 

Mon.  311),  467. 
Commercial  Bk.  v.  Cunningham  (24 

Pick,  270),  2.32, 
Commercial  Bk.  v.  Grove  (15  La. 

113),  340. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Commercial  Bk.  v.  Hamer  (7  How. 

(Miss.)  448),  317. 
Commercial    Bk.    v.    Hughes    (17 

"Wend.  94),  444. 
Commercial  Bk.    v.    Kiug  (3  Rob. 

(La.)  243),  337. 
Commercial  Bk.  v.  Kirtwright  (22 

Wend.  348),  497. 
Commercial  Bk.  v.  Law  (127  Mass. 

72),  271. 
Commercial  Bk.  v.   Newport  Man. 

Co.  (1  B.  Mon.  13),  115,  123. 
Commercial  Bk.  v.  Norton   (1  Hill, 

501),  82,  89. 
Commercial  Bk.  v.  Routh    (7    La. 

Ann.  128),  4. 
Commercial  Bk.  v.  Strong  (28  Vt. 

31G),  340,  348. 
Commercial  Bank  v.    Varnum   (49 

New  York,  269),  322,  324. 
Commercial  Nat.  Bank  v.  First  Nat. 

Bank  (30  Md.  11),  289. 
Commercial  Nat.   Bank  v.   lola  (9 

Dill.  C.  C.  353),  481. 
Commercial  Nat.  Bank  v.   Proctor 

(98  m.  558),  108. 
Commissioners  v.  Bolles  (94  U.  S. 

104),  482. 
Commissioners  v.  Clark  (94  U.  S. 

285),  154,  178,  295,  303. 
Commissioners  of  Floyd  Co.  v.  Day 

(19  Ired.  450),  139,  142. 
Commissioners,  etc.,  v.  January  (94 

U.  S.  202),  482. 
Commissioners  of  Knox  Co.  v.  As- 

piuwall  (21  How.  539),  471,  478, 

480,  482. 
Commissioners    of     Knox    Co.  v. 

Nichols  (14  Ohio   St.    260),  481, 

482. 
Commissioners  of  Leavenworth  v. 

Keller  (6  Kan.  518),  138,  139. 
Commissioners  u.  Ross  (3  Bin.  250), 

424. 


Commissioners  of  Shawnee  Co.  w. 

Carter  (2  Kan.  115),  133. 
Commonwealth  v.    Butterick    (100 

Mass.  12),  20. 
Commonwealth  v.   Curry  (2  Dana, 

142),  35. 
Commonwealth  v.    Dullinger  (118 

Mass.  439),  20. 
Commonwealth  v.   Emigrants  Bk. 

(98  Mass.  12),  475. 
Commonwealth  v.  Emigrants  Ins. 

Co.  (98  Mass.  12),  28. 
Commonwealth    v.     Foster     (114 

Mass.  311),  38,  391. 
Commonwealth  v.    Hantz    (2    Pa. 

333),  46, 
Commonwealth  v.  Industrial  Emi- 
gration Sav.  Bk.(98  Mass. 12), 471. 
Commonwealths.  Johnson  (3  Cush. 

454),  183. 
Commonwealth  v.  Kendey    (2  Pa. 

St.  448),  34c. 
Commonwealth  v.  McWilliams  (11 

Pa.  St.  61),  481. 
Commonwealth  v.  Pease  (16  Mass. 

91),  183. 
Commonwealth    v.   Pittsburg    (34 

Pa.  St.  496),  134,  480. 
Commonwealth  v.  Powell  (11  Gratt. 

828),  273. 
Commonwealth    v.    Simonds     (14 

Gray, 69),  464. 
Commonwealth  v.   Stone    (4  Met. 

43),  466. 
Commonwealth    v.     Thomas     (10 

Gray,  483),  463,  464. 
Commonwealth  v.  "Ward  (2  Mass. 

397),  394. 
Commonwealth    v.   "Watmough    (6 

Wheat.  139),  497. 
Commonwealth  v.  Whitney  (1  Met» 

21),  201. 
Comparree     v.      Brockway        (11 

Humph.  358)  j  272. 

843 


TABLE    OF   CASES    CITED. 


References  are  to  Sections. 


Compton  V.  Blair  (27   Mich.  397), 

170. 
Comstock  V.  Hannah  (76  111.  530), 

289. 
Comstock  V.  Heir  (73  N.  Y.  269), 

168,  301. 
Comstock  V.  Smith  (22  Me.  262), 

380. 
Condon  v.  Pearce  (43  Md.  83),  259, 

266. 
Cone  V.  Baldwin  (12  Pick.  545),  289. 
Cone  V.  Brown  (15  Rich.  262),  312. 
Conine  v.  Junction,  etc.,  R.  R.   (3 

Houst.  289),  32,  242. 
Conkliu  V.  Ogborn  (7Ind.  553),  50. 
Conkling  v.  Gandall  (1  Keys,  228), 

442. 
Conkling  v.  King  (10  Barb.   372), 

380. 
Conley  v.  Wiu.sor  (41  Mich.  253), 

303. 
Conn  V.  Coburu  (7  N.  H.  368),  4G, 

48. 
Couu  V.  Thornton  (46  Ala.  587),  25. 
Connecticut  Mut.  Life  Ins.  Co.  v. 

Cleveland  R.  R.  Co.  (41  Barb.  9), 

474,  475. 
Connelly  v.  McKean  (64  Pa.  St.  113), 

217,  455. 
Conner  v.  Clark  (12  Cal.  168),  123, 

145. 
Connor  v.  Martin  (1  Strange,  516), 

63,  262. 
Conolly  V.  Goodwin  (5  Cal.  220), 

326. 
Conover  v.  Earl  (20  Iowa,  167),  258. 
Conover  v.  Porter  (14  Ohio,  450), 

35. 
Conro  V.  Port  Henry  Iron  Co.  (12 

Barb.  27),  219. 
Conroy  v.  Warren  (3  Johns.  259), 

355,  439,  440,  442,  444,  455. 
Consequa  v.  Willings  (1  Pet.  C.  C. 

225),  511. 
844 


Consolidated  Ass.   v.  Avegno  (28 

La.  552),  473. 
Converse  v.   Foster   (32  Vt.  828), 

178,  198. 
Conway  v.  Case  (22  111.  127),  455. 
Conyu.  Wheelock  (33  Me.  366),  106, 

262. 
Couyers  v.  Magrath    (4     McCord, 

392),  87. 
Cook  V.  Baldwin  (120  Mass.  317), 

222,  223. 
Cook   V.  Beech    (10  Humph.   413), 

379. 
Cook  V.  Bradley  (7  Conn.  57),  170. 
Cook  V.  Colehan  (2  Strange,  1217), 

25. 
Cook  V.  Crawford  (4  Texas,  420), 

3. 
Cook  V.  Darling  (2  R.  I.  385),  315. 
Cook  V.  Deaton  (3  C.  &  P.  114),  46. 
Cook  V.  Gray  (Hempstead  C.  C.  47) , 

315. 
Cook  f.  Googins  (126  Mass.  110), 

310. 
Cook  V.  Helms    (5  Wis.  107),  303. 
Cookv.  Husbands  (11  Md.492),62. 
Cook  V.  Larkin  (10  La.  Ann.  507), 

295. 
Cook  V.  Lillo  (103  U.  S.  793),  29b, 

29c. 
Cook  V.  Litchfield    (5   Seld.  286), 

345,  346,  506,  508. 
Cook  V.  Martin  (5  Smed.  &  M.  379), 

310. 
Cook  V.  Miltenberger  (23  La.  Ann. 

377),  226. 
Cookw.  Moffat  (5  How.  295),  506. 
Cook  V.  Sanford  (3  Dana,  237),  123. 
Cook  w.  Saterlee  (6  Cow.  108),  29c. 
Cook  V.  Seeley  (2  Exch.  749),  447. 
Cook  V.   Southwick  (9  Tex.   615), 

270. 
Cook    V.    Wolfcndale    (105    Mass. 

401),  204,  227. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Cook  V.Wright  (SOL.  J.  Q.  B.  321), 

174. 
Cooke  V.  Branch  Bk.    (3  Ala.  175), 

96. 
Cooke  V.  State  Nat.  Bk.  of  Boston 

(52  N.  Y.  96),  120,  438,439. 
Cookendorfer  v.  Preston  (4   How. 

317),  315. 
Coolbroth  v.  Purrington    (29   Me. 

469),  29d. 
Cooley  V.    Esteban    (26   La.  Ann, 

515),   124. 
Coolidge  V.  Brigham  (1  Met.  547), 

244. 
Coolidge  w.  Payson  (2  Wheat.  66), 

220,  226,  (3  Wheat.  66),  226,  500. 
Coolidge  V.  Ruggles  (15  Mass.  387), 

25,  242. 
Coolidge  V.  Wiggiu  (62  Me.  568), 

261. 
Coon  V.   Pruden    (25   Minn.  105), 

270. 
Coons  V.  Kendall  (27  La.  Ann,  443), 

145. 
Cooper  V.  Curtis  (30  Me.  488),  118, 

120. 
Cooper  V.  Dedrick  (22  Barb.  516), 

419. 
Cooper  V.  Earl  of  Waldergrave  (2 

Beav.  282),  507. 
Copenrath  v.  Kienby  (83  Ind.  18), 

53. 
Cooper  V.  Meyer  (10  B,  &  C.  468), 

230,  399. 
Cooper  V.  Poston  (1  Duval,  92),  20. 
Cooper  V.  Rankin  (5  Binn.  613),  75, 
Cooper  V.  Town  of  Thompson   (13 

Blatchf.  434),  471. 
Cooper  V.  Ulman  (Walk.    (Mich.) 

251), '305. 
Coor  V.   Callaway   (1    Esp.    115), 

219,  311, 
Coperthwaite  v.  Sheffield  (1  Sandf . 

416),  335. 


Copes     V.     Mathews     (10    Sm.   & 

Marsh   398),  136. 
Copp  V.  M'Dugall  (9  Mass.  1),  259, 

357. 
Copp  V.  Sawyer  (6  New  Hampshire, 

386),  159,  252, 
Coppock  V.  Bower  (4  M.  &  W.  .361), 

183,  198. 
Corbet  v.  Bk.  of  Smyrna  (2  Harr. 

235),  244,  466. 
Corbett  v.  Clark  (45  Wis.  403),  26, 

31. 
Corbett  V.  State  of  Georgia  (24  Ga. 

287),  25,  26. 
Coburn  v.   Odell   (20  N.  H.    540), 

179. 
Corby  i7.  Weddle  (57  Mo.  452),  285. 
Corcoran  v.  Dale  (32  Cal.  89),  393. 
Corcoran  w.  Powers  (6  OliioSt.  19), 

292. 
Corgau  V.  Freu  (39  111.  31),  28,  29c, 

265,  434, 
Corlettv.  Conway  (5  M.  &  W,  653), 

223. 
Cork  V.   Bacon  (45  Wis.  192),  15, 

17,  442. 
Corn  Exch'ng  Ins.  Co.  v.  Babcock, 

(42  N.  Y.  613),  62,  379. 
Cornay  v.  Da  Costa  (1  Esp,  302), 

355, 
Cornell  v.  Moulton   (3  Denio,  12);, 

24,  296,  315. 
Cornthwaite  v.  Eirst  Nat.  Bank  (57 

lud.  268),  146. 
Coruu  V.  Blackbourne  (2  Douglass, 

641),  66. 
Cornwell'o.  Humphrey  (9  lud.  135), 

29. 
Corp  V.   McComb    (1  Johns.  Cas. 

328),  337. 
Corser  v.  Craig  (1  Wash,  C.  C.  426), 

56. 
Corser  i;.  Paul  (41  N.  H.  24),  120, 

127. 

845 


TABLE    OF    CASES    CITED, 


References  are  to  Sections. 


Cory  V.  Scott  (3  B.  &  Aid.  (JIO),  3.")-). 
Co.sterv.  Thoraason  (19  Ala.  717), 

313,  33G. 
Costt'llo    V.   Crowell    (127    Mass. 

293),  41,  242. 
Costiiiau  V.  Hawkins  (22  Wis.  81), 

244. 
Coter.  Buck  (7  Mete.  588),  25. 
Cotes  V.  Davis  (1   Camp.  485),  G8, 

74,  262. 
Cottou  i\  McKenzie  (57  Miss.  418), 

179. 
Cottle  V.  Cleaves  (70  Me.  256),  178, 

198. 
Cotton  V.  Evans  (1  Dev.  &  B.  Eq. 

284),  100. 
Cotton  V.  Sterling  (20  La.  Ann.  282), 

295. 
Cottrell  V.  Conklin   (4  Duer,   45), 

271. 
Couch    V.    Meeker    (2  Conn.  302), 

Sid,  286. 
Couch   V.  Sherrill    (17    Kan.  624), 

326,327,  348. 
Couch  V.   Waring   (9   Conn.  261), 

423,  425. 
Coulter  V.    Richmond    (59    N.   Y. 

479),  271. 
Commissioners  v.  Chandler  (96  U. 

S.  205),  481. 
County  of   Calloway  v.  Fester  (93 

U.  S.  567),  481. 
County  of  Cass  v.  Gillette  (100  U. 

S.  585),  302,  481. 
County  of  Green  v.  Daniel  (102  U. 

S.  187), 476. 
County  of  Hardin  v.  McFarlan  (82 

111.  138),  480. 
County  of  Henry  v.  Nicolay  (95  U. 

S.  626),  480,  481. 
County  of  Moultrie  v.  Sav.  Bk.  (92 

U.  S.  631),  482. 
County  of  Ouachita  r.  Walcott  (103 

U.  S.  559),  138. 
846 


County  of   Pickens   v.  Daniel  (102 

U.  S.  187),  476. 
County  of  Kay  v.  Vansycle  (96  U. 

S.  687),  482. 
County  of  Randolph  v.  Post  (93  U, 

S.  502),  481,  482. 
County  of  Scotland  v.  Thomas  (94 

U.  S.  682),  481. 
County  of   Schuyler  v.  Thomas  (98 

U.  S.  173),  481. 
County  of  Warren  v.  Mavey  (97  U. 

S.  106),  302,  482. 
County  of  Wilson  v.  Nat.  Bk.  (103 

U.  S.  776),  21,  474. 
Course  v.   Shackleford   (2  Nott  & 

McCord,  283),  336. 
Courtauld  v.  Saunders  (16  L.  T.  (n. 

s.)  562),  123. 
Courtney  v.  Doyle  (10  Allen,  123), 

152,  273. 
Courtney  v.   Hogan  (93   111.  101), 

273. 
Covin  V.  Hill  (4  Denio,323),  77. 
Covington  v.  Threadgill   (88  N.  H. 

186),  179. 
Cowie  V.  Halsall  (4  B.  &Ald.  397), 

394, 
Cowie  V.  Cornell  (75  N.  Y.  91),  173, 

200. 
Cowing  r.  Altmau    (71   N.  Y.  441), 

10,  164,  446. 
Cowles   V.   Harts    (3   Conn.    517), 

347. 
Cowles  V.  McVickar  (3  Wis,  735), 

292. 
Cowperth waiter.  Sheffield  (1  Sandf, 

416),  5a,  5ft,  5c,  311,  452. 
Cox  V.  Boone  (8  W.  Va.  500),  442, 

443. 
Cox  V.   Coleman    (Chitty,   Jr,,   on 

Bills,  294),  223, 
Cox  V.  Devine  (5  Harr,  (Del.)  375), 

87. 
Cox  V.  Earle  (3  B,  &  Aid.  430),  378. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Cox  V.  Nat.  Bank  (100  U.  S.  713), 

30,  209,  211,  227,  310,  313. 
Cox  V.  Smith  (1  Nev.  161),  200,412. 
Cox  V.  Troy  (5  B.  &  Aid.  474),  34, 

221,  250. 
Coxe  V.  State  Bk.  (3  Halst.  172),  31, 

464. 
Coxon  V.  Lyou  (2  Camp.  307),  11. 
Coye  V.  Palmer  (16  Cal.  158),  486. 
Coyle  V.  Smith  (1  E.  D.  Smith,  300), 

445. 
Crabtree  v.  May  (1  B.  Mon.  289), 

51. 
Craft  V.  Fleming  (56  Pa.  St.  140), 

260. 
Craft  V.  Isham  (13  Conn.  28),  420. 
Craftou  Bk.  v.  Cox  (13  Gray,  504), 

358. 
Crafts  V.  Beale  (11  C.  B.  172),  424, 

425. 
Craig  V.  Andrews  (7  Iowa,  17),  179. 
Craig  V.  Browu  (Pet.  C.  C.  171), 

266. 
Craig    V.    City    of  Vicksburg   (31 

Miss.  216),  473. 
Craig  V.  Craig  (3  Barb.  Ch.    76), 

160. 
Craig  V.  Price  (23  Ark.  633),  211, 

315. 
•Craig  V.   Sibbett   (15  Penn.   240), 

154,  280. 
Craig  V.  State  of  Missouri  (4  Pet. 

411),  451,463. 
Craighead  v.  McLoney  (99  Pa.  St. 

211),  392,  394. 
Craighead  v.  Peterson   (72  N.  Y. 

279),  77. 
Crandel  v.  Vickery  (45  Barb.  156), 

293,  299. 
Cram  v.  Hendricks  (7  Wend.  569), 

292,  293. 
Cram  v.  Sherburne  (14  Me.  48),  364. 
Cramer  v.  Eagle  Man.  Co.  (23  Kan. 
400),  321. 


Cramliugton  v.  Evans  (1  Show.  5), 

31,  152,  315,  374. 
Crampton  v.  Tarbriskee  (101  Tj.  S. 

601),  481. 
Crandall    v.    Schroeppel    (1   Hun, 

557),  318. 
Crane  v.  McDonald  (45  Barb.  355), 

379. 
Crauson  v.  Goss  (107  Mass.  439), 

Sib,  34c. 
Crans  v.   Hunter   (28  N.  Y.  889), 

162,  174. 
Craven  v.   Ryder   (6   Taunt.  433), 

493. 
Cravens  v.  Gilliland  (63  Mo.  28),  85. 
Cravens  v.  Logan  (7  Ark.  105),  148. 
Crawford  v.   Branch  Bk.    (7  Ala. 

205),  335,  346,  407,  507,  511. 
Crawford  v.  Millspaugh  (13  Johns. 

87),  424. 
Crawford  v.  Roberts  (50  Cal.  236), 

379. 
Crawford  v.  Robie  (42  N.  H.  162), 

204. 
Crawford  v.   Shaw   (18  Ind.  495), 

156. 
Crawford  County  v.  Wilson  (7  Ark. 

219),  138,  139, 142. 
Crawshay  v.  Collins  (15  Ves.  218), 

108. 
Craythoru  v.  Swineburne  (14  Ves. 
.    169),  426. 
Creamer  v.  Perry  (17  Pick.  382),  362, 

363. 
Cregler  v.   Durham   (9  Ind.  375), 

106. 
Cremer    v.  Higgenson   (1   Mason, 

323),  416. 
Crenshaw    v.    McKiernan  (Minor, 

29.5),  313,  315. 
Creswell  v.Lanahan(101  U.S. 347), 

83. 
Cribbs   v.   Adams    (13  Gray,  597), 
322,  324,  315. 

847 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Cripps  V.  Davis  (12  M.  &  W.  165),  I  Crosby  v.  Tanner  (40  Iowa,  136), 

269.  I       295. 

Cristie  v.  Pearle  (7  M.  &  W.  491),  i  Crosby  v.  Wyatt  (10  N.  II.  322), 

220.  I      424. 

Crocker  v.  Colclwell  (46  N.  Y.  212),  j  Cross  v.  Wood  (30  lud.  378),  424 


104. 
Crocker  v.  Crane  (21  Wend.  211), 

202. 
Crocker  v.  Gitchell  (23  Me.    392), 

273,  346. 
Crockett  v.   Thomason    (5  Snead, 

342),  392. 
Crockett  v.  Trotter  (1  Stew.  &  P. 

446),  379. 
Croft  V.  Buuster  (9  Wis.  503),  249, 

305. 
Crofts  r.  Beale  (11  C.  B.  272),  170. 
Croix  V.  Sibbett  (15  Pa.  St.  238), 

300. 
Cromwell  v.  County  of  Sac.  (96  U. 

S.  60),  293,  295,  412,  473. 
Cromwell  v.  Hewitt  (40  N.  Y.  591), 

2576,  310. 
Cromwell  v.  Hyuson  (2  Camp.  496), 

313,  340,  346,358. 
Cromwell  v.  Tates  Ex'rs  (7  Leigh, 

305),  32. 
Cronise  v.  Kellogg  (20111.  11),  232, 

301. 
Crook    V.    Jadis    (5    Barn    &    Ad. 

(27  E.  C.  L.  R.)  909),  289,  317. 
Crookerv.  Holmes  (65  Me.  195),  25. 
Crooks  V.  Pully  (50  Cal.  673),  270. 
Crook.shank  v.  Rose  (5  C.  &  P.  19), 

179,  377. 
Crop.-^y  V.  Averill  (8  Neb.  157),  154, 

b03. 
Crosby  v.  Grant    (36  N.  H.  273), 

298. 
Crosby  v.  Morton  (13  La.  357),  211. 
Crosby  v.   New  London,   etc.,  K. 

R.  Co.  (26  Conn.  121),  478. 
r     Crosby  v.  Roub  (16  Wis.  622,  626), 

264,  305. 

848 


Cross  V.  State  Bank  (6  Ark.   525), 

35. 
Crosse  v.  Smith  (1  N.  &  Sel.  545), 

336,  337,  340,  344. 
Crossan  v.  May  (68  Ind.  242),  30, 

288. 
Crossman  v.  Fuller  (17  Pick.  171), 

42. 
Crossman  v.  May   (68    Ind.   242), 

157. 
Crosthwait  v.  Ross  (1  Humph.  23), 

97. 
Croton  v.    Delheim  (6    Greenleaf, 

476),  355. 
Croughton  v.  Duval   (3  Call,    73), 

424. 
Crout  V.  DeWolf  (1  R.  L  393),  288, 

398. 
Crow  V.  Eichinger  (34  Ind.  65),  205. 
Crowell  V.    Osborne    (14   Vroom, 

335),  156. 
Crowell  V.  Plant  (53  Mo.  145),  227. 
Crowell  V.  Van  Bibber  (18  La.  Ann. 

637),  220,  226. 
Crowley  u.  Barry  (4  Gill,  194),  313. 
Cruette  v.  Jenkins  (53  Ind.   217), 

251. 
Crugeru.  Armstrong  (3  Johns.  5), 

355,  442,  443. 
Crum  V.  Boyd  (9  Ind.  289),  87. 
Crum  V.  Corby    (11  Kan.  464),  305. 
Cryst  V.   Cryst     (1    Smith    (Ind.) 

370),  148. 
Cullura  V.  Branch  Bank  (4  Ala.  21), 

168. 
Culver  r.  Banning  (19  Minn.  303), 

151. 
Culver  V.  Leavy  (19  La.  Ann.  202), 

261,  2C2. 


1 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Culver u.  Reuo  Real  Estate  Co.  (91 

Pa.  St.  367),  116. 
Cumber  v.  Wane  (1  Stra.  426),  379. 
Cumberlaud  Bk.  v.  Hall  (1  Halst. 

215),  393,  394. 
Curamings  v.   Cassity   (5  B.    Mon. 

74),  35. 
Cummiugs  v.  Freeman  (2  Humph. 

145),  23. 
Cummings  v.  Henry  (10  Ind.  109), 

57. 
Cummings  ».  Thompson  (18 Minn. 

252),  154,  303. 
Cumpston    v.     McNair    (1  Wend. 

457)  416. 
CundifE  v.  Herron  (33  Texas,  622), 

185. 
Cundy  v.  Marriott  (1  B.  &  A.  696), 

256,  259,  357. 
Cunningham  v.  Smithson  (12  Leigh, 

43),  104. 
Cunningham  -y.  Wardwell  (13  Fair- 
fax, 466),  20,  218. 
CuiTan  V.  Arkansas  (15  How,  304), 

463. 
Currie  v.  Donald   (2  Wash.  (Va.) 

59),34d. 
Currie  v.    Miser   (L.   R.  10  Exch. 

53),  151,  165,  170,  456, 
Currie  v.  White  (45  N.  Y.  822),  189. 
Currier  v.  Howard  (14  Gray,  511), 

241. 
Currier    v.  Lockwood   (40    Conn. 

348),  23. 
Curry  v.  Bk.   of  Mobile  (8  Port. 

(Ala.)  360),  266,  337. 
Curry  ».  Reynolds  (44  Ala.    349), 

219. 
Curry  v.  White    (51  Cal.  530),  107. 
Curtis  V.   Leavitt   (15  N.   Y.  66), 

115,  134, 
Curtis  V.  Martin  (20  HI.  557),  363, 
Curtis  V.  Mohr  (18  Wis,  645),  163, 

304, 


54 


Curtis  V.  National  Bank  (39  Ohio 

St.  579),  146, 
Curtis    V.    Sraallman     (14    Wend. 

231),  416. 
Curtis  V.  Sprague  (51  Cal.  239),  243. 
Curtis    V.    State    Bk.    (6  Blackf. 

312),  342. 
Curttou    V.    Moore   (2  Jones    Eq. 

204),  60. 
Cushiug  V.  Field    (70  Me.  50),  25. 
Cushing  V.  Gore  (15  Mass.  69),  440. 

444. 
Cushman  v.  Dement  (4  Scam.  497), 

270. 
Cushman  v.  Thayer  Man.    Co.  (76 

N.  Y.  371),  497. 
Cuthbert  v.  Bowie    (10  Ala.  163), 

42. 
Cuthbert  v.   Haley  (8  T.  R.  390), 

178,  199. 
Cutler  V.  Welsh   (43  N.    H.   497), 

198. 
Cutter  V.   Collins   (12  Cush.  223), 

174,  183. 
Cutts  V.  Perkins   (12  Mass.   206), 

5,  220,  447,  448. 
Cuttle  V.  Cleaves  (70  Me.  256),  803. 
Cuyler  v.  Memfleld  (13  N.  Y.  S.  C. 

(5  Hun.)  559),  77. 
Cuyler  v.  Nellis  (4  Wend.  398),  342. 
Cuyler  v.  Sanford  (13  Barb.  339), 

196. 
Cuyler  v.  Stevens   (4  Wend.  566), 

337,  344. 

D. 

Dabney    v.    Campbell    (9  Humph. 

680),  316. 
Dabney  v.  Stager  (4  Sraed.  &.  M. 

749),  336. 
Da  Costa  v.  Cole  (Holt,  465),  375. 
Da   Costa   v.   Jones    (Cowp.  734), 

188. 

849 


TABLE    OF   CASES    CITED. 


References  are  to  Sections. 


Pagfrett    V.    Whittiug    (35    Conn. 

372),  301. 
Dakiu  V.  Graves  (48  N.  H.  45),  326. 
Dale  V.  Gear  (38  Conn.  15),  273. 
Dale  V.   Moftlt   (22  Ind.  114),  270, 

271. 
Dalrymple  v.  Hillenbrand  (9  N.  Y. 

S.  C.  (2  Hun)  488),  259. 
DaliTmple  v  .Whittingham  (26  Vt. 

345),  139,   140. 
Damerou  v.  Irwin  (8  Ired.  L.  421), 

136. 
Dana  v.  Kemble  (19 Pick.  112),  340. 
Dana  v.   San  Francisco    (19    Cal. 

486),  135,  140,  142. 
Danav.  Sawyer  (22  Me.  244),  214, 

317. 
Danber  v.  Blackney  (38  Barb.  432), 

244. 
Dane  v.  Kirkall   (8   C.   &  P.  679), 

53. 
Daniel  v.  Daniel  (Dudley,  239),  393. 
Daniel  v.  Kyle  (5  Ga.  245),  442. 
Daniels  v.   Rawlings    (6    Humph. 

403),  251. 
Daniels  v.  Wilson  (24   Minn.  630), 

293. 
Danley  v.  Hays  (17  Serg.  &  R.  400), 

305. 
Darbe  v.  Boucher  (1  Salk.  279),  46. 
Darbishire  v.  Parker  (6  East,  3), 

337,  341. 
Darby  v.  Cabanne  (1  Mo.  App.  126), 

54. 
Darlard  v.  Taylor  (52  Iowa,  503), 

252. 
Darling    v.   March    (22    Me.  184), 

363. 
Darling  v.  Osborne    (51  Vt.  130), 

295. 
Darling    v.  Wooster    (9   Ohio  St. 

519),  296. 
Darnell  t?.  Williams  (2  Stark.  166), 

201,  230. 

850 


Darrach  v.  Savage  (1  Show.  155), 

210,  334. 
Darriugton  v.   Alabama   (13  How. 

IC),  4G3. 
Dart  r.  Sherwood  (7  Wis.  523),  18. 
Dartmouth   College  v.   Woodward 

(4  Wheat.  636),  114,  480. 
Dartmouth    v.   Bennett  (15    Barb. 

541),  182. 
Darwin  v.   Rippey  (63  N.  C.  318), 

394. 
Daugherty    v.    Moon    (59    Texas, 

397),  80. 
Davega  v.  Moore  (3  McCord,  482), 

21. 
Davenport  v.  City  Bank  (9  Paige, 

12),  464. 
Davenport    v.    Riley    (2    McCord, 

198),  87. 
Davenport*.  Schram  (9  Wis.  119), 

260. 
Davenport    v.   Sleight  (2    Dev.    & 

Bat.  L.  381),  35. 
Davenport  v.  Woodbridge  (8  Me. 

17),  247. 
Davenport    Nat.    Bk.  v.    Homeyer 

(45  Mo.  145),  491. 
Davenport  Sav.  Fund  Ass.  v.  N.  A. 

Fire  Ins.  Co.  (16  Iowa,  74),  83. 
Davidson  v.  Cooper  (11  M.  &  W. 

778).,  392. 
Davidson  v.  Lanier  (4  Wall.  457), 

35,  283. 
Davidson  v.  Ramsey  Co.  (18  Minn. 

482),  481. 
Davidson  v.  Stanley   (2  Man.  &  G. 

121),  78,  (2  Man.  &  G.  721)  85. 
Davidson  v.  Wood  (1  D.  G.  J.  &  S. 

465),  54. 
Daviess  Co.  Court  v.  Howard  (13 

Bush,  102),  135. 
Daviesv.  Smith  (4  Esp.  36),  60. 
Davies  v.  Stainback  (6  D.  G.  M.  & 

G.  679),  422. 


i 


TABLE    OF    CASES    CITED. 


Davies  v.  Watson 

709),  400. 
Davis'  Estate  (5  Whart.  537),  379. 
Davis  V.  Allen  (3  Corast.  168),  23, 
(3N.  Y.  172),94,  (3 N.  Y.  1(58),  94, 
lOG. 
Davis  V.  Anable  (2  Hill,  339),  379. 
Davis  V.  Bank  of  Tenn.  (4  Sneed, 

290),  342. 
Davis  V.  Barger  (57  Ind.  55),  34c. 
Davis  V.  Bartlett  (12  Ohio  St.  537), 

154,  303. 
Davis  V.  Bradley  (26  La.  Ann.  555), 

295. 
Davis  V.  Brown  (94  U.  S.-423),  273. 
Davis  V.  Caldwell  (12  Cush.  512), 

46. 
Davis  V.  Carlisle  (5  Ala.  707),  392. 
Davis  V.   Clarke,  (6  Q.  B.  16),  15, 

219,  228. 
Davis  V.  Clemson  (6  McLean,  622), 

506. 
Davis  V.  Coburn  (8  Mass.  299),  241. 
Davis    V.  Coleman  (7  Ired.    424), 

394,  506,  511. 
Davis  V.  Cook  (14  Nev.  265),  98. 
Davis  V.  Desauque  (5  Wheat.  530), 

107. 
Davis  V.  Francisco  (11   Mo.  572), 

313. 
Davis  V.  French  (20  Me,  21),  146. 
Davis  w.  Garr  (2  Seld.124),  17. 
Davis  V.   Graham   (29  Iowa,  514), 

424, 
Davis  V.  Guveu   (19  Me.  449),  274, 

339. 
Davisv.  Hanly(7Eng.  (Ark.)  645), 

387. 
Davis  V.  Holding  (1  M.  &  W.  159), 

193. 
Davis  V.   Humphreys  (6  M.   &  W. 

153),  426. 
Davis  V.  Hurndron  (39  Miss.  484), 
241. 


References  are  to  Sections. 

(2    Nev.  &  M.  I  Davis  v.  Jenny  (1  Met.  221),  393. 


Davis  V.  Jones  (17  C.  B.  (84  E.  C. 
L.  K.)  625;  s.  c.  25  L.  J.  C.  P. 
91),  10. 
Davis  V.  Keyes  (38  N.  Y.  94),  106. 
Davis  V.  Lane  (10  N.  H.  156),  80. 
Davis  V.  Mason  (5  T.  R.  118),  190. 
Davis  V.  McCready  (17  N.  Y.  230), 

300. 
Davis  V.   Miller  (14  Gratt.  18),  6, 

269,  295,  373. 
Davis  V.   Morgan  (64  N.   C.  576), 

261,273. 
Davis  V.  Neligh  (7  Neb.  78),  295, 
Davis  V.  Powlett  (3  Wis.  300),  251. 
Davis  v.  Peck  (54   Barb.  425),  263. 
Davis  V.  Philips  (7  Mon.  632),  375. 
Davis     V.     Proprietors      Meeting 

House  (8  Met.  321),  115. 
Davis  V.    Ramsey    Co.    (18   Minn. 

482),  481. 
Davis  V.  Smith  (27  Minn.  390),  98. 
Davis  V.  Staats  (43  Ind.  103),  423. 
Davis  V.  Wells,  Fargo   &  Co.  (104 

U.  S.  159),  420. 
Davis  V.  West  Saratoga  B.  Union 

(32  Md.  285),  115. 
Davis  V.  Windsor  Sav.  Bank   (46 

Vt.  728),  80. 
Davison  v.  City  Bank  (57  N.  Y.  82), 

456. 
Davison  v.   Franklin   (1   B.  &  Ad. 

142),  178,  180. 
Davison  V.  Robertson  (3  Dow.  218), 

4. 
Dawley  v.  Wheeler   (72  Vt.  574), 

310. 
Dawson    v.    Goodyear    (43  Conn. 

548),  301. 
Dawson  v.  Keartou  (3  Sm.  &  GifiE. 

186),  159. 
Dawson  v.  Morgan  (9  B.  &  C.  618), 

408. 
Day  V.  Cutler  (22  Conn,  625),  173. 

851 


TABLE    OF    CASES    CITED, 


References  are  to  Sections. 


Day  V.  Mix  (9  Moore,  150),  201. 
Day   V.  Schofield    (20  Johns.  102), 

410. 
Day  V.   Stuart  (G   Bing.   109),  178, 

189. 
Day  V.  Zimracrmau  (tiS  Pa.  St.  72), 

251,  302. 
Dayton  v.  Dale  (2  B.  &  C.  293),  65. 
Daytou  v.  Trull   (23   Wend.  345), 

305,  380, 381. 
Deacon  v.    Stodhart  (2  Man.  &  G. 

17),  372. 
Dean   v.  Carruth  (108  Mass.  242), 

152,  159,  252. 
Dean  v.  Emerson  (102  Mass.  480), 

190. 
Dean  v.   Hichmoud  (5  Pick.  461), 

61,  63. 
Dean  v.  Speakmau  (7  Blackf.  317), 

366. 
Deardorff    v.    Foresraan    (28  Ind. 

481),  286. 
Deberryv.  Darnell  (5  Yerg.451),29. 
Debers  v.  Harriott  (1  Shower,  163), 

20. 
De   Bignis  v.  Armistead  (lOBing, 

107),  198. 
Deblieux  v.   Bullard   (1    Rob.  66), 

337. 
Decell  V.  Lewenthal  (57  Miss.  331), 

46. 
Deck  V.  Works  (57  N.  Y.  Pr.  292), 

415,  419. 
Decker,  Ex  parte  (0  Covr.  60),  35. 
Deener  v.  Brown  (1  McArth.  353), 

432,  433. 
Deering  v.  Chapman  (22  Me.  488), 

179. 
DeForest  v.  Frary    (6   Cow.  151), 

25,  152. 
De  Forest  v.  Strong  (8  Conn.  513), 

196. 
DeFreest  v.  Bloomingdale  (5  De- 

nio,  304),  153. 
852 


De  Groot  v.  Van  Duzer  (20  Wend. 

390),  198. 
Dehers  v.  Harriott  (1   Show.  163), 

4,  269. 
De  La  Chaumette  v.  Bank  of  En- 
gland (9  B.  &  C.  208),  168,  464. 
De  la  Courtier  v.  Bellamy  (2  Show. 

422),  10. 
De  la  Torre  v.  Barclay  (1  Stark,  pt. 

2,  7),  321. 
De  la  Vega  v.  Vianna  (1  B.  &  Aid. 

284),  506. 
Delaware  Bk.  v.  Jervis   (20  N.  Y. 

228),  244,380. 
Delaware,'etc.,R.  R.  Co.  v.  Oxford 

Iron  Co.,  11  Stew.  161),  34,  426. 
Delegal  v.  Naylor  (7  Bing.  460) ,  51 1 . 
De  Lein  v.  Trevins  (49  Texas,  88), 

198. 
Delins  V.  Cawthorne  (2  Dev.  90),  84. 
De  Mantort  v.  Saunders  (1  Bam.  & 

Ad.  398),  94. 
De  Mets  v.  Dayson  (53  N.  Y.  635), 

375. 
Denegre  v.  Hiriat  (6  La.  Ann.  100), 

346. 
Denegre  v.  Milne  (10  La  Ann.  324), 

218. 
Dennett  u.  Dennett  (44  N.  H.  531), 

52. 
Denuie  v.  Walker   (7  N.   H.    199), 

358,  359. 
Dennis  v.  Table    Mountain  Water 

Co.  (lOCal.  369),  128,  218. 
Dennis  v.  Williams  (40  Ala.  633), 

379. 
Dennison  v.  Austin  (15  Wis.  366), 

124. 
Denniston  v.  Bacon  (10  Johns.  1 98) , 

273,  301. 
Dennistoun  v.  Imbrie  (Wash.    C. 

C.  399),  80. 
Denniston    v.   Stewart     (17   How. 

606),  325,  345,  346. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Denny  v.  Palmer  (5  Ired.  GIO),  SC^2. 
Deuston  v.  Henderson  (13  Johns. 

322),  378. 
Dent  V.  Cock  (65  Ga.  400),  46. 
Dent  V.  Dunn  (3  Camp.  296),  310. 
Deuton  v.   Peters    (5  Q.  B.  L.  R. 

475),  272. 
De  Peau  v.  Humphreys  (20  Mart. 

La.  1),  511. 
Depeau    v.   Wadington    (6   Whart. 

219),  158. 
Depew  V.  Wheelan  (6  Blackf.  485), 

366. 
Depuy  V.   Schuyler   (45   HI.    506), 

269. 
Depuy  V.  Swart  (3  Wend.  136),  162. 
Derry   v.   Duchess  of  Mazarine  (1 

Ld.  Raym.  147),  61. 
Deverell  v.  Bolton  (18  Ves.  505), 

75. 
Devries  v.  Schumate  (53  Md.  216), 

34. 
Des  Arts  v.  Leggett  (16  N.  Y.  582), 

35,  366. 
Desbrowe  v.   Weatherby    (1   M.  & 

Rob.  438),  394. 
Desha  v.  Stewart  (6  Ala.  852),  209, 

262. 
Deturber  v.  Bish  (44  lud.  70),  284. 
Develing  v.  Ferris  (18  Ohio,  170), 

362. 
Devendorf  v.  WestVa.  (17  W.  Va. 

172),  123,  363. 
Devin  v.  Himer  (29  Iowa,  301),  35. 
Devlin  v.  Clark  (31  Mo.  22),  303. 
De  Voss  V.  City  of  Richmond  (18 

Gratt.  338),  134,  480. 
Dewey  v.  Cochran  (4  Jones,  184), 

423. 
Dewey  v.  Reed  (40  Barb.  21),  41, 

394. 
Dewey -y.  Sears  (11  Wall.  379),  375. 
De  Witt  V.  Perkins  (22  Wis.  473), 

291,  293. 


Dewitt  V.  Walton  (5  Seld.  (N.  Y.) 

571),  87. 
De  Wolf  V.  Johnson    (10    Wheat. 

367),  162,  510,511. 
De  Wolf  ?j.  Murray  (2  Sand.  166), 

314,  346. 
D'Wolf  V.  Raband  (1  Pet.  476),  157, 

222. 
Dexlaux  V.  Hood  (Buller  N.  P.  274), 

315. 
De  Zeng  v.  Fyfe  (1  Bosw.  336),  301. 
Diamond  v.  Harris  (33  Texas,  634), 

205,  295. 
Dibble  v.  Dl^ncan  (2  McLean,  353), 

273. 
Dick  V.  Leverick  (11  La.  573),  230. 
Dick  V.  Mawry  (17  Mass.  448),  305. 
Dicken  v.  Hall  (87  Pa.  St.  379),  338, 

342. 
Dickens  v.  Beal  (10  Peat.  582),  326, 

327,  347,348,  355. 
Dickens  v.  Morgan  (54  Iowa,  684), 

204. 
Dickermanu.  Miner  (43  Iowa,  508), 

394. 
Dickerson  v.  Burke  (25  Ga.  225), 

13. 
Dickerson    v.   Derricksou  (39   III. 

577),  415,  416,  421. 
Dickinson  v.  Dickinson  (25  Gratt. 

321),  lOG. 
Dickinson  v.   Hall  (14  Pick.  217), 

203. 
Dickinson    v.    Hoomes    (8    Gratt. 

408),  506. 
Dickinson  v.  King  (28  Vt.  378),  379. 
Dickinson  v.  Lewis  (34  Ala.  638), 

174. 
Dickinson  v.   Valpy    (10   B.   &  C. 

128),  96. 
Didlake   i;.    Robb  (1  Woods  C.  C. 

680),  170. 
Dierecks  v.  Roberts  (13  S.  C.  338), 

283. 

853 


TABLE    OF    CASES    CITED. 


7(;7),28. 
Dietrich  v.   Mitchell   (43   111.   46), 

270. 
Dilk  V.  Keighley  (2  Esp.  480),  40. 
Dictz  V.  Harder  (72  lud.  208),  394. 
Dill  V.  White  (52  Wis.  169),  13. 
Dillard  v.  Evans  (4  Ark.  185),  29, 

375. 
Dillon  V.  Bowles  (77  Mo.  603),  46. 
Dillon  V.  Dudley  (1  A.  K.  Marsh. 

66),  310. 
Dillon  V.   Rimmer    (1  Biug.   100), 

381. 
Dilton  V.  Russell  (5  Neb.  484),  175, 

424. 
Dingwall  v.  Dunster  (1  Doug.  248) 

232. 
Disher  v.  Disher  (1  P.  Wms.  204), 

34. 
Ditchbournv.  Goldsmith  (4Campb. 

452),  188. 
Dively  v.   Cedar  Falls    (21    Iowa, 

565),  139,  480. 
Diversy  v.  Kellogg  (44  111.  114),  80. 
Dixon  V.  Bovill  (3  Macq.  H.  L.  1), 

29. 
Dixon  V.  Dixon  (31  Vt.  450),  165. 
Dixon    V.   Elliott   (5    Carr.    &    7), 

365. 
Dixon  V.  Nuttall  (1  C.  M.  &  R.  307), 

211,310,  315. 
Dixon  V.  Ramsey  (1  Cranch  C.  C. 

472),  146. 
Dob  V.  Halsey  (16  Johns.  34),  98. 
Dobbins  v.  Parker  (46  Iowa,  358), 

42,  305. 
Dobree  v.  Eastwood  (3  C.  &  P.  250), 

339, 341. 
Dobson  V.  Esprie  (26  L.  J.  (n.  s.) 

240),  232. 
Dockray    v.  Dunn    (37    Me.    442), 

l-2a. 
Dod  V.  Gill  (3  F.  &  F.  261),  310. 
854 


References  are  to  Sections. 

Dietrich    v.   Baylie    (23  La.    Ann.  [  Dodd  v.   Denny    (6   Oregon,  156), 

296. 
Dodd  V.  Bishop  (30  La.  Ann.  1178), 

84,  107. 
Dodge  V.  Bank  (1  McArthur,  420), 

249. 
Dodge   V.    Bank   of    Ky.    (2  A.  K. 

Marsh.  510),  336. 
Dodge  V.  Emerson  (131  Mass.  467) 

379. 
Dodge   V.   Haskill    (69    Me.    429), 

393. 
Dodge  V.  Nat.  Exchange  Bank  (30 

Ohio   St    1),  247,   312,   430,  431, 

449. 
Doebler   v.    Waters    (30   G.  344), 

15L 
Doeblingv.  Loos  (40  Mo.  150),  379. 
Dogan  V.  Dubois  (2  Rich.  Eq.  85) 

158,  250,  300. 
Doherty  v.  Perry  (38  Ind.  15),  300. 
Dohmey  v.  Dohmey  (7  Bush,  217), 

Sic. 
Dollfus   V.  Frosch  (1  Denio,  368), 

77,  312,  315,  355. 
Dolman  v.  Orchard  (2  C.  &P.  104), 

105,  107,  219. 
Don  V.  Lippman  (5  Clarke  &  F.  1), 

507. 
Douegan  v.  Wood  (49  Ala.  242),  3, 

324,  325,  326,  315,  3. 
Douelly  v.  Howe  (Hays  &  J.  436), 

365. 
Donelson  v.  Posey  (13  Ala.  752) ,  57. 
Donelson  v.   Taylor  (8  Pick.  390), 

366. 
Donley  v.  Tindall  (32  Texas,  43), 

29c. 
Donner  v.  Remer  (21   Wend.  10), 

340. 
Donohue  v.  Gamble  (38  Cal.  354), 

304.. 
Donovan   v.  Pitcher  (53   Ala.  411"). 

506. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Dooley   v.   Smith    (13  Wall.  605), 

375. 
Doolittle  V.  Lyman  (44  N.  H.  608), 

178,  198. 
Doolittle  V.    Ferry  (20  Kau.  230), 

273. 
Dorchester,  etc.,  Bk.  v.  Milton  Bk. 

(1  Gush.  177),  315,  318. 
Dorchester,   etc.,  Bk.  v.  New  En- 
gland Bank  (1  Gush.  177),  89. 
Doremus  v.  Bond  (8  Blackf.  368), 

202. 
Dorn  V.  Parsons  (56  Mo.  601),  303. 
Dorsey  v.  Abrams  (85  Pa.  St.  299), 

439. 
Doty  V.  Bates  (11  Johns.  544),  98. 
Doty  V.  James  (11  Johns.  544),  103. 
Doty  V.  Knox  Go.   Bank   (16  Ohio 

St.  133),  180. 
Doty  V.   Mitchell    (9    Smed.    &  M. 

447),  62. 
Doty  V.  Smith  (11  Johns.  543),  13. 
Doubleday  v.  Kress  (50  N.  Y.  410), 

77,312,374. 
Dougal   V.   Cowles    (5  Day,    511), 

105,  218,  379,  380. 
Dougherty    v.   Savage    (28    Gonn. 

146)^  204. 
Douglass  V.  Frazier  (2  McGord  Gh. 

105),  146. 
Douglass  V.    Rowland   (24   Wend. 

50),  420. 
Douglass    V.    Matting    (29    Iowa, 

498),  285. 
Douglass  V.  Reynolds  (7  Pet.  113), 

416,  421. 
Douglass  V.   Wilkerson  (6  Wend. 

637),  17,21. 
Douglass  V.  Virginia  Gity  (6  Nev. 

147),  133, 134. 
Doversy   v.  Kellogg   (44  111.  114), 

106. 
Dow  V.  Moore  (47  N.  H.  419),  123. 
Dow  V.  Rowell  (12  N.  H.  49),  508. 


Dow  V.  Sperry  (29  Mo.  390),  288, 

398. 
Dow  V.  Tuttle  (4  Mass.  414),  42. 
Dow  V.  Updike  (11  Neb.  95),  28. 
Dowdy  V.  McLellan  (52  Ga.  408), 

205. 
Dowling  V.  Blackman  (70  Ala.  303), 

205. 
Down  V.  Hailing  (4  Barn.  &  G.  333), 

443,  446. 
Downer -y.  Gheesebrough  (36  Conn. 

39),  273,  506. 
Downer  v.  Remer  (23  Wend.  670), 

345. 
Downes  v.  Church  (13  Pet.  205),  4, 

217. 
Downes  v.  Richardson  (5  Barn.  & 

Aid.  674),  158. 
Downey  v.  Hicks   (14  How.  240),, 

379. 
Downs  V.  Perrin  (16  N.  Y.  32.5),  492. 
Dows  V.  Green  (24  N.  Y.  644),  46, 

493. 
Dows  V.  Nat,  Exch.  Bank  (91  U.  S. 

631),  494. 
Dows  V.  Perrin  (16  N.  Y.  333),  493. 
Drage  v.  Ibberson  (2  Esp.  643),  183. 
Drake  v.  Chandler  (18  Gratt.  909), 

196,  199. 
Drake  v.  Elwyn  (1  Gaine,  184),  103. 
Drake  v.  Flewelleu  (33  Ala.  106), 

123. 
Drake  v.  Markle  (21  Ind.  433),  29, 

271,  486. 
Drake  v.  Rogers  (32  Mo.  524),  10, 

34c. 
Draper  v.  demons  (4  Mo.  52),  313, 

318. 
Draper  v.  Jackson  (16  Mass.  480), 

63,  64.  • 
Draper  v.  Mass.  Steam  Co.  (5  Allen, 

338),  84,  123. 
Draper  v.  Snow  (20  N.  Y.  331),  417, 

418. 

855 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Draper  v.   Springport    (104   U.  S. 

501),  475,  479. 
Draper  v.  Weld  (13  Gray,  580),  270. 
Draper  v.  AVood  (112  Mass.  315). 

394. 
Drayton  v.  Dale  (2  B.  &  C.  298),  49, 

63,  230. 
Dresser  v.  Missouri,  etc.,  R.  R.  Co. 

(93  U.  S;  95),  293,299. 
Drew  r.  Munn  (4  Q.  B.  D.  661),  80. 
Drew  V.  Towle  (27  N.  H.  455),  201. 
Driggs  V.  Rockwell  (11  VVeud.  504), 

295. 
Drinkwateru.Tebbetts  (17  Me.  16), 

218,  363. 
Driscoll  V.  West  Bradley  audC.  M. 

Co.  (59  N.  Y.  96),  497. 
Drumt'.  Bradfute  (18  La.  Anu.  681), 

327. 
Drummond  v.  Hopper  (4  Harr.  327), 

57. 
Duauesburg  v.   Jenkins  (40  Barb. 

.')79),  481,  482. 
Dubois  V.   Baker   (40  Barb.  555), 

204. 
Dubois  V.  Del.,  etc.,  Canal  Co.  (4 

Wend.  285),  85,  123. 
Dubois  V.  Mason   (127  Mass.  37), 

270. 
Du  Bose  V.  Weddou  (4  McCord, 

221),  48. 
Dubreys  v.    Farmer   (22  La.  Anu. 

478),  315. 
Dubs  V.  Dubs  (31  Pa.  St.  149),  62. 
Dubuque   Co.  v.   R.  R.  Co.    (4  G. 

Green,  1),  481. 
Ducarse  v.   Keyser   (28    La.   Ann. 

419),  247. 
Ducket  V.  Van  Lilienthal  (11  Wis. 

56),  326,  327. 
Dudgeon  v.  Haggart  (17  Mich.  273), 

380. 
Dudley  v.  Calwell  (19  Conn.  218), 

305. 

856 


Duersou's    Admr.    v.    Alsop     (27 

Gratt.  248).  154,    178,    303,   316, 

507. 
Duff  V.  East  India  Co.  (15  Ves.  jr. 

198),  447. 
Dunield   V.  Elwes    (1  Bligh  N.  R. 

409),  252. 
Duffy  r.   O'Connor  (7  Baxt.  498), 

265,  336,  363. 
Duffy,  In  re  (5  L.  R.  Ireland,  927), 

11. 
Dufour  V.  Morse   (9  La.  333),  362. 
Dufour  V.  Oxendqn  (1  Moody  &  M. 

90),  223. 
Dugan  V.  U.  S.  (3  Wheat.  172),  137, 

262,  312,  373,  374. 
Duggan  V.  King  (Rice,  239),  369. 
Duke  V.  Cahaba  Co.  (10  Ala.  82), 

497. 
Duke  V.  Clark  (58  Miss.  466),  295. 
Dulaney  v.  Greene  (4  Harr.  285), 

57. 
Dumont  v.  Pope    (7  Blackf.    367), 

211,  216,  327. 
Dumont   v.    Williamson    (10  Ohio 

St.  515),  260. 
Dunbar  v.  Marden  (13  N.  H.311), 

33. 
Dunbar  v.  Tyler  (4  Miss.  10),  354, 

355. 
Duncan  v.   Berlin  (60  N,  Y.  151), 

452. 
Duncan  v.  Course  (3  Const.  R.  (S. 

C.)  100),  3. 
Duncan  v.  Gilbert  (29  N.  J.  L.  521), 

301,  304. 
Duncan    v.    Hodjes    (4    McCord, 

239),  35. 
Duncan  v.  Joudan  (15  Wall.  155), 

447 
Duncan  v.    Louisville    (13    Bush, 

385),  26,  305. 
Duncan  v.   McCullough  (4  Serg.  & 

R.  480),  310,  358. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Duncan  v.  Nells  (32  111.  542),  84, 

136. 
Duncan  v.  Pope  (47  Ga.  445),  34d. 
Duncan  v.   Scott   (1  Camp.   100), 
'  287. 
Dundasw.  Bowler  (3  McLean,  400), 

508. 
Dunklin  v.  Wilkins    (5  Ala.   199), 

241. 
Dunlap  V.  Hale   (2  Jones  (N.  C.) 

381),  60. 
Dunlap  V.  Newman  (47  Ala.  429), 

148. 
Dunlap  V.  Smith  (12  111.  399),  464. 
Dunlap  V.  Thompson  (5  Yerg.  67), 

342. 
Dunn  V.  Adams  (1  Ala.  527),  6,  506. 
Dunn  V.   O'Keefe  (5  M.  &  S.  282), 

211. 
Dunn  V.  Snell  (1  Mass.  485),  249. 
Dunnu.  Weston  (71  Me.  270),  164, 

295,  301. 
Dunne  v.  Deery  (40  Iowa,  251),  146. 
Dunovan  v.  Flynn  (118  Mass.  537), 

222. 
Dupeau  v.  Waddington  (6  Whart. 

220),  166. 
Duran  v.  Ayer  (67  Me.  145),  412. 
Durant  v.    Banta  (3  Dutch,  630), 

292,  293. 
Durante.  Iowa  Co.  (1  Woolw.  69), 

302,  473. 
Durden  v.  Smith   (44  Miss.   548), 

354. 
Durgin  v.  Bartol  (64  Me.  473),  21, 

247. 
Durham  v.  Donner   (31  Vt.   249), 

422. 
Durham    v.    Price    (5  Yerg.  300), 

362. 
Durkin  v.  Cranston  (7  Johns.  442), 

4. 
Dusenbury  v.  Ellis  (3  Johns.  Cas. 

71),  84. 


Dutcher  v.   Porter  (63  Barb.  20), 

153. 
Dutchess  Co.  Bank  v.   Ibbottsou 

(oDev.  110),  327. 
Dutchess  Co.  v.  Davis  (14  Johns. 

238),  24. 
Dutton  V.  Ives  (2  Mich.   515),  305. 
Duttou  V.   Marsh   (L.  R.  6   Q.   B. 

363),  124. 
Duvall  V.  Craig  (2  Wheat.  56),  123. 
Duvall  V.  Farmers  Bank    (9  Gill  & 

J.  31),  362. 
Dwight  V.  Emerson  (2  N.  H.  159), 

310,  336. 
Dwight  V.  Newell  (15111.  333),  148, 

262. 
Dwight  V.   Scovil    (2  Conn.  654), 

356. 
Dye  V.  Scott  (35  Ohio  St.  194),  274, 

363. 
Dyer,  Ex  parte  (6  Ves.  9),  225. 
Dyer  v.  Covington  Township    (19 

Pa.  St.  200),  138,  139. 
Dyer  v.  Gilson  (16  Wis.  557),  418. 
Dyett  V.  North  Am.  Coal  Co.    (20 

Wend.  570),  62. 
Dykers  v.  Leather  Bank  (11  Paige, 

612),  209,  440,  441,  450. 
Dykers  v.  Townsend  (25  N.  Y.  57), 

87. 

E. 

Eadie  v.  Ashbaugh  (44  Iowa,  521), 

83. 
Eagle  Bank  v.  Chapin  (3  Pick.  180), 

337,  348. 
Eagle  Bank  v.  Hathaway  (5  Mete. 

212),  339,  343. 
Eagle  Bank  v.  Smith  (5  Conn.  71), 

244,  466. 
Eagle    Manf.   Co.  v.  Jennings  (29 

Kan.  657),  151. 
Earhart  v.  Gant  (32  Iowa,  481),  294. 
857 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Earl  V.  Peck  (64  N.  Y.  598),  200. 
Earle  v.  Peale  (1  Salk.  380),  46. 
Earle  v.  Reed  (10  Met.  387),  46,  48. 
Earle  v.  Foster  (7  Blackf.  35),  271. 
Early  v.  Preston  (1  Pat.  &  Heath, 

228),  348. 
Early  r.  Wilkinson  &  Hunt  (9  Gratt 

68),  85. 
Earnest  v.  Taylor  (25  Texas,   37), 

359. 
Easeley  v.  Crockford  (10  Bing.  (25 

E.  C.  L.  R.  116)  243),  289. 
Easterly  t?.  Barber  (66  N.  Y.  433), 

261. 
Eastern  Bank  v.   Brown    (17  Me. 

356),  342. 
Eastern    Railway   v.    Benedick  (5 

Gray,  561),  88. 
East  India  Co.  v.  Tritton   (3  B.  & 

C.  280),  259. 
East  River  Bank  v.   Butterworth 

(45  Barb.  476),  379. 
East  Union  Tp.  v.  Ryan  (86  Pa.  St. 

459),  138,  140. 
Eastman  v.  Brown  (32  111.  53),  173. 
Eastman  v.  Commonwealth  (4  Gray, 

416),  463. 
Eastman  v.  Foster  (8  Met.  19),  305. 
Eastman  v.  Plumer  (32  N.  H.  238), 

371,  376. 
Eastman  «.  Shaw   (65  N.   Y.  522), 

280, 292. 
Eastman  v.  Turman  (24  Cal.  383), 

346. 
Easton  v.  Easton  (112  Mass.  438), 

173. 
Easton  v.  Isabell  (47  Ala.  456),  314. 
Easton  v.  Prachett  (1  Cromp.  M.  & 

G.  798),  154. 
Eastwood  V.  Bain  (3  H.  &  N.  738), 

84,  228. 
Eastwood  V.  Kenyon  (11  Ad.  &  El. 

438),  59,  162. 
Eaton  V.  Bell    (5  B.  &  Ad.  34),  145. 
858 


Eaton  V.  Burucs  (31  Ind.  390),  174. 
Eaton  V.  Boessonault  (67  Me.  540), 

412. 
Eaton  z>.  Carey  (10  Pick.  211),  172a. 
Eaton  V.  Lennox  (6  Rand.  31),  6. 
Eaton  V.  McMahon  (42  Wis.  487), 

273. 
Eccles  17.  Ballard  (2  McCord,  388), 

257a. 
Eckartu.  Reidel  (16  Texas,  62),  85. 
Eddy  V.  Bond  (19  Me.  461),  21,  394. 
Edelen  v.  White  (6  Bush,  408),  261. 
Edgeware  Highway  Board  v.  Har- 
row Dist.  Gas  Co.  (L.  R.  10  Q. 

B.  92),  151. 
Edgecomb  v.  Redd    (5  East,  294), 

183. 
Edgerly  v.  Shaw   (5  Foster,  614), 

48,  50. 
Edgerton  v.  Wolf  (6  Gray,  453),  47. 
Edie  V.  East  India  Co.    (2  Burr. 

1221),  268,  315. 
Edis  V.  Bury  (C  Barn.  &  Cres.  (la 

E.G.  L.  R.)  433),  8. 
Edmunds  X).  Gates  (2  Jur.  183),  346. 
Edmunds  v.  Diggs  (1  Gratt.  359), 

244,  464,  466. 
Edmunds  v.   Groves   (2  M.  &  W. 

642),  154. 
Edmundson  v.  Drake  (5  Pet.  624), 

420. 
Edson  V.   Fuller   (2  Foster,  183), 

226. 
Edson  V.  Jacobs  (14  La.  294),  340. 
Edson  V.  Miller  (22   N.    H.    183), 

223. 
Edwards  v.    Davenport   (20  Fed. 

Rep.  756),  .52,  53. 
Edwards  v.  Dick  (4  B.  &  Aid.  212), 

178,  259. 
Edwards  r.   Jones    (1    My.    &  Cr. 

226),  252,   (7  C.  &  P.  663),  293. 
Edwards    v.    Moses    (2    Knott    & 

McCord,  443),  442. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Edwards  v.  Porter   (2  Coldw.  42), 

201. 
Edwards  v.  Thomas  (66  Mo.  482), 

78,  82,  (2  Mo.  App.  283),  289,  300, 
Effingeru.  Richards  (35  Miss.  540), 

41. 
Egertou  v.  Youug  (43  111.  464),  305. 
Egeraann  v.  Henschen  (56  Mo.  123), 

423. 
Ehle  V.  Chittenango  B'k  (24  N.  Y. 

548),  29. 
Ehrichs  v.  De  Mill  (75  N.  Y.  370), 

5,  26. 
Eichelberger  v.  Eindley  (7  Har.  & 

J.  381),  355,  442,  445. 
Eilbert  v.  Finkbeiner    (68   Pa.  St. 

247),  271,  272. 
Eisner  v.  Kelley  (3  Daly,  485),  167, 

425. 
Elbert     v.    McClelland    (8    Bush, 

577),  393. 
Elbiuger     Actien-Gerellschaft     v. 

Claye  (L.  R.  &  Q.  B.  313),  87. 
Eldred  v.  Malloy  (2  Col.  320),  25. 
Eldridge  v.  Holway  (18  111.  445),  89. 
Elford  V.  Teed  (1  M.  &  S.  28),  214, 

317. 
Elgin  V.  Hill  (27  Cal.  372),  295. 
Elkins  V.  Boston,   etc.,  R.   R,  Co. 

(19  N.  H.  337), 88. 
Ellett  V.  Britton  (6  Texas,  229),  26. 
Ellicott  V.  Martin  (6  Md.  509),  303. 
Elliott  V.  Abbott  (12   N.  H.    549), 

120,  243. 
Elliott  V.  Deason  (64  Ga.  63),  34a, 

295. 
Elliott  V.  Dudley    (19  Barb.  326), 

98. 
Elliott  V.  Giess  (7  Harris  &  J.  457), 

418. 
Elliott  V.   Ince    (7  DeG.  M.  &   G. 

478),  53. 
Elliott  V.  Levings  (55  111.  214),  394, 

397. 


Elliott  V.  Martin  (6  Md.  509) ,  154,. 

289. 
Elliott  V.  Stocks  (67  Ala.  336),  75. 
Ellis  V.  Clark  (110  Mass.  392),  156, 

157. 
Ellis  V.  Commercial  Bk.   (7  How. 

(Miss.)  294),  327,  314,341. 
Ellis  V.  Francis  (9  Ga.  327),  89. 
Ellis  V.  GaUindo  (1  Doug.  250),  232. 
Ellis  V.  Mason  (7  Dowling,  598) ,  23. 
Ellis  V.  McLemore  (1  Bailey  L.  13), 

18. 
Ellis  V.  Ohio  Life  Ins.  Co.  (4  Ohio 

St.  628),  230,  399,  400,  451. 
Ellis  V.  Pulsifer  (4  Allen,  165),  123. 
Ellis  V.  Wheeler  (3  Pick.  19),  15,. 

243,  441. 
Ellis  V.  Wild  (6  Mass.  321),  244. 
Ellison   V.    Collinridge  (9  C.  &  B. 

570),  23,  434. 
Ellsworth  V.  Brewer  (11  Pick.  316),. 

266,  371. 
Ells^Yorth  v.  St.    Louis   R.  R.   Co.. 

(98  N.  Y.  553),  116. 
Elstonv.  Gillis  (69  Ind.  128),  251. 
Elston  V.  Jasper  (45  Texas,  409), 

52,  55. 
Elting  V.  Brinkerhoff  (2  Hall,  459),. 

211. 
Elwell  V.  Dodge  (33  Barb.  336),  121, 

126,  127. 
Elwell  V.  Shaw  (16  Mass.  42),  85. 
Elwood  V.  Deidendorf  (5  Barb.  398), 

379. 
Elworthy  v.   Bird    (2  Sim.  &  Stu. 

372),  183. 
Elyt7.  Clute  (19  Hun    (N.  Y.)  35), 

13. 
Elyv.  James  (123  Mass.  36),  379. 
Ely  y.  Webster  (102  Mass.  304),  198. 
Emanuel  v.  White'  (34  Miss.  56), 

165,  166. 
Emblen   v.    Dartnell  (12    M.    &  W. 

830),  310. 

859 


TABLK    OK    CASES    CITED. 


References  are  to  Sections, 


Emmcr.sou    r.    Burns    (HI  Mass. 

348),  303. 
Emerson  v.  Cutts  (12  Mass.  7  &  8), 

2GG. 
Emerson  v.  Prov.  Hat  Man.  Co.  (12 

Mass.  237),  75,  77,  89,  123,  124. 
Emery  v.  Hobson  (03  Me.  32),  442. 
Emery  v.  Irving  Nat  Bk.    (25  Ohio 

St.  255),  493,  494. 
Emery  V.  Mariaville    (5G   Me.  315), 

137,  139. 
Emly  V.  Lye  (15  East,  7),  244. 
Emraatt  v.  Kearns  (5  Bing.   N.  C. 

559),  416,  418. 
Empire  Transfer  Co.  v.  Steele  (70 

Pa.  St.  190),  48,  491. 
English  V.  Darley  (2  Bos.  &  P.  61), 

415,  423,  424. 
English  V.  Wafles  (13    Iowa,  57), 

305. 
English  V.   Wall   (12    Rob.     (La.) 

132),  218,  355. 
Enthorer  v.  Hoyle  (9  England  L.  & 

Eq.  434),  35. 
Enthoveu  v.  Hoyle  (13  C.  B.   373), 

17. 
Eplerr.  Funk  (8  Barr.  4G8),  295. 
Epperson  y.  Nugent  (57  Miss.  45), 

46. 
Ernst  y.  Steckmau  (74  Pa.  St  13), 

25. 
Ervin  r?.  Morris  (26  Kan.  G64),  72. 
Erwin  v.  Adams  (2  La.  318),  314. 
Erwin  v.  Branch  Bk.  at  Mobile  (14 

Ala.  307),  127. 
Erwin  v.  Carroll  (1  Yerg.  144),  14G. 
Erwin  v.  Doavus(15  N.  Y.  575),  259, 

313. 
Ervviu  V.  Lynn  (IG  Ohio   St.    547), 

26C. 
Erwin  v.  Sanders  (1  Cow.  249),  42, 

162. 
Esdaile  v.  Lanauze  (1  Younge  &  C. 

347),  77,  (1  Younge  &  C.  394),  77. 
860 


Esley    V.    People  of  111.    (23   Kan. 

510),  17. 
Espy  V.  Bk.of  Cincinnati  (18  Wall. 

620),  226,  230,  432,  433,  436,  437, 

451. 
Essex  V.  Atkins  (14  Vcs.  542),  62. 
Essex  Co.   V.  Edmonds    (12  Gray, 

273),  272,  273. 
Essex  Co.  Nat.  Bk.  v.  Bk.  of  Mon- 
treal (7  Blss.  193),  436,  452. 
Estesu.  Kyle  (Meigs  34),  506. 
Estes  V.   Simpson    (13   Nev.  472), 

164. 
Estep  r.  Burke    (19  Ired.  87),  164. 
Ethcridge    v.    Gallaher    (55    Miss. 

464),  1.54. 
Etheridge  v.  Ladd  (44   Barb.    69), 

318. 
Etting  V.  Schuylkill  Bk.    (2   Barr. 

355),  337,  346. 
Etting  V.  Vanderlyn  (4  Johns.  237), 

166. 
Eureka  Co.   v.  Edwards    (71    Ala. 

248),  47. 
Evans  v.  Anderson   (78   111.  558), 

506. 
Evans  v.  Cramliugton  (1  Sliow.  4, 

2  Sliovv.  509),  263. 
Evans  v.  Foreman  (60  Mo.  449),  392. 
Evans  t:  Gee  (11  Pet.  80),  256,  266. 
Evans  V.  Heny  (I  Bay,  13),  287. 
Evans  v.  Kymer  (1  B.  &  Ad.  528), 

301, 
Evans  v.  Secrest   (3  Ind.  545),  63. 
Evans  v.  Underwood  (I  Wils.  262), 

25. 
Evans  v.  Williamson  (79  N.  C.  96), 

201. 
Everard  v.  Watson   (1    El.    &  B. 

801),  346. 
Everett  v.  Collins  (2  Camp.    515), 

4.5G. 
Everett  v.  United  States  (6  Port. 

(Ala.)   166),  120. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Everett ».  Vendryes  (19  N.  Y.  436), 

507. 
Everhart  v.  Packett  (73  lud.  409), 

179. 
Eversole  v.   Maull   (50   Md.   103), 

295. 
Everson  v.  Carpenter   (17  Wend. 

419),  48,  50. 
Evertson  v.  Booth  (19  Johns.  491), 

305. 
Evertson  v.  Nat.  Bank   (06  N.  Y. 

22,  23),  473,  474. 
Evertson  v.  Nat.   Bk   of  Newport 

(11  N.  Y.  South  Car.  694),  471, 

473. 
Ewiug  V.  Clark  (8  Mo.  App.  570), 

417. 
E-wiug  V.  Butner  (60  Ga.  654),  163. 
Ewiug  V.  Smith  (3  Desa.  417),  62. 
Exchange  Bk.  v.  Knox  (19   Gratt. 

746),  464. 
Exchange  Bk.  v.   Boyce    (3  Rob. 

(La.)  307),  342. 
Exchange  Bk.   v.  Butner   (60  Ga. 

654>,203,293,  304. 
Exchange  Bk.  v.   Morrall   (16  W. 

Va.  546),  366. 
Exchange  Bk.  of  St.  Louis  v.  Bice 

(98  Mass.  288),  220,  222, 
Exchange  N.  B.  v.   Third    N.    B. 

(4  Fed.  Rep.  20),  125. 
Exeter  Bk.  v.   Sullivan   (6  N.  H. 

124),  110. 

F. 

Fairbanks «.  Metcalf  (8  Mass.  230), 

34d. 
Fairchild  v.  Holly  (10  Conn.  175), 

377. 
Fairchild  v.  Ogdensburg  R.  R.  Co. 

(15  New  York,  337),  128, 140,  355, 

356. 
Fairclough  v.  Pavia  (9  Exch.  690), 

295. 


Fairfield  «.  Adams  (16  Pick.  381), 

2(;2. 

Fairleet?.  Herring  (11  Moore,  520), 

223,  225,  227. 
Fairley  v.  Roch(Lutw,  891),  378. 
Fairthorne  v.  Blaquire  (6  Maule  & 

S.  73),  61. 
Faith  V.  Riclimond    (11  Ad.  &  EI. 

339),  103. 
Fales  V.  Russel  (16  Pick.  315),  366. 
Fall  River  Union  Bk.   v.    Willard 

(5  Met.  216),  211,  318. 
Fallows  V.   Taylor   (7  T.  R.  475), 

183. 
Falty    V.  Freemans  Trust.  Co.  (I 

McArth.  522),  138. 
Faucourt  w.  Thorne  (9  Q.  B.  312),26. 
Fanning  v.  Conseque    (17  Johns. 

511),  506. 
Fanshawe  v.  Peet  (2  H.  &  M.  1),  II. 
Fanl^v.  Miller  (17  Gratt.  47),  158, 

506. 
■Parquhar  v.  Southey  (2   C.  &  P. 

497),  232. 
Fareira  v.  Gabell  (89  Pa.  St.  89), 

189. 
Farmer  v.  Sewall  (16  Me.  456),  196, 

292,  293. 
Farmer's  Bk.  v.  Allen  (18  Md.  475), 

326. 
Farmers  Bk.  v.  Battle  (4  Humph. 

86),  342,  343. 
Farmer's  Bk.  v.  Butler  (3  Lit.  498), 

341,  343. 
Farmer's  Bk.  v.  Duvall  (7  Gill  &  J. 

78),  315,  318,  337,  348. 
Farmers  Bk.  v.  Ewing  (78  Ky.  266), 

41,  363. 
Farmer's  Bk.  v.  Gunnell  (26  Gratt. 

137),  341,354. 
Farmer's  Bk.  v.  Harris  (2  Humph. 

311),  342. 
Farmer's  Bk.  v.  Iglehart   (6  Gill, 

50),  497. 

861 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Farmer's  Bk.  v.  Keynolds  (4  Rand. 

180),  467. 
Fai'iuer's  Bk.  v.  Vaumeter  (4  Raud. 

553),  2G1,  355,  357. 
Farmer's  Bk.  v.  Wassen  (48  Iowa, 

338),  497. 
Farmer's  Bk.  v.  Willis  (7   W.  Va. 

31),  108. 
Farmer's  &  Citizen's  Nat.   Bk.   v. 

Noson  (45  N.  Y.  702),  301. 
Farmer's  &  Mechanic's  Bk.  v.  Hum- 
phreys (36  Vt.  554),  286. 
Farmer's    &  Mechanics'    Bank   v. 

Kercheval  2  Mich.  506),  107,  421. 
Farmer's  &  Meclianics'  Bk.  v.  King 

(57  Pa.  St.  364),  447. 
Farmer's    &    Mechanic's    Bk.     v. 

Needles  (52  Mo.  17),  117. 
Farmer's     &    Mechanic's    Bk.    v. 

Rathboue  (26  Vt.  19),  232,  422. 
Farmer's  Nat.   B.  v.   Fletchej'  (44 

Iowa,  256),  305. 
Farmer's  Nat.    Bk.   v.   Rasmusson 

(1  Dakota,  60),  28. 
Farmer's  Bk.  v.  Hathaway  (36  Vt. 

539),  301. 
Farmer's,  etc.,    Bk.  v.    Lucas  (26 

Ohio  St.  385),  280. 
Farmer's,  etc.,  Bank  v.   Butcher's, 

etc..   Bank  (16  New  York,  125), 

120,  438. 
Farmer's,  etc.,    Bk.   v.  Troy  City 

Bk.  (1  Doug.  (Mich.)   457),  120. 
Farmington  S.  B.  v.   Fall  (71  Me. 

79),  118. 
Farusworth  v.  Allen  (4  Gray,  453) , 

317. 
Farusworth  v.  Drake  (11  Ind.  103), 

19. 
Farusworth  V.  Sharp  (4  Sneed,  55), 

393. 
Farnum  v.  Brooks  (9  Pick.  212),  52. 
Farnum  v.   Fowle  (12    Mass.   89), 

316. 

862 


Farr  v.  Stevens  (26  Vt.  299),  379. 
Farrar  v.  Davis  (53  Vt.  597),  183. 
Farrar  v.  Defline  (1   C.  &  P.  580), 

106. 
Farrar  v.  Freeman  (44  Vt.  63),  201. 
Fan-ar  v.  Oilman  (19  Me.  440),  120. 
Farrar  v.  Peterson  (52  Iowa,  420), 

83. 
Farrcll  v.  Lovett  (69  Me.  326),  289. 
Farringtou  v.   Frankfort    Bk.    (24 

Barb.  554),  165,  168,  379. 
Farwell    v.  Curtis  (7  Biss.    160), 

442,  443,  444. 
Farwell  v.  Kennett  (7  Mo.  596),  29. 
Fash  V.  Ross  (2  Hill  (S.   C.)  294), 

87. 
Fassin  v.  Hubbard  (55  N.  Y.  470), 

260,  336. 
Faulkner  v.  Faulkner  (73  Mo.  327), 

163. 
Faulkner   v.   Ware    (34    Ga.    498), 

303. 
Faut  V.  Miller  (17  Gratt.  77),  196, 

510. 
Fawcett  v.    Fresliwater    (31   Ohio 

St.  637),  424. 
Fawcett  v.  Nat.  Life  Ins.  Co.  (97 

111.  19),  268. 
Faxson  v.  Dyson  (1  Cranch  C.  C. 

441),  146. 
Fay  V.  Fay   (121   Mass.  561),  178, 

193. 
Fay  V.  Guniou  (131  Mass.  31),  241. 
Fay  V.  Noble  (12  Cush.  1),  115. 
Fay  V.  Smith  (1  Allen,  477),  394. 
Fayette  Co.    S.   B.   v.   StefEen    (54 

Iowa,  214),  285. 
Feamster  v.  Withrow  (12  W.  Va. 

611),  379,380. 
Fears  v.  Brooks  (12  Ga.  195),  62. 
Feaslee  v.  Robbins    (3   Met.  164), 

230. 
Fell  V.  Cook  (44  Iowa,  485),  193. 
Fell  V.  Dial  (14  S.  C.  247),  336. 


TABLf:    OF    CASES    CITED. 


References  are  to  Sections. 


Fellows  V.  Prentiss  (3  Deuio,  520), 

166,  167,  424,  425. 
Fellows  V.  Tauu  (9  Ala.  999) ,  62. 
Fellows  V.  Wymau  (33  N.  H.  351,) 

108. 
Fellspoint  Sav.  Ins.  v.  Weedon  (18 

Md.  528),  48r,,488. 
Feuby  v.  Pritchard  (2  Saudf.  151), 

170. 
Fenn  v.  Dugdale  (40  Mo.  03),  376. 
Feuu  V.  Harrison  (3  T.  R.  757),  81, 

244,  264,  380. 
Fentou  v.  Ham  (35  Mo.  409),  178, 

193. 
Fenton  V.  Robinson  (11  N.  Y.  S.  C. 

(4  Huu)  252),  285. 
Feutum  r.  Pocock  (5  Taunt.  193), 

158,  232,  422,  424. 
Ferguson  v.  Bell  (17  Mo.  347),  47. 
Ferguson    v.   Landrara     (5  Bush, 

231),  482. 
Ferguson  v.   Oliver  (8   Sm.   &  M. 

332),  203. 
Teruandez    v.  Lewis   (1    McCord, 

321),  211,  215,  216. 
Ferris  v.  Adams  (23  Vt.  136),  186. 
Ferris   i\   Bond    (4   Barn.    &  Aid. 

679),  11. 
Ferris  v.  Shaw    (5  Mo.  App.  279), 

103. 
Fesenmayer  v.  Adcock  (16  M.  &  W. 

449),  23. 
Fetrow  v.  Wiseman  (40  Ind.  148), 

47,  48. 
Fetters  v.  Muncie  Nat.  Bk.  (34  Ind. 

251),  301. 
Fettiplace  v.  Gorges  (1  Ves.  46), 

G2. 
Field  V.   Mayor  of  New  York   (2 

Seld.  179),  5«. 
Field  V.  Nickersou  (13  Mass.  131), 

215. 
Field  V.  N.  O.  Newspaper  Co.  (21 
La.  Ann.  24),  310. 


Field   r.  SchiefEeliu  (7  Johns.  Ch. 

150),  145. 
Field  V.  Stagg  (52  Mo.  534),  35. 
Field  V.  Tibbetts  (57  Me.  359),  297. 
Fields   V.    Tunstou    (1   Cold.  40), 

295. 
Findley  v.  Hill  (8  Ore.  248),  424. 
Fink   V.  Cox   (18   Johns.  145),  159, 

252. 
Finkney  v.  Reynous  (4  Burr.  2069), 

198. 
Finley  v.  Green   (85   111.  535),  270, 

273. 
Finney  v.  Callendar  (8   Minn.  42), 

34c. 
Finney  v.  Shirley  (7  Mo.  42),  23. 
Fireman's  Ins.  Co.  v.  McMillan  (29 

Ala.  160),  BUI. 
First  Municipality  v.  Orleans  The- 
ater Co.  (2  Robinson,  244),  133, 
134. 
First  Nat.  Bk.  v.  Bentley  (27  Minn. 

87),  166. 
First  Nat.  Bk.  v.  Bensley  (2  Fed. 

Rep.  609),  227. 
First  Nat.  Bk.  v.  Bynum  (84  N.  C. 

24),  28. 
First  Nat.  Bk.  v.  Canatsey  (34  Ind. 

149),  28. 
First  Nat.   Bk.  v.   Carpenter    (34 

Iowa,  432),  98. 
First  Nat.   Bk.   v.   Clark  (61    Md. 

401),  221,  225. 
First  Nat.   Bk.  v.  Co.  Comrs.   (14 

Minn.  79),  473. 
First  Nat.   Bk.  v.  Dubuque   S.    R. 
R.  Co.    (52   Iowa,  378    (35  Am. 
Rep.  281),  56,  28. 
First  Nat.  Bk.  v.  Fourth  Nat,  Bk. 

(17  Hun,  332),  443. 
First  Nat.  Bk.  v.   Fowler  (36  Ohio 

St.  524),  13,  304. 
First  Nat.  Bk.  v.  Gray  (63  Mo.  33), 
28,  82,  85,   (71  Mo.  627),  2576. 

863 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


First  Nat.   Bk.  v.   Grant   (71   Me. 

374),  295. 
First  Nat.  Bk.   v.   Hall    (U    New 

York,  395;,  127. 
First  Nat.  Bk.  v.  Harris  (108  Mass. 

514),  44fi. 
First    Nat.    Bk.    v.    Ileudrie    (49 

Iowa,  402),  173. 
First  Nat.  Bk.   v.  Hogan  (47  Mo. 

472),  122. 
First  Nat.  Bk.   v.  Kelly   (57  N.  Y. 

34),  491. 
First  Nat.  Bk.  v.  Latton    (07   Ind. 

25G),  285. 
First  Nat.  Bk.  v.  Leach  (52  N.  Y. 

350),  436. 
First  Nat.  Bk.  v.  Lierman  (5  Neb. 

247),  285. 
First  Nat.  Bk.  v.  Marlow  (71  Mo. 

618),  28. 
First  Nat.  Bk.  v.  Morgan    (6  Hun, 

346),  100,  379. 
First  Nat.  Bk.  v.  Morris  (1   Hun, 

680),  50G. 
First  Nat.  Bk.  v.  Mount  Tabor  (52 

Vt.  87),  473,  478. 
First  Nat.    Bk.    v.    Needhain   (29 

Ohio,  249),  446. 
First  Nat.   Bk.  v.  Owen  (23  Iowa, 

185),  317. 
First  Nat.  Bk.  v.  Parsons  (19  Minn. 

183),  83. 
First  Nat.  Bk.  v.  Peck  (8  Kan.  060), 

400,  474. 
First  Nat.  Bk.  v.   Plankinton    (27 

Wis.  177),  199. 
First  Nat.   Bk.  v.  Price  (52  Iowa, 

570),  296,  315. 
First  Nat.  Bk.  v.  Eeuo  Co.   Bk.  (3 

Fed.  Report,  257),  268. 
First  Nat.   Bk.  v.   Kicker  (71   111. 

439),  451. 
First  Nat.  Bk.  v.  Ryerson  (23  Iowa, 

508),  335,  344. 
804 


First  Nat.    Bk.    v.   Scott    Co.   (14 

Minn.  77),  297. 
First  Nat.  Bk.   v.   Tisdale    (84  N. 

Y.  655),  172a. 
First  Nat.  Bk.  v.  Werst  (52  Iowa, 

684),  304. 
First  Nat.  Bk.  v.  Whitman  (94  U. 

S.  343),  223. 
First  Nat.   Bk.  v.  Wood   (51   Vt. 

473),  338,  342,  348. 
Firth  V.  Thrush  (8  B.  &  C.  387),  348, 

358. 
Fish  V.   First  Nat.  Bk.  (42  Mich. 

203),  259,  (42  Mich.  404),  259. 
Fish  V.  Jackman  (19  Me.  468),  341. 
Fisher  v.   Beckwith    (19   Vt.   31), 

217,  222. 
Fisher  v.  Bradford    (7  Greeuleaf, 

28),  34. 
Fisher  v.  Carroll  (G  Ired.  Eq.  485), 

366. 
Fisher  17.  Ellis  (3  Pick.  322),  17. 
Fisher  v.  Evans  (5  Binu.  542),  340, 

342. 
Fisher  v.   Fisher   (98  Mass.  303), 

304. 
Fislier  v.  Krutz  (9  Kan.  510),  80. 
Fisher  v.   Lelaud    (4   Cush.    456), 

295,  299. 
Fisher  v.  Leslie  (1  Esp.  425),  23. 
Fisher  u.  Marvin  (47  Barb.    159), 

379. 
Fisher  v.    Mowbray  (8  East.  330), 

47. 
Fisher  v.   Otes    (3  Chandler,   83), 

249,  305. 
Fisher  v.  Pomfret  (12  Mod.  125), 

21. 
Fisher  v.  Riemau  (12  Md.  511),  244. 
Fisher  v.   Shattuck  (17  Pick.  252), 

287. 
Fisher  v.  Von  Behren  (70  Ind.  19), 

285. 
Fisku.  Brackett  (32  Vt.  798),  506. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Fisk  V.  City  of   Kenosha   (26  Wis. 

29),  482. 
Fiske  V.   Eldridgc   (12  Gray,  474), 

123. 
Fitch  V.  Joues  (5  Ellis  &  B.  238), 

11,41,  178;    (32  Eng.   L.   &  Eq. 

134),  178,  303. 
Fitch  V.  Lawtou   (6  (Miss.)  How. 

371),  124. 
Fitch  V.  Waite  (5  Conn.  117),  251. 
Fitchburg  Bank  v.  Greenwood  (2 

AUen,  434),  260. 
Fitchburg  Bk.  v.  Perley  (2  Allen, 

433),  337. 
Fitzgerald  v.  Barber  (13  Mo.  192), 

172. 
Fitzgerald  v.  Reid   (9  Smed.  &  M. 

94),  54. 
Fitzhugh  V.  "Wilcox  (12  Barb.  235). 

52. 
Flack  V.   Green  (3  Gill  &  J.  474), 

348. 
Flagg  V.  Palmyra  (33  Mo.  40),  480. 
Flanagan  v.   Meyer   (41  Ala.  133), 

34c. 
Flats  V.  Mulhall  (72  Mo.  522),  50C. 
Fleckuer  v.  Bk.  of  U.  S.  (8  Wheat. 

338),  26,  117,  120,  127,   (8  Wheat. 

360),  262. 
Fleming  v.  Burge  (6  Ala.  373),  22. 
Fleming  v.  Fulton  (6  How.  (Miss.) 

473),  346. 
Fleming  ».  Gilbert  (8  Johns.  520), 

42. 
Flemming  v.   McClain  (13  Pa.  St. 

177),  454,  455. 
Flemming  v.  Mulligan  (2  McCord, 

173),  292. 
Flemming  v.  Nail  (1  Texas,  246), 

29. 
Fletcher  v.  Blodgett  (16  Vt.  26),  41, 

41a. 
Fletcher  v.  Braddyll  (3  Stark.  64), 

348. 


65 


Fletcher  v.  Chase   (16  N.  H.  38), 

201. 
Fletcher  v.  Cushee   (32  Me.   587), 

154,  303. 
Fletcher   v.   Dana  (4  Blackf.  377), 

262. 
Fletcher  v.  Dysart  (9  B.  Men.  413), 

83. 
Fletcher  v.  Dyte  (2  T.  R.  78),  13. 
Fletcher  v.  Froggatt   (2    C.  &  P. 

569),  365. 
Fletcher  v.  Manning  (12  M.  &  W. 

571),  455. 
Fletcher  v.    Schaumburg  (41   Mo. 

501),  263. 
Fletcher  v.  Thompson   (55  N.  H, 

208),  29c. 
Flexner  v.  Dickerson  (72  Ala.  318), 

47. 
Flight  V.  McLean  (16  M.  &  W.  51), 

20. 
Flight  V.  Read  (22  L.  J.  Exch.  265), 

162,  180. 
Flint  V.  Flint  (6  Allen,  34),  12,  258, 

265,  295. 
Flint  V.  Pattee  (33  N.  H.  520),  160, 

252. 
Flint  V.  Rogers  (15  Me.  57),  317. 
Flowers  v.  Billings   (45  Ala.  488), 

12. 
Floyd  Acceptances   (7   Wall.  679, 

681),  132,  136. 
Floyd  i\  Miller  (61  Ind.  225),  107. 
Foard  v.  Johnson  (2  Ala.  565),  342, 
Foden  v.  Sharp  (4  Johns.  183),  227, 

310,  506. 
Fogarties  v.  State  Bk.  (12  Rich.  L. 

518),  452. 
Fogg  V.  Sawer  (9  N.  H.  365),  244, 

466. 
Fogg  V.  Virgin  (19  Me.  352),  123. 
Poland  V.  Boyd  (23  Pa.  St.  476),  356. 
Folcott  V.  Ogden   (1  H.   Bl.    135), 

506. 

865 


TABLE    OF    CASES    CITED. 


References  are  to  Sectious. 


Foley  V.    Cowgill  (o    Blackf.  18), 

Folger  V.  Chase  (18  Pick.  63),  12G, 

l-'7,  2(52,  204,  318,  394. 
Follett  V.  Steele  (IG  Vt.  30),  380, 
Folsou  r.  Garuer  (15  Mo.  494),  52. 
Foltz  V.  Pouree  (2  Desau.  Eq.  40), 

202. 
Fontaiue  v.  Gunter  (31  Ala.  258), 

393. 
Foot  V.  Sabiu  (19  Johns.  154),  98, 

99. 
Forbes  v.  Cochrane  (2  Barn.  &  C. 

448),  50G. 
Forbes  v.  Espy  (21  Ohio  St.  483), 

19. 
Forbes  v.  Marshall  (11  Exch.  166), 

163. 
Forbes  v.  Omaha  Nat.  Bk.  (10  Neb. 

338),  343. 
Forbes  v.    Williams    (15    Bradw. 

305),  160. 
Ford   V.   Auglerodt    (37   Mo.   50), 

227. 
Ford  V.  Buckeye  Ins.  Co.  (6  Bush, 

133),  50G. 
Ford  V.  Ford  (17  Pick.  418),  392. 
Ford  V.  Henderson    (34  Cal.  673), 

270. 
Ford  V.   McClung  (5  W.  Va.  156), 

442. 
Ford  V.  Mitchell  (15  Wis.  304),  29, 

(15  Wis.  304),  48G. 
Ford  V.  Phillips  (1  Pick.  202),  50. 
Ford  V.  Ragland  (25  Ark.  612),  185. 
Ford  V.  Williams,  21  How.  287),  88. 
Foreman  v.  Beckwith  (73  Ind.  55), 

247. 
Forman  v.   Wright  (11  C.  B.  481), 

154. 
Forney  v.   Shipp  (4  Jones,  (N.  C.) 

527),  87. 
Forsyth    v.   Bonta   (5  Bush,  547), 

398. 

866 


Forward  v.  Thomson  (12  Up.  Can. 

Q.  B.  R.  103),  15. 
Foss  V.  Hildreth  (10  Allen,  26,  80), 

287. 
Foster  v.  Andrews  (2  Pa.  160),  98. 
Foster  v.  Clifford   (44  Wis.  569), 

227. 
Foster  v.   Dawber   (6  Exch.  850), 

232. 
Foster  v.  Essex  Bk.  (17  Mass.  479), 

121,  497. 
Foster  v.  Fuller  (6  Mass.  58),  87, 

145,  148. 
Foster  v.  Jolly  (1  C.  M.  &  R.  703), 

273. 
Foster  v.  Julien  (24  New  York,  28), 

358. 
Foster  v.  Jurdison  (16  East,  105), 

363. 
Foster  v.  McDonald   (5  Ala.  376), 

338,  339. 
Fosters.  Metts  (55  Miss.  77),  174. 
Foster  v.  Parker  (2   Law  R.  C.  P. 

Div.  18),  355. 
Foster  v.  Paulk  (41  Me.  425),  441, 

443. 
Foster  v.  Pearson   (1  C.   M.  &  R. 

849),  168. 
Foster  v.  Shattuck  (2  N.  H.  447), 

19,  243. 
Foster    v.    Smeath  (2   Rich.  338), 

343. 
Foster  v.  Walker  (1  Ala.  177),  251. 
Foster  v.   Wise  (27  La.  Ann.  538), 

175. 
Foulay  v.  Hall  (12  Ohio,  615),  412. 
Foulke  V.  Fleming  (13  Md.  392),  4, 

506. 
Fountain  v.  Anderson  (33  Ga.  372), 

145. 
Fourth  Nat.    Bk.  v.  Henschuh  (52 

Mo.  207),  313,  336. 
Foust  V.   Board  of  Publication  (8 

Lea,  552),  159. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Fowler  v.  Atkinson  (6  Minn.  578), 

123,  137. 
Fowler    v.  Brantly  (14  Pet.  318), 

315. 
Fowler  V.   Brooks  (13  N.  H.  420), 

424. 
Fowler   v.    Ludwig    (34   Me.  455), 

380. 
Fowler  v.   Shearer  (7  Mass.  14), 

172. 
Fowler  v.   Strickland   (107  Mass. 

552),  292. 
Fox  V.  Clifton  (6  Bing.  795),  95. 
Fox  V.  Drake  (8  Cow.  191),  137. 
Fox  V.  Foster  (4  Pa.  St.  119),  249. 
Fox  u.  Shipman   (19    Mich.    218), 

138. 
Foy  V.  Houghton    (85  N.  C.  168), 

202. 
Fralick  v.    Norton  (2  Mich.   130), 

25. 
Francis  v.  Felmet  (4   Dev.   &  Bat. 

498), 47. 
Francis  v.   Joseph     (3   Edw.    Ch. 

182),  166,  169. 
Francis  v.  Miller  (8  Md.  274),  201. 
Francis  v.   Rucker  (Ambler,  672), 

408. 
Frank  V.  Trgens  (27  Minn.  43),  152. 
Frank  v.    Knigler    (36  Tex.    305), 

258. 
Frank  v  Lillienfleld  (33  Gratt.  349), 

62,   155,  270,  272,  282,  283,  289. 
Frank  v.  Longstreet  (44  Ga.  185), 

259. 
Frank  v.  Wessells  (64  N.  Y.  158), 

25,  29,  486. 
Frank,  Ex  parte  (7  Bing.  762),  61. 
Franklin  Life  Ins.  Co.  v.  Courtney 

(60  Ind.  349),  394. 
Franklin  Bk.   5.  Freeman  (16  Pick. 

535),  440,  441. 
Franklin  Sav.  Inst.  v.  Heinsman  (1 

Mo.  App.  336),  280. 


Franklin  v.  Lang  (7  Gill  &  J.  419), 

203. 
Franklin  v.   Lynch  (52   Md.  270), 

226. 
Franklin  u.  March  (6N.  H.  364),  23. 
Franklin    v.    Twogood    (18  Iowa, 

517),  247. 
Franklin  v.   Vanderpool    (1    Hall, 

78),  355,  442,  445. 
Franklyn  Sav.   Inst.  v.   Reed  (125 

Mass.  365),  41. 
Eraser  v.  Charleston  (11  S.  C.  486), 

497. 
Eraseer  v.  Massey  (14  Ind.  352),  49, 

262. 
Erazer's  Adm'r  v.Erazer  (13  Bush, 

400),  269. 
Frazier  v.   Brownlow  (3   Ire.   Eq. 

237),  62. 
Frazier  v.  Jordon  (8  El.  &B1.  303), 

424. 
Frazier  v.  WarfieM  (8  Smed.  &  M. 

220),  507. 
Frayzer  v.  Dameron  (6  Mo.   App. 

153),  313. 
Fredd  v.    Eaves    (4   Harr.  (Del.) 

385),  262. 
Fredericks.  Clemins  (60  Mo.  3l3), 

285. 
Frederick  v.  Cotton  (2  Shower,  8), 

21. 
Frederick  v.  Winans  (51  "Wis.  472), 

154,  256. 
Free  v.  Hawkins    (8   Taunt.    92), 

273. 
Freed  v.  Brown  (55  Ind.    310),   52. 
Freeman  v.  Boynton  (7  Mass.  483), 

212,  213,  311,  318,  366,  373. 
Freeman  v.   Britton    (2  Har.  209), 

292. 
Freeman  v.  Ellison  (37  Mich.  459), 

34,  261. 
Freeman  v.  Ross  (15  Ga.  252),  24, 
296. 

8()7 


TABLK    OF    CASES    CITED. 


References  are  to  Sections. 

Freeman  v.    Staa(8    (4   Ilalst.    Ch.  I  Fry  v.  Dmlloy  (20  La.  Ann.  308), 


814),  57. 
Freeman's  B'k  v.  Perkins   (7  Shep. 

292),  33j. 
Freeman's  B'k  u.   Rollins  (13  Me. 

202),  424. 
Freeman's    B'k  v.     Kuckman    (16 

Gratt.  126),  30,  249,  25(;,  314,  506. 
Freeman's  Nat.  B'k  v.  Savery  (127 

Mass.  75),  289. 


28,  29. 
Fi-y  V.  Evans  (8  Wend.  .WO),  148. 
Fry  V.  Hill  (7  Taunt.  397),  215,  216. 
Fry  V.  Rosseau  (3  McLean,  106),  29.' 
Frye  v.  Bank  of  Illinois  (5  Oilman, 

332),  241. 
Frye  v.  Tucker  (24  111.  180),  118. 
Fuke  V.  Smith  (7  Abb.  (n.  s.)  106), 

244. 


Freese  v.   Bro-miell   (35    N.    J.  L.   }  Fuller  ».  Hooper  (3  Gray,  334),  124, 


285),  30,  506,  507. 
Frelight?.  Flatt  (5  Cow.  494),  204. 
French    v.   B'k  of     Columbia    (4 

Cranch,  59),  158,  355. 
French  v.   French    (8  Ohio,  214), 

57. 
French  v.  Gordon  (10  Kan.  37),  20, 

202. 
French  v.  Jarvis   (29   Conn.  348), 

361,  '^C. 
French   v.    McAndrew    (CI    Miss. 

187),  47. 
French  ».  Price  (24  Pick.  13),  87. 
French  v.  Turner  (15  Ind.  62),  247, 

264,  305. 
Freundr.  Importers'  &  Traders  Nat. 

B'k  (19N.  Y.  S.  C.  537),  436,  439, 

449. 
Freund  v.  Importers,  etc.,  Bank  (76 

N.  Y.  352),  247. 
Friend  v.  Dmyee  (17  Fla.  Ill),  97. 
Friend  v.  Wilkinson  (9  Gratt.  31), 

337,  341. 
Friermood  v.  Rouser  (17  Ind.  461), 

174. 
Frisbie  v.  Lamed  (21  Wend.  4.50), 

379. 
Fritsch  v.  Heesless  (40  Mo.  556), 

34e. 
Frois  V.  Mayfield  (33  Tex.  801),  425. 
Frontier  Bk.  v.  Moss  (22  Me.  88), 

466, 
Frost  V.  Wood  (2  Conn.  23),  77. 
808 


125,  356. 
Fuller  V.  Hutchings  (10  Cal.  526), 

303. 
Fuller  V.  McDonald  (8  Greenleaf, 

213),  273,  274,  362,  363. 
Fuller  V.   Scott   (8  Kan.  25),  175, 

270,  421. 
Fullerton  v.   Bk.   of  U.  S.  (1  Pet. 

604),  318,  337. 
Fullerton  v.   Sturgiss  (4  Ohio  St. 

529),  35,  283. 
Fulton  V.  McCracken  (18  Md.  528), 

326,  335. 
Fulton  Bk.  V.  N.  Y.  &  Sharon  Canal 

Co.  (4  Paige,  127),  121,447. 
Fulton  Bk.  V.  Phoenix  Bk.  (1  Hall, 

619),  163,  464. 
Fultz  V.  Walters  (1  Mont.  165),  247, 

486. 
Funderburk  v.  Goroam  (46  Ga.  296), 

146. 
Furniss  v.  Gilchrist  (1  Sand.  53), 

118. 
Furze  w.  Shai'wood  (2  Q.  B.  (42  E. 

C.  L.  R.)  338),  346,347. 
Fydell  v.  Clark  (1  Esp.  447),  244, 

379. 

G. 

Gaar   v.    Huggins    (12  Bush,  259), 

106. 
Gafeee's  Trusts  In  re  (1  Macu.  &  G. 

541),  62. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Gaffneyv.  Bradford  (2  Bailey,  441), 

251. 
Gage  V.   Gage   (10  Tost.    (N.  H.) 

420),  75. 
Gage  V.  Lewis  (68  III.  604),  201. 
Gage  V.  Mechanics  Nat.  Bk.  (79  111. 

62),  419. 
Gage  V.  Morse  (12  AUeu,  410),  492. 
Gage  V.  Sharp  (24  Iowa,  15),  280, 

289. 
Gahn    v.    Niemcewiez    (11   Wend. 

312),  424. 
Gaines  v.  Dorsett  (18  La.  Ann.  563) , 

25. 
Gaines  v.  Shelton  (47  Ala.  413),  29c, 
Gaither  v.  Farmer's,   etc.,  Bk.  (7 

Pet.  37),  292. 
Galbraith  v.  Fullerton  (53  111.  126), 

424. 
Gale  V.  Miller  (54  N.  Y.  538),  98, 

107,  109. 
Gale  V.  Tappan  (12  N.  H.  145),  80, 

212. 
Gale  V.  Walsh  (5T.  R.  239),  321,  334. 
Galen   v.    Niemcewiez   (16  Johns. 

321),  425. 
Galladay  v.  Bk.  of  Union  (2  Head, 

57),  327. 
Gallagher  v.  Roberts  (11  Me.  489), 

318,  379. 
Gallery  v.  Prindle  (14  Barb.  186), 

227. 
Galway  v.  Mathews  (10  East,  264), 

103. 
Gamble   v.  Grimes    (2    Ind.   392), 

179,  201. 
Gamble  v.  Hatton  (Peck,  130),  29. 
Gammon  v.   Everett   (25   Me.  66), 

310. 
Gammon  v.  Schmoll  (5  Taunt.  344), 

227. 
Gano  V.  Heath  (36  Mich.  441),  422. 
Gansevoort  v.  Williams  (14  Wend. 
133), 98. 


Gardner  v.  Adams  (12  Wend.  297), 

241. 
Gardner  v.  Bk.  of  Tenn,  (1  Swan, 

420),  327. 
Gardner  v.  Barger  (  —  Heisk.  669), 

25. 
Gardner  v.  Gardner  (32  Wend.  526), 

62,  252. 
Gardner  v.  Gorham   (1   Douglass 

(Mich.)  507),  380. 
Gardner  v.  Howland  (2  Pick.  599), 

491. 
Gardner  v.  Maxey  (9  B.  Mon.  90), 

179,  183,  198. 
Gardner  v.  Maynard  (7  Allen,  456), 

280,  376. 
Gardner  v.  Walsh  (5  E.  L.  &  B.  82), 

394. 
Gardner  v.  Watson  (13  111.   347), 

424. 
Garforth  o.  Bradley  (2  Ves.  675),  63. 
Garland  v.  Jacoms  (L.  R.  &  Exch. 

218),  97,  230. 
Garland  v.  Pamplin  (32Gratt.  303), 

62. 
Garland    v.   Richardson    (4   Rand. 

20(3),  305. 
Garuett  v.   Clarke    (11  Mod.  226), 

170. 
Garuett    v.    Woodcock    (1    Stark. 

475),  214,  317,  337. 
Garnett  v.  Yoe  (17  Ala.  74),  200. 
Garr  v.  Louisville  B.  Co.  (11  Bush, 

180),  28,  196,  260. 
Garrard  v.  Haddan  (67  Pa.  St.  82), 

397. 
Garrett  v.  Ferguson  (9  Mo.  125), 

422. 
Garrett  v.  Williams  (31  Ark.  240), 

249. 
Gait  V.  Galloway  (4  Pet.  332),  80. 
Garver  v.  Pontius  (00  Ind.  191),  28. 
Garvier   v.    Uowuie    (33  Cal.  170), 
357. 

869 


TAHLE    OF    CASES    CITED. 


References  are  to  Sectious, 


Garviu    v.   Wiswell    (83   111.  218), 

21,  257,  257a. 
Gaskin  v.  Wells  (15  Ind.  253),  379. 
Gatcrs    V.   Madeley  (6    Mees.  aud 

W.  423),  C3,  C4. 
Gates  w.  Beecher  (GO  N.  Y.  523),  212, 

313,  314. 
Gates  V.  Hibbard  (5  Biss.  99),  24. 
Gates  V.  McKee  (3  Kerii.  237),  410. 
Gates  V.  Uuiou  Bk.  (12  Heisk.  325), 

1C4. 
Gaul  V.  AVillis  (26  Pa.  St.  259),  288, 

292,  293. 
Gauut  V.  Taylor  (2  Hare,  413),  447. 
Gawtry  v.  Doaue  (51  New  York,  90), 

348,  359. 
Gay  V.   Ballou  (4  Wend.   493),  40, 

60. 
Gay  V.  Kingsley  (11  AUen,  345),  63, 

203. 
Gay  V.  Lander  (17  L.  J.  C.  P.  (00 

E.  C.  L.  R.)  287),  20. 
Gay  V.  Mott  (43  Ga.  252),  156. 
Gay  V.  Rainey  (89  111.  221),  506. 
Gazzam    v.    Armstrong    (3    Dana, 

552),  228. 
Geary  v.  Physic  (5  Barn.  &  C.  234), 

12,205. 
Geiger  v.  Clark  (13   Cal.  579),  270. 
Geill  V.  Jeremy  (1  M.  &  M.  61),  337. 
Gelpcke    v.    City  of    Dubuque   (I 

Wall.  175),  473,  475,  476. 
Genoa  v.  Woodi'ufE  (92  U.  S    502), 

476,  477. 
George  v.  Harris  (4N.  H.  533),  161. 
George  v.   Surrey  (1   Moody  &  M. 

510),  12,  205. 
Georgia  Xat.  Bk.  v.  Henderson  (46 

Ga.  495),  432,434. 
Geralopulo   v.   Wieler   (10    C.    B. 

690),  325,  378. 
Gerard  Bk.  v.  Bk.  of  Penn.  Town- 
ship (39  Pa.  St.  92),  430. 
Gerish  v.  Maher  (70  111.  470),  77. 
»70 


Gcr.  Security  Bk.   v.  Jefferson  (10 

Bush,  328),  497. 
German   v.    Ritchie  (9  Kan.  110), 

321. 
German  Sav.  Inst.  v.  Adac  (S  Fed. 

Rep.  100),  452. 
Germania  B'k  v.  Distler   (11  N.  Y. 

S.  C.  (4  Hun)  033),  10. 
Germania    Pire     Insurance  Co.   v. 

Memphis  R.    R.  (72   N.  Y.  90), 

492. 
Gibb  V.  Mather  (8  Bing.  214),  310. 
Gibbon  «.  Scott  (2  Stark.  280),  42. 
Gibbous  V.  R.  R.  Co.  (36  Ala.  410), 

481. 
Gibbs  V.  Linabury  (22  Mich.  492), 

284. 
Gibbs  V.  Tremont    (9    Exch.  25), 

409,  507,  511. 
Gibertt?.  W.  C.  V.  M,,  etc.,  R.  R. 

(33  Gratt.  599),  471,  477. 
Gibson  v.  Cooke  (20  Pick.  15),  5a, 

56,  209. 
Gibson  v.  Finley  (5Md.  Ch.  75),  5a. 
Gibson  v.  Hunter    (2    H.  Bl.    1S7, 

288),  19. 
Gibson  v.  Irby  (17  Texas,  173),  145. 
Gibson  v.  Miller  (29   Mich.   365), 

247,  294,  303. 
Gibson  v.  Minet  (1  H.  Bl.  509),  17. 
Gibson  v.  Soper  (0  Gray,  279),  52, 

55. 
Gibson  v.   Tobey    (53  Barb.    195), 

379, 
Giddings  v.  Giddings  (51  Vt.  221), 

162. 
GifEert  v.  West  (37  Wis.  116),  244. 
Gift  V.  Hall  (1  Humph.  480),  40,  41. 
Gifford,  Ex  parte  (0  Ves.  807),  424. 
Gilbert  v.  Anthony  (1  Yerg.  09),  35. 
Gilbert  v.  Dennis    (3    Mete.  495), 

318,  344,  346. 
Gilbert  v.  Iron  Man.  Co.  (11  Wend. 

627),  497. 


TABLE    OF    CASES    CITED. 


References  are  to  Seetious. 


Gilbert  v.  Nantucket  B'k   (5  Mass. 

»7),  257«. 
Gilbert    v.   N.  A.   F.  lus.    Co.   (23 

Wend.  43),  Ud. 
Gilbert  v.    Vachou  (61)  Ind.    372), 

34c. 
Gilbougli  V.  Norfolk    (1    Hughes, 

410),  473. 
Gilchrist  v.  Braude  (58  Wis.  184), 

106. 
Gilchrist  v.  Donnell  (53  Mo.  591), 

314,  338,  342,  359. 
Giles  V.  Bourne  (6  Maule  &  S.  73), 

10,  346. 
Gill    V.   Cubitt    (3   Barn.    &   Ores. 

466), .288,  300. 
Gill  V.  Morris  (11  Heisk.  614),  423. 
Gillv.  Palmer  (29  Conn.  54),  345. 
Gillaspie  v.  Kelley  (41  Ind.  158),  30, 
Gillespie   v.    Wheeler     (46    Conn. 

410),  270. 
Gillet  V.  New  Market   Sav.  B'k    (7 

Bradw.  499),  123. 
Gillett  V.  Averill  (5  Den.  85),  318. 
Gillett  V.  Smith  (18  Hun,  10),  392. 
Gillett  V.  Sweat  (1  Gill,  475),  394. 
Gillinghara  v.  Boardman  (29   Me. 

79),  417,418. 
Gillispie  v.  Hannahan    (4  McCord, 

503),  358. 
^lllman  v.    Douglass    Co.  (6  Nev. 

27),  375. 
Gilman  v.  Peck  (11  Vt.  516),  466. 
Gillett  w.  Ballou  (29  Vt.  296),  170. 
Gilmore  v.    Bussey    (12    Me.  418), 

379. 
Gilpin  V.  Howell   (5  Barr.  41),  88. 
Gilpin  V.   Marley  (4  Houst    284), 

270. 
Gilson  V.  Hill  (4  Gray,  316),  310. 
Girami  v.  Cullen  (20  Gratt.   439), 

292. 
Gindrat  v.   Mechanics   Bk.  (7  Ala. 
324),  339. 


Gist  v.  Gaus  (30  Ark.  285),  185. 
Gist  V.  Lybrand  (3  Ohio,  307),  343, 

358. 
Giveus  V.  Merchants  Nat.   Bk.  (85 

111.  442),  2G1,  365. 
Glasgow  V.  Copeland   (8  Mo.  268), 

211. 
Glasgow  V.  Pratte  (8  Mo.  336),  335, 

344. 
Glasgow  V.  Sands  (3  Gill  &  J.  96), 

64. 
Glasscock  v.   Glasscock    (66    Mo. 

627),  175. 
Glasscock  v.   Rand    (14  Mo.  550), 

155. 
Glasscock  v.   Smith  (25  Ala.  474), 

109. 
Gleason  v.  Wright   (55  Miss.  247), 

249. 
Glencove  Mut.  Ins.  Co.  v.  Harrold 

(20  Barb.  298),  418. 
Gleudenning,  Ex    parte    (1    Buck, 

517),  424. 
Glenn   v.   Farmers  Bk.  (70   N.   C. 

191),  178. 
Glenn  u.  Smith    (2  Gill  &  J.    512), 

379,  380. 
Glickauf  v.  Kaufman    (73  111.  378), 

270. 
Glossup   V.  Jacob  (4  Camp.   227), 

220. 
Gloucester  Bk.  v.  Salem  Bk.    (17 

Mass.  43),  399,  400,  451,  466. 
Gloucester  Bk.   v.  Worcester    (10 

Pick.  525), 423. 
Glover  v.  Bobbins    (49  Ala.  219), 

394. 
Glyu  V.  Baker  (13 East,  510),  1,  473. 
Goddard  v.    Cox    (2    Stra.    1194), 

377. 
Goddard   v.  Lyman  (14  Pick.  268), 

262. 
Goddard    v.     Merchants    Bk.     (4 
Com.st.  147),  230,  373,  399,  400. 
871 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

GocUliu  v.  Crurap    (8  Leigh,  120), 

481. 
Goddin  v.  Shepley  (7  B.  Mon.  575), 

oOiJ. 
Godfrey  v.  Coulmau  (13  Moore  P. 

C.  11),  216. 
Goggerty  v.   Cuthbert    (2  B.  &  C. 

N.  R.  170),  273. 
Goldschmidt  v.  New  Orleaus  (5  La. 

Ann.  43G),  135,  138. 
Goldsinid  v.  Lewis  Coimty  (1  Barb. 

410),  290. 
Goldsmith  v.  Blanc  (1  Maule  &  Sel. 

554),  340. 
Golightly     V.      Reynolds      (Lofft. 

88),  1. 
Golladay  v.  Bank  of  Union  (2  Head, 

557),  355. 
Gorapertz  v.  Bartlett  (12  El.  &  B. 

854),  244. 
Gooch  V.  Bryant  (13  Me.  38(5),  393. 
Good  V.  Elliott  (3  T.  R.  693),  188. 
Good  V.  Martin  (95  U.  S.  90),  150, 

157,  269,  27C,  272,  273. 
Goodale    v.    Holdridge  (2  Johns. 

193),  186. 
Goodall  V.    Dolley    (1   T.  R.  712), 

110. 
Goodall    V.  Polhill  (1  C.  B.  233), 

228. 
Goodfellowr.  Laudis(36Mo,  168), 

77. 
Gooding  v.  Morgan  (37  Me.  619), 

379. 
Goodloe  V.  Godley  (13  Sraed.  &  M. 

227J,  317,318. 
Goodloe  V.  Taylor  (3  Hawks,  458), 


Goodman  v.  Eastman  (4  N.  H.  455), 

394. 
Goodman  v.  Harvey    (4   Ad.  &  El. 

870),  289,346,  374. 


Goodman  v.  Simonds  (19  Mo.  106), 

10,  (20  How.  343),  154,   168,  280, 

283,  2«9,  303. 
Goodnow    i\    Warren  (122    Mass. 

79),  336. 
Goodrich  v.  De  Forest  (15  Johns. 

6),  220. 
Goodrick??.  Gordon  (15  Johns.  6), 

226. 
Goodrick  v.   Tracy   (43  Vt.    314), 

379. 
Goodsell  V.  Meyers  (3  Wend.  479), 

48,  49,  50. 
Goodson    V.  Johnson    (35    Texas, 

62-2),  295. 
Goodwin  v.  Conklin  (85  N.  Y.  21), 

169. 
Goodwin    v.   Davenport    (47    Me. 

112),  250. 
Goodwin  r.  Jones   (3   Mass.  514), 

506. 
Goodwin  t\  McCay  (13   Ala.  271), 

227. 
Goodwin  v.    Roberts    (L.    R.     10 

Exch.  76),  473. 
Gordan    v.   Montgomery     (19   HI. 

110),  363. 
Gordon  v.    Boppe    (55  New  York, 

665),  158,  293,  304. 
Gordons.  Bulkley  (14  S.  &  R.  331), 

75. 
Gordon   v.    Price    (10   Ired.    385), 

379,  380. 
Gordon   r.  Sutherland  (Thompson 

on  Bills,  113),  394. 
Gordon   v.    Wansey  (21    Cal.    77), 

280,  295,  375,  37(;. 
Gore  V.  Buck  (1  Mont.  209),  310. 
Gore  V.  Gibson  (13  M.  &  W.  623), 


Gorer.  Wilson  (1  Bailey,  597),  172, 
(40  Ind.  206),  261. 


Goodman  r.   McGehee   (31  Texas,      Gorgier  r.  Melville  (3  B.  &  C.  45), 


252),  185. 
872 


473. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Gorman  V.   Ketchum  (3  Wis.  427), 

2576. 
Goshen  ».Turpin(9  Johns.  217),  24. 
Gough  V.  Fiudou  (7  Exch.  48),  34. 
Gould  V.  Norfolk  Lead  Co.  (9  Cush, 

338),  77. 
Gould  V.    Robson    (8  East,   57G), 

415. 
Gould  V.  Segee  (5  Duer,  260),  165, 

169,  280,  290. 
Gould  V.  Stevens  (43  Vt-  125),  291. 
Gould  V.  Town  of    Sterling   (23  N. 

Y.  458),  480,  481,  482. 
Goulding  v.   Davidson    (26  N.   Y. 

604),  162. 
Goulding,  Ex  parte  (2  G.  &  J.  118), 

98. 
Goupy  V.  Harden  (7   Taunt.    159), 

86,  215,  216. 
Gouslin    V.    Commander,    etc.    (6 

Rich.  497),  35. 
Gove  V.  Viniug  (7  Met.  212),  365. 
Gowan  v.  Johnson  (20  Johns.  176), 

215,  216,  336,  356. 
Gower  ??.  Howe  (20  Ind.  396),  305. 
Gower??.  Moore  (25  Me.  16),  313. 
Grace  v.  Hale  (2  Humph.  27),  48. 
Gracie  v.  Sanford  (9  Ark.  238),  210. 
Grady  v.  Am.  Cent.  Ins.  Co.  (60  Mo. 

116),  89. 
Grafton  Bk.  v.  Cox  (13  Gray,  505), 

314,  358,  359. 
Grafton    Bk.  v.  Woodward   (5  N. 

H.  99),  42. 
Graham  v.  Adams  (5  Ark.  261),  29. 
Graham  v.  Campbell  (56  Ga.  258), 

85. 
Graham  v.  Cox  (2  C.  &  K.  702),  455. 
Graham  v.  McGuire  (39  Ga.  531), 

259. 
Graham  v.  Newman  (21  Ala.  497), 

305. 
Graham  v.   Sangston   (1  Md.  59), 

327,  318,  340,  342,  346. 


Graham  v.  U.  S.  Savings  Inst.  (46 

Mo.  187),  77. 
Grand  Bk.  v.  Blanchard  (23  Pick. 

505),  318. 
Grand  Chute  v.  Winegar  (15  Wall. 

377),  482. 
Grand  Gulf  Bk.  v.  Wood  (12  Sm.  & 

M.  482),  247. 
Grand  Gulf  v.  Stanborough  (1  La. 

Ann.  261),  201. 
Grandin   v.   Leroy    (2  Paige,  509), 

295,  301. 
Grand  Lodge   of  Free   Masons  ». 

Waddill  (36  Ala.  313),  118. 
Granite  Bk.  v.  Ayres  (16  Pick.  392), 

314. 
Grant  v.  DaCosta  (3  M.  &  S.  351), 

31,  152. 
Grant  v.   Ellicott    (7  Wend.  227), 

158,  232,  301. 
Grant  v.  Hamilton  (3  M.  L.  100),  188. 
Grant  v.  Healy  (3  Sumn.  523),  410. 
Grants.  Hunt  (1  C.  B.  44),  221,  225. 
Grant  v.  Kidwell  (30  Mo.  455),  168, 

293,  304. 
Grant  v.  Shaw  (16  Mass.  344),  220, 

222,  223,  226. 
Grant  v.  Thompson  (4  Conn.  203), 

52. 
Grant  v.  Vaughan  (3  Burr.  1525), 

6,  243. 
Grant  v.  Welchman  (16  East,  207), 

198,  204. 
Grant  v.  Woods  (12  Gray,  220),  25. 
Grapengether  v.  FeJervary  (9  Iowa, 

163),  62. 
Graul  V.  Strutzel  (53  Iowa,  712),  77, 

310),  336. 
Graves  v.  American  Exch.  Bk.  (17 

N.  Y.  205),  259. 
Graves  v.  Kay  (3B.  &  Ad.  313}  269. 
Graves  v.  Shuman  (59  Ala.  406),  i&„. 
Gray  r.  Bk.  of  Kentucky  (29  Pa.  St. 

365),  301. 

873 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Gray  v.  Bell  (3  Rich.  71),  336. 
Gray  v.  Bowdeu  (23  Pick.  282),  23. 
Gray  v.  Brown   (22  Ala.  2G2),  424. 
Gray  v.  Cooper  (3  Doug.  65),  49, 

262. 
Gray  v.  Cox  (4  B.  &  C.  108),  203, 
Gray  r.  Donahoe  (4  Watts,  400),  29, 

257&. 
Gray  v.  FoTrler  (1  H.  Bl.  462),  196. 
Gray  v.  Miluer  (8  Taunt.  739),  15, 

219. 
Gray  v.  Wood  (2  Har.  &  J.  328), 

11. 
Gray  v.  Worden  (29  Up.  Can.  Q.  B. 

R.  585),  29. 
Greathead  v.  Walton  (40  Conn.  81), 

34c,  508. 
Greatlake  v.  Bro^vu  (2  Cranch  C.  C. 

541),  212,  313. 
Groat  West  Telegraph  Co.,  In  re 

(5  Bliss,  303),  302. 
Greele  v.   Parker    (5  Wend.  414), 

225,  226. 
Greeley  v.  Hunt  (21  Me.  455),  335, 

336. 
Greeley  v.  People  (60  111.  19),  481. 
Green  v.  Davies  (4  B.  &  C.  235),  17. 
Green  v.  Deakiu  (2  Stark.  347),  98. 
Green  v.  Drobillis  (1  Iowa,  552),  24. 
Green  v.  Farley  (20  Ala.  324),  339. 
Green  v.  Hart  (1  Johns.  680\  305. 
Green  v.  Jones  (7  Jones,  581),  157. 
Green  v.  Louthain   (49  Ind.  139), 

295,  321. 
Green  v.   Raymond    (9  Neb.  298), 

227,  315. 
Green  v.  Shepherd  (5  Allen,  589), 

157,  417. 
Green  v.   Skeel    (9   N.  Y.  S.  C.  (2 

Hun)  486),  87. 
Green  v.    Steer    (1  Q.  B.  (40  E.  C. 

L.  R.)  707),  256. 
Green  v.  Thornton  (4  Jones,  230), 

157. 

874 


Greeneaux    v.   Wheeler   (6  Texas, 

.-)15),  243,  300. 
Greenfield  Bank  v.  Crafts  (4  Allen, 

447),  288,  393. 
Greenfield  Sav.  Bk.  v.  Stowell  (123 

Mass.  196),  397. 
Greenfield's  Estate  (2  Harris,  496), 

285. 
Greening,   Ex  parte  (13  Ves.  206), 

248. 
Greening  v.  Patten   (51  Wis.  150), 

371. 
Greenough  v.  McClelland  (30  L.  J. 

Q.  B.  15),  422. 
Greenousih  v.   Smead    (3   Ohio  St. 

415),  212,  272. 
Greenslade  v.   Dower  (7   B.  &  C. 

635),  96. 
Greenwell  v.  Haydon  (78  Ky.  333), 

295. 
Greenwich   Bk.  v.  DeGroot  (14  N, 

Y.  S.  C.  213),  359. 
Greenwood  v.  liOwe    (7  La.  Ann. 

197),  172a. 
Greer  v.  Higgins  (8  Kan.  520),  299. 
Greer  v.  Powell  (1  Bush,  489),  251. 
Gregg  V.  George  (1 6  Kan.  546),  442. 
Gregg  V.  Union,  etc.,  Nat.  Bk.  (87 

Ind.  238),  296. 
Gregory  v.  Allen  (Mart.  &  Y.  74), 

363. 
Gregory  v.  Higgins  (10   Cal.  339), 

251. 
Gregory  v.   Leigh  (33  Texas,  813),. 

146. 
Gregory  v.  Paul  (15  Mass.  31),  61.  m 

Gregory  ».  Thomas  (20  Wend.  17),        M 

379. 
Gregory  v.  Walcup  (1  Comyns,  76), 

228. 
Gregory  v.  Wendall  (39  Mich.  337), 

189. 
Greiner  v.    Ulery  (20  Iowa,   266), 

118. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Grenaux  v..  Wheeler  (6  Texas,  515), 

154,  289,  300,  303. 
Griffin  v.  Goff  (12  Johns.  423),  315. 
Griffins.  Kemp  (46  Ind.  172), 442. 
Griffiths.  Cox  (1  Tenn.  210),  394. 
Griffith  V.  Osawkee  Township  (14 

Kan.  418),  481. 
Griffith  V.  Reed  (21  Wend.  502),  14, 

376. 
Griffith  V.    Sitgreaves  (90  Pa.  St. 

161),  287,423. 
Griffiths  V.  Kellogg    (39  Wis.  290), 

285. 
Griffiths  V.  Owen  (13  M.  &  W.  58), 

381. 
Griffiths  V.  PeiTy   (16  Wis.  231), 

164. 
Grimes  v.  Hillenbrand  (11  N.  Y.  S. 

C.  (4  Hun)  354),  178,  193. 
Grimes  v.   Piersol    (25  Ind.  246), 

266. 
Grimshawi;.  Bender  (6  Mass.  157), 

506. 
Grinman  v.  Walker  (9  Iowa,  42G), 

340. 
Grinnell  v.    Buchannan    (1    Daly, 

538),  89. 
Griswold  v.  Butler  (3  Conn.  227), 

52. 
Griswold  v.  Davis  (31  Vt.  390),  33, 

163. 
Griswold  v.  Waddington  (16  Johns. 

438),  66,  256. 
Grocers   Bk.  v.   Panfleld    (7  Hun, 

279),    166,    (69   N.  Y.  502),    168, 

169,  301,  303. 
Gross  y.  Nelson  (1  Burr.  226),  25. 
Grosvenor   v.  Stone   (8   Pick.  79), 

336,  355. 
Grosvenor  v.  F.  &  M.  Bk.  (13  Conn. 

104), 251. 
Grover  v.   Grover  (24  Pick.  261), 

247,  252. 
Groves  v.  Ruby  (24  Ind.  418),  258. 


Grudgeou  v.   Smith  (6  Ad.   &  El. 

499),  346. 
Grutacap  v.  Woulluise  (2  McLean, 

581),  28,  410. 
Guerry  v.   Prettyman  (6  Ga.  119), 

242. 
Guild  V.  Belcher  (119  Mass.  257), 

179,  201. 
Guild  V.  Butler    (127  Mass.  386), 

423. 
Guild  V.  Eager  (17  Mass.  615),  376. 
Guion  V.  Doherty  (43  Miss.  538), 

379. 
Gullett  V.  Hoy  (15  Mo.  399),  295. 
Gunning  v.  Royal    (59  Miss.   45), 

174. 
Gunson  v.  Mentz  (1  B.  &  C.  193), 

373. 
Gurney  v.  Behrend  (3  E.  &  B.  622), 

481,  491,  493. 
Gurney  v.  Woraersley  (4  E.  &  B. 

133),  244,  380. 
Gwinnell  v.  Herbert    (5  Ad.  &  E. 

(31  E.  C.  L.  R.)  436),  257a. 

H. 

Habersham    v.   Lehman     (63    Ga. 

383),  266. 
Hackettstown  v.  Swackhamer   (37 

N.  J.  L.  191),  133,134. 
Hackley  v.  Patrick  (3  Johns.  637), 

107. 
Hackney  v.  Jones  (3  Humph.  612), 

21,  2576. 
Haddeu  v.  Rodkey  (17  Kan.  429), 

247. 
Haddock  «.  Woods  (46  Iowa,  435), 

29. 
Hager  v.  Rice  (4  Col.  90),  85,  123, 

125. 
Hagey  v.  Hill  (75  Pa.  St.  108),  424. 
Haggard  v.   Conkwright  (7  Bush, 

16),  66. 

875 


TABLE    OF    CASES    CITED. 


Hague  V.   French    (3  Bos 

173),  346. 
Haight  r.   Brooks   (10  Ad.  &  El. 

309),  418. 
Haighrr.  Naylor  (6  Daly,  219),  85, 

87,  123. 
Halle  V.  Pierce  (32  Md.  327),  123. 
Ilaillc  V.  Smith  (1  Bos.  &  Pul.  504), 

491. 
Haine  v.   Torrant  (2  Hill    (S.  C.) 

400),  4G. 
Ilaiues  v.   Admr.    v.    Taunant   (2 

Hill  (S.  C.)  400),  48, 
Haines  v.   Dubois  (30  N.  J.  259), 

204,  345. 
Hale  V.  Burr   (12  Mass.  8C),  313, 

358. 
Hale  V.  Daniorth    (46   Wis.   554), 

261,  364. 
Hale  V.  Gerrish  (8  N.  H.  374), 50. 
Hale  V.  Houghton    (8   Mich.  458), 

481. 
Hale  V.   Milwaukee  Dock   Co.  (29 

Wis.  492),  499. 
Hale  V.  Eice  (124  Mass.  292),  162. 
Hale  V.  Wall  (22  Gratt.  424),  80. 
Halifax  v.  Lyle  (3  W.  H.  &  G.  446), 

230. 
Hall  V.  Allen  (37  Ind.  541),  243,  303. 
Hall  V.  Auburn  Turnpike   Co.  (27 

Cal.  255),  116,  123,  222. 
Hall  V.  Bradbury  (40  Conn.  32),  85. 
Hall  V.  Butterfield  (59  N.  H.  354), 

46. 
Hall  V.  Cockrell  (28  La.  507),  136. 
Hall  V.  Featherstone  (3  Hurl.  &  N. 

284),  303. 
Hall  V.  Franklin  (3   M.  &  W.  259), 

198. 
Hall  V.  Fuller  (5  B.  &  C.  750),  230, 

397. 
Hall  V.  Hale  (8  Conn.  336),  289. 
Hall  V.   Henderson   (84    111.   611), 
172a, 204. 
87() 


Beferences  are  to  Sections. 

&  Pul 


Hall  V.  Jones  (21  Md.  439),  47. 
Hall  V.  Krandall  (29  Cal.  567),  123. 
Hall  V.  McHenry  (19  Iowa,    621), 

394. 
Hall  V.  Mobile  &  M.  R.  R,  (58  Ala. 

10),  249. 
Hall  V.  Newcomb  (7  Hill,  410),  271, 

273,  310. 
Hall   V.   Phelps    (16  Johns.    451), 

33. 
Hall  V.  Shorter  (46  Ala.  453),  20. 
Hall  V.  Smith  (1  B.  &  C.  407),  103, 

426,  447. 
Hall  V.  Tafts  (18  Pick.  455),  17. 
Hall  V.  Wilson    (40   Conn.  87),  28, 

29,  109,  222,  280,  282,  292. 
Hallenbeck  v.  Haliu  (2  Neb.  377), 

481. 
Hallet  V.  Holmes    (18  Johns.  28), 

424. 
Halley  v.  Adams  (16  Vt.  206),  160. 
Halley  v.  Falconer   (32  Ala.  636), 

260. 
Halley  v.  Jackson  (48  Md.  254),  363. 
Halley  v.  Traester  (72  Mo.  73),  52, 

55. 
Halliday  v.   Martinett   (20   Johns. 
.    168),  348. 
Hallowell,  etc.,  Bk.  v.  Howard  (13 

Mass.  235),  464. 
Halsey  v.  De   Hart  (Coxe  (N.  J.) 

93),  242. 
Halstead  v.  Brown    (17  Ind.  202), 

424, 
Halstead  v.  Skelton    (5   Ad.  &  El. 

86),  227. 
Haly  V.  Brown  (5  Pa.  St,  178),  359. 
Ilaly  V.  Lane  (2  Atk.  181),  69,  259. 
Ilamberger  v.  Miller  (48  Md.  327), 

273. 
Hamburg    v.    Rungles    (2   Morris 

(Pa.)  148),  106. 
Hamer  v.  Moore  (8  Ohio   St.  239), 

252. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Hamilton  v.   Cutcliings    (58  Miss.  ;  Ilaumim    v.    Richardsou    (48  Vt. 

508),  259,  2G0. 
Hanover  u.  Doane  (12  Wall.  342), 

179. 
Hanrick  v.  Craven  (39  Ind.    241), 

148. 
Hanrick  v.  Farmers  (8  Port.  (Ala.) 

539),  408. 
Hansard  v.  Robinson    (7  B.  &   C. 

90;,  373,  45(5. 
Hausborough    v.    Gray    (3    Gratt. 

35(5),  232,  422. 
Hansom  v.  Vernon  (27  Iowa,  28), 

481. 
Harbeck  v.   Craft   (4  Duer,    122), 

442. 
Harbeck  v.  Vauderbilt    (20  N.  Y. 

398),  471. 
Harbert  v.  Dument  (3   Ind.    346), 

424. 
Harbison  u.  Bk.  of  Indiana  (28  Ind. 

133),  303. 
Hardie  v.  Mills  (20  Ark.  153),  247. 
Hardin  v.   Wright    (32   Mo.   452), 

159. 
Harding  v.   Waters    (6  Lea,  324), 

270. 
Harding  v.  Worraley  (8  Baxt.  578), 

377. 
Hard  man  v.  Bank  of  Middleton  (28 

Pa.  St.  440),  101. 
Hardy  v.  Chesapeake  Bk.  (51  Md. 

562), '400,  451. 
Hardy   v.  Merriweather  (14    Ired. 

203),   118. 
Hardy   v.  Norton  (66  Barb.   527), 

35,  283. 
Hardy  v.  Waters  (38  Me.  450),  49, 

262. 
Hardy  w.   White   (60  Ga.  455),  274. 
Hardy  v.    Van  Harlinger  (7    Ohio 

St.  208),  62. 
Hare  i\  Heuty  (30  L.  J.  C.  P.  302), 

443,  444. 

877 


92),  209. 
Hamilton  v.  Hooper  (46  Iowa,  51(») , 

394. 
Hamilton  v.   Marks    (52   Mo.  81), 

289. 
Hamilton  v.  New  Castle  R.  R.  Co. 

(9  Ind.  359),  115. 
Hamilton  v.  Prouty  (50  Wis.  592), 

424. 
Hamilton  v.  Scull's  Admr.  (25  Mo. 

165),  178, 193. 
Hamilton  v.  Seaman  (1  Ind.  185), 

107. 
Hamilton  v.  Summers  (12  B.  Mon. 

11),  98. 
Hamilton  v.  Vought   (34  N.  J.  L. 

190),  289,  300. 
Hamilton  v.  Watson   (12  CI.  &  F. 

109),  423. 
Hammond  v.  Barclay  (2  East,  227), 

220. 
Hamor  u.  Moore  (8  Ohio   St.  239), 

159. 
Hapgood  V.  Policy  (35  Vt.  649),  156, 

157. 
Hanaueru.  Doane  (12  Wall.  342), 

198,  299. 
Hance  v.  Miller   (21  111.  636),  266, 

421. 
Hancocks.  Byrne  (5  Dana,  513), 80. 
Hancock  Bk.  v.  Joy  (41  Me.  568), 

74,  262. 
Hand  v.  Armstrong  (18  Iowa,  324), 

412. 
Hands  v.  Slaney  (8  T.  R.  578),  46. 
Hanger  v.  Abbott  (6  Wall.  532),  66. 
Hankey  v.  Hunter  (Peake  Ad.  Cas. 

107),  377. 
Hanley  v.  Lang  (5  Port.  154),  152. 
Hannibal,  etc.,  R.  R.    Co.  v.  Mar- 

rion  Co.  (36  Mo.  295),  482. 
Hannon  v.    Sullivan    (3  Mo.   App. 

583),  312 


TAHLE    OF    CARES    CITED. 


Kcfereiices  are  to  Sections. 


Ilarger  v.   "Wilson  QV.)  Barb.  237), 

29o. 
Hargor  v.  Worrall  ((;•.»  New  York, 

370),  15-t,  303. 
Harkerr.  Aiulersou  (21  Weiul.  37"2), 

355,  442,  443. 
Harloy  v.  Thornton  (2  Hill  (S.  C) 

500),  244,  -iW. 
Ilarman  r.  Howe    (27  Gratt.  iw7), 

Harmon  v.  Halo  (1  Wash.  Ter.  423), 

422. 
Harner  V.  Dipple  (31  Ohio  St.  72), 

47,  48. 
Harper  v.  Butler  (2  Pet.  239),  508. 


Harris  r.  Robinson   (4    How.  330), 

348,  359. 
Harris  v.  Roof  (10  Barb.  4»!)),  187. 
Harrisljurg  B'k  v.  Meyer    ((J  Scrg. 

&  R.  537),  20;). 
Harri.sou  r.  Bailey  (00  Mass.  020), 

348. 
Harrison  r.    CourtlanU    (3    Barn. 

&  Ad.  37),  422. 
Harrison   r.  Crowdcr    (0  Sinetl.  & 

M.  404),  317. 
Harrisons.  Edward.s  (12  Vt.  015), 

506. 
Harrison   r.    McClellnud    (57    Ga. 

531),  140,  14.7,  170. 


Harper  v.  Calhoun  (7  How.  (Miss.)      Harrisons.  Robinson  (4  How.  33C), 

203),  120.  I       350. 

Harper  v.    Hampton  (1    Har.   &   J.      Harrison  v.  Ruscoe    (15  M.   &  W. 


687),  4,  500, 


231),  335,  345. 


Harper  v.  West  (1  Cr.  C.  C.  102),      Harrisons.  Shurburn  (36  Tex.  73), 


223. 


268. 


Harrel  r.  Bixler  (Walk.  170),  315.       Harri.sou  v.  Stacey  (0  Rob.    (La.) 


Harrimau  v.    Sanborn  (43    N.   H 

128),  20. 
Harrington  r.  Brown  (77  N.  Y.  72), 

150,  157 


15), 0,  506. 
Harrison  v.    Williamson    (2  Edw. 

Ch.  438),  56,  5c,  4.52. 
Harrod  u.  Myers  (21  Ark.  592),  47. 


Harrington  v.  Dorr    (3   Rob.  275),      Harsh  v.  Klepper  ^20  Ohio  St.  200), 


295,  363. 


302,  394. 


Harris    v.    Bradley  (7  Yerg.  310),  ,  Harshaw    v.  McKesson  (05  N.    C. 


158,  250,  499. 


088),  75. 


Harris    v.  Brooks  (21    Pick.  122),      Hart  v.    Alexander    (2    M.  &    W. 


423. 
Harris  V.  Clark  (3  Comst.  117),  5, 

56,  (2  Barb.  94)  100  (10  Ohio,  5), 

212.  2.52,  313. 
Harris  v.  Corastock    (3  N.   Y.  115, 

110),  5a,  209. 
Harris  v.  Lewis  (5  "W.  Va.  570),  25. 
Harris «.  Lumbridge  (83  N.  Y.  92),. 

189. 
Harris  v.  Memphis  B'k  (4  Humph. 

519),  342. 
Harris  v.  Nichols    (20    Ga.    414), 

300. 

878 


484),  100. 
Hart  V.  Boiler  (15  Serg.  &  R.  102), 

380. 
Hart  V.  Deamer  (0  Wend.  497),  52. 
Hart  r.  Eastman  (7  Minn.  74),  330. 
Hartr.  Hudson  (0  Duer,  304),  107. 
Hart  V.  Long    (1  Rob.    (La.)    83), 

363. 
Hart  V.  Mo.,  etc.,F.  &  M.  las.  Co. 

(21  Mo.  91),  116. 
Hart  ».  Prater  (1  Jur.  023),  46. 
Hart  I'.  Potter  (4  Duer,  458),  99. 
Hart  V.  Smith  (15  Ala.  807),  315. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


EsLTtv.  Stephens  (6  Q.  B.  937),  63, 

64. 
Hart  V.  Stickney  (41  Wis.  630),  297. 
Hartr.  Wills  (52  Iowa,  50),  506. 
Harter  v.  Johnson    (16  Intl.  271), 

174. 
Harter  v.    Kernochan    (103  U.  S. 

563),  482. 
Harter  v.   Moore    (5  Blackf.  367), 

424. 
Hartford  B'k   v.  Barry    (17  Mass. 

94),  120,  127,  311,  316. 
Hartford  B'k  v.  Stedman  (2  Conn. 

489),  311,  337,  339. 
Hartford  Fire  Ins.  Co.  v.  Wilcox 

(57  III.  180),  78a. 
Hartley  v.   Case  (1   C.  &  P.   556), 

337,  346. 
Hartley  v.   Wharton  (1  Ad.  &  El. 

93),  50. 
Hartley    v.    Wilkinson    (4    Camp. 

127),  41. 
Hartley's   Appeal    (3   Smith  (Pa.) 

212),  80. 
Hartman  V.  Shaffer  (71  Pa.  St.  312), 

159. 
Harvey  v.  Archibald  (1  Ey.  &  Moo. 

184),  511. 
Harvey  v.  Cane    (34  L.  T.  R.  64), 

11,  220. 
Harvey  v.  EfBnger  (35  Miss.  552), 

41a. 
Harvey  v.  Irvine  (11  Iowa,  82),  13, 

124. 
Harvey  v.  Kay  (9  B.  &  C.  364),  20. 
Harvey  v.  Martin    (1  Camp.  425), 

224. 
Harvey  v.  Smith  (55  111.  224),  397. 
Harvey  v.  Troupe  (23  Miss.  538), 

365. 
Harwood  u.  Johnson  (20  111.  367), 

157. 
Hascall  v.  Life  Ass.  of  America  (12 
N.  Y.  S   C.  (5  Hun)  152),  219. 


Hascall  v.  Whitmore  (19  Me.  102), 

295. 
Hasey  v.  White  Pigeon  Beet  Sugar 

Co.  (1  Doug.   (Mich.)   193),  128, 

140. 
Haskell  v.  Boardman  (8  Allen,  40), 

337,  362. 
Haskell  v.  Brown  (65  111.  29),  242. 
Haskell  V.  Champion  (30  Miss.  136), 

394. 
Haskell «.  Cornish  (13Cal.  45),  124. 
Haskell  v.  Jones  (86  Pa.  St.  173), 

300. 
Haskell   v.  Mitchell   (53  Me.  468), 

248. 
Haslett  V.  Ehrick  (1   Nott  &  McC. 

116),  337. 
Hassoullier  v.  Harkenck  (7  T.  R. 

733),  26. 
Hastings    v.    Dollarhide   (24  Cal. 

195),  47. 
Hastings  v.  Johnson  (2  Nev.  190), 

200. 
Hastings  v.  Pepper  (11  Pick.  43), 

492. 
Hatch  V.  Burroughs  (1  Woods,  439), 

178,  198,  280. 
Hatch  V.  Calvert  (15  W.  Va.  97), 

269. 
Hatch  V.  Douglass  (48  Conn.  116), 

189. 
Hatch  v.  Frays  (11  Ad  &  El.  702),  31. 
Hatch  V.  Searles  (2  Sm.  &  Gif.  147), 

283. 
Hatcher  ■;;.    Stalworth    (26    Miss. 

376),  223. 
Hatchett  v.  Baddeley  (2  W.  Black. 

1079),  61. 
Hatfield  v.  Griffith  (1  Lee  (Tenn.) 

301),  40,  41. 
Hatfield  v.  Phillips  (9  M.  &  W.  467), 

491. 
Hathwick  v.  Owen  (44  Miss.  803), 

17. 

879 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Hauertj.  Patterson  (84  Pa.  St.  27.^.). 

273. 
Haughton    v.    Ewbank    (4   Camp. 

188),  79. 
Havemeyer  v.  Iowa  Co.  (3  Wall. 

294),  481. 
Haven  v.  Grand  Junction  R.  R.  Co. 

(109  Mass.  88),  117,  471. 
Haven  v.   Hobbs    (1  Vt.  238),  85, 

174,  183. 
Havens  v.  Talbott   (11  Ind.  323), 

364. 
Havens  v.  Potts  (86  N.  C.  31),  242. 
Haverhill,  etc.,  Ins.  Co.  v.  Newhall 

(1  Allen,  130),  124. 
Haverin  v.  Douuell  (7  Smed.  &  M. 

244),  227,  371. 
Ha-wk  V.  Pratt  (78  N.  Y.  371),  174. 
Hawkes  v.  Hubback  (L.  R.  11  Eq. 

5),  62. 
Hawkes  v.  Phillips  (7  Gray,  284), 

157,  270,  417. 
HaTvkes  v.   Salter   (4   Bing.  715), 

337,  348. 
Hawkes  v.  Saunders  (Cowp.  289), 

162. 
Hawkey  v.  Borwick  (1  Young  &  J. 

376),  313,  314. 
Hawkey  v.  Foote  (19  Wend.  516), 

379. 
Hawkins  V.  Bone  (4  Post.  &F.  311), 

57. 
Hawkins  v.   Cardy   (1   Ld.  Rayra. 

160),  258. 
Hawkins  v.   Neal   (60  Miss.  256), 

158. 
Hawkins  v.  Watkins  (5  Ark.  481), 

29. 
Hawks  V.  Truesdale  (12  Allen,  564) , 

204. 
Hastings  v.  Loveriug  (2  Pick.  214), 

87. 
Hawley  v.  Sloo  (12  La.  Ann.  815), 

511. 

880 


Hawse  v.  Crowe  (1  R.  &.  M.  414), 

380. 
Haxtum  V.  Bishop  (3  Wend.  1),310. 
Hay  V.  Ayling  (16  Q.  B.  423),  178, 

180. 
Hay  V.  Goldsmidt  (2  J.  P.  Smith, 

79),  77. 
Haycock  v.  Rand  (5  Gush.  26),  164. 
Haydock  v.  Lynch   (2   Ld.   Raym. 

1563),  152. 
Haydock  v.  Stow  (40  N.  Y.  363),  77. 
Hayes  v.   Caulfleld   (5  Q.  B.  81), 

249,  256. 
Hayes  v.  Mathews    (63   Ind.  412), 

123. 
Hayes  v.  Ward  (4  Johns.  Ch.  123), 

424. 
Hayues  v.  Birks    (3  Bos.    and  P. 

599),  337. 
Haynes  v.  Slack  (32  Miss.  193),  47. 
Hays  V.  Crutcher  (54  Ind.  260),  123. 
Hays  V.  Green  (12  Cush.  282),  241. 
Hays  V.  N.  W.  Bk.  (9  Gratt.  127), 

334. 
Hays  V.  Stone  (7  Hill,  128),  380. 
Hays  V.  Warner  (2  Str.  933),  162. 
Hay  ward  v.   Barker   (52  Vt.  429), 

161. 
Hayward  v.  French  (12  Gray,  453), 

96.  * 

Hayward  v.  Hayward     (20    Pick. 

517),  64. 
Hayward  v.  Pilgrim  Soc.  (31  Pick. 

270),  115. 
Hazard  v.  White  (26  Ark.  174),  274, 

363,  365,  424. 
Ilazleton  v.  Union  Bk.  (32  Wis.  35), 

486. 
Headly  v.   Good   (24  Texas,  232), 

204. 
Headly  v.  Reed  (2  Cal.  322),  455. 
Healey  V.  Story  (3  Exch.  3),  124. 
Healy  v.  Gilman  (1  Bos.  235),  442, 

444,  455. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Healy  v.  Gorman  (3  Green  (N.  J.) 

328),  511. 
Heaps  V.  Dunham  (195  111.  583),  1 74. 
Heard  v.  Dubuque  Co.  Bk.  (8  Neb. 

"16),  26,  300,419. 
Heard  v.  Stanford  (3  P.  Wms.  409), 

60. 
Heartt  v.  Rhodes  (66  111.  351),  442, 

456. 
Heath,  Ex  parte  (2  Ves.  &  B.  240), 

355. 
Heath  v.  Nutter  (50  Me.  378),  77. 
Heath  v.   Sampson   (4    B.    &  Ad. 

172),  106. 
Heath  v.   Silvei-thorn  Mining  Co. 

(39  Wis.  146),  166. 
Heath  v.  Vancott  (9  Wis.  516), 271, 

272. 
Heaton  v.  Hulbert  (3   Scam.  489), 

419,421. 
Heaton  v.  Myers   (4   Col.  63,  627), 

42,  87,  123,202. 
Hedger  v.  Steavenson  (2  M.  &  W. 

799),  346. 
Hedley  v.  Bainbridge  (3  Q.  B.  (42 

E.  C.  L.  R.)  316),  97. 
HefEner  v.  Wenrick  (32  Pa.  St.  423) , 

393. 
Hefford  v.  Morton   (11  La.   117), 

415. 
HefEron  v.  Hanaford  (40  Mich.  405), 

98. 
Hefner  v.   Dawson   (63    111.   453), 

288,  398. 
Hefner  v.  Vandolah    (62   111.  483), 

288. 
Heiskell  v.  Fanners  Bk.    (89  Pa. 

St.  155),  491. 
Helfenstein's    Estate    (77  Pa,   St. 

328),  252. 
Helmeru.  Krolick  (13   Mich.  373), 

25. 
Helper  v.  Aldeu  (3  Minn.  332),  32, 

257&. 


56 


Hemmenway  v.  Stone  (7  Mass.  58), 

13,  394. 
Hemphill  v.  Bk.  of  Ala.  (6  Smedes 

&  M.  44),  283. 
Hemphill  v.    Hamilton     (11    Ark. 

425),   148. 
Henderson  v.  Benson  (8  Price,  288), 

178. 
Henderson  v.   Case  (31    La.   Ann. 

215),  295. 
Henderson  v.  Cummings  (44  Cal. 

325),  83. 
Henderson  v.  Fox  (5  Ind.  489),  48, 

259. 
Henderson  v.  Johnson  (6  Ga. — ), 

418. 
Henderson  v.  McGregor  (30  Wis. 

78),  52. 
Henderson  v.   Pope  (39  Ga.   361), 

434. 
Henderson    v.   Waggoner  (2  Lea, 

133),  198. 
Hendricks  v.  Judah  (1  Johns.  319), 

269. 
Hendricks  Ad'm.  v.    Thornton  (45 

Ala.  300),  17. 
Hendriev.  Berkowitz  (37  Cal.  113), 

292. 
Hendy  v.  Kier  (59  Cal.  138),  151. 
Henmau    v.    Dickinson    (5    Bing. 

183),  393. 
Henry  v.   Bishop    (2  Wend.    575), 

33. 
Henry  v.  Coleman  (5  Vt.  403),  41, 

41a. 
Henry  v.  Jones  (8  Mass.  453),  316. 
Henry   v.    Lee  (2   Chit.  124),  214, 

217,  317. 
Henry  p.  Ritenour  (31  Ired.  136), 

57,  294. 
Henry  v.  Thompson   (Minor,  209), 

412. 
Henschel  v.  Mahler  (3  Denio,  428), 

25. 

881 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Henshaw  v.  Dutton  (59  Mo.  139), 

204. 
Hepburn  v.  Griswold  (8  Wall.  604), 

375. 
Herbage  v.  McEntee  (40  Mich.  337), 

270. 
Herbert  v.  Servin  (41  N.  J.  L.  225), 

424. 
Herethr.  Meyer  (33  Ind.  511),  26. 
Hereth  v.  Merchant's  Nat.  Bk.  (34 

Ind.  380),  295,  300. 
Herrick  v.  Baldwin  (17  Minn.  209), 

358. 
Herrick  tj.  Bennett  (8  Johns.  374), 

24. 
Herrick  v.  Woolverton   (41  N.  Y. 

581),  296. 
Herring  V.  Woodhull  (29  111.  92), 

264. 
Hersey  v.  Elliott  (67  Me.  527),  65, 

247. 
Hertel  v.  Bogert  (9  Paige,  52),  148. 
Hestone    v.  "Williamson    (2  Bibb, 

83),  246,  257. 
Hetherington    v.   Hixon    (46    Ala. 

297),  58,  170. 
Hugh  V.  Jones    (32  Pa.    St.   432), 

62. 
Hewins   v.  Cargill    (67  Me.   554), 

394. 
Hewitt  V.  Goodrich  (2  C.  &  P.  468), 

424. 
Hewitt  V.  Kaye  (L.  R.  6  Eq.  198), 

159. 
Heylin  r.  Adamson  (2  Burr.  669), 

259. 
Heywood  v.  Perrin   (10  Pick.  228), 

41. 
Heywood  v.  Pickering   (9  L.  R.  Q. 

B.  428),  444. 
Heywood  v.  Stearns   (39  Cal.  58), 

295. 
Heywood  v.  Watson  (4  Bing.  496), 

170. 

882 


Ilibblewhite  v.  McMowrie  (0  Mees. 

&  W.  200),  35,  189. 
Hibernian    Bk.    v.    Everman    (52 

Miss.  500),  100,  295. 
Hickerson    v.   Raignell    (2  Heisk. 

329),  301. 
Hicks  V.  Gregory   (8   C.  B.   378), 

174, 183. 
Hicks  V.  Hinde   (9  Barb.  631),  85, 

(9  Barb.  528),  86. 
Hicks  V.  Randolph  (3  Baxter,  352), 

311,  423. 
Hidden  v.  Bishop  (5  R.  I.  29),  301. 
Hidden  v.  Waldo  (55  N.   Y.  294), 

230. 
Higgins  V.  B.  R.  &  Aw.  &   M.  Co. 

(27  Cal.  158),  375. 
Higgins  V.  Morrison  (4  Dana,  100), 

336. 
Higgins  V.  Senior  (8  M.  &  W.  834), 

87. 
Higgins  V.  Watson  (1  Mich.  428), 

273,  419. 
Highmore  v.  Primrose  (5  M.  &  S. 

65),  31. 
Highton  V.  Christoper  (11  Vroom, 

435),  299. 
Hightower  v.  Ivey  (2  Port.  (Ala.) 

308),  274. 
Hightower  v.  Maull  (50  Ala.  495), 

296. 
Hilborn  v.  Alford  (22  Cal.  482),  12. 
Hilborn    v.    Artus    (3    Scammon, 

344),  257,  257a. 
Hildeburn  v.  Turner   (6  How.  69), 

32 1;. 

Hill  V.  Allen  (37  Ind.  541),  310. 
Hill  V.  Barnes  (11  N.  H.  395),  393. 
Hill  V.  Buckminster  (5  Pick.  391), 

159,  170. 
Hill    V.  Calvin    (4  How.   (Miss.) 

231),  420. 
Hill  V.   Cooley   (46  Pa.  St.  259), 

394. 


I 


I 


TABLE    OF    CASES    CITED, 


References  are  to  Sections. 


Hill   V.  Day  (7  Stew.  Ch.  150),  52, 

80. 
Hill  V.  Ely  (5  Serg.  &  R.  363),  273. 
Hill  V.  Eudes  (19  111.  163),  204. 
Hill  r.  GaTV  (i  Barr.  493),  42. 
Hill  r.  Halford  (2  B.  &  P.  413),  25. 
Hill  V.    Heap  (Dow.   &   R.   N.   P. 

57),  210,  218,  3G4. 
Hill  r.  Heury  (17  Ohio,  1),  296,  310. 
Hill  V.  Kraft  (29  I^a.  St.  186),  251, 

269,  302. 
Hill  r.  Lewis  (1  Salk.  132),  21,  256, 

257a,  2576. 
Hillv.   Norris    (2  Stew.  &  P.  114), 

355. 
Hill  V.  Norvell  (3   McLeau,  833), 

316,  342. 
Hill  V.  Reed  (16  Barb.  280),  311. 
Hill  V.  Shields  (81  N.  C.  250),  295. 
Hill  V.  Sutherland  (1  Wash.  (Va.) 

128),  377. 
Hill  V.  Todd  (29  HI.  103),  28. 
Hill  V.  Varrell  (2  Greenleaf,  233), 

314,  342,  359. 
Hill  V.  Wilkes  (41  Ga.  449),  506. 
Hills  V.  Bannister  (8  Cow.  31),  145. 
Hills  V.  Place  (48   N.   Y.  520),  30, 

227,  310. 
Hilton  V.  Houghton  (35  Me.  143), 

34c. 
Hilton  V.  Shepherd    (6  East,  14), 

335,  354,  360. 
Himmelmau  v.   Hotaling    (40    Cal. 

Ill),  443,446. 
Hinckley  v.  Union  P.  R.  R.    (129 

Mass.  61),  295,  311,  473. 
Hindley  v.  Mareau  (3  Mason,  90), 

506. 
Hinds  V.  Chamberlain  (6  New  Ham. 

225),  183. 
Hine  v.  Alleby  (4  B.  &  Ad.  624),  213, 

313,  337. 
Hinely  v.  Margaritz  (3  Barr.  428), 
50. 


Hinesburg  v.  Sumner  (9  Vt.  23), 

183. 
Hinman  V.  Booth  (21  Wendall,  267), 

Sid. 
Hinsdale  v.  Bk.  of  Orange  (6  Wend. 

378),  366,  467. 
Hinton  v.  Scott  (Dudley  (Ga.)  245), 

201. 
Hisford  v.  Stone  (7  Neb.  380),  21. 
Hitchcock  V.  City  of  Galveston  (96 

U.  S.  341),  133. 
Hoagland  v.  Erck  (11  Neb.  580),  26. 
Hoare  v.  Cazenove  (16  East,  391), 

228,  310,  313. 
Hoare  v.  Graham  (3  Camp.  57),  42, 

227. 
Hobartsw.  Dodge  (1  Fairfax,  156), 

24. 
Hobson  V.  Davidson  (8  Mart.  (La.) 

431),  379. 
Hodges  Administrator  v.  First  Na- 
tional Bank  (21  Gratt.   59),  121, 
Hodges  V.  Black  (8  Mo.  App.  389), 

165. 
Hodges  V.  Eastman  (12  Vt.  358),  33. 
Hodges  V.  First  Nat.  Bk.  (22  Gratt. 

59),  121,  164, 
Hodges  V.  Gait  (8  Pick.  251),  342. 
Hodges   V.  Green  (28  Vt.  358),  81. 
Hodges   V.  Runyan   (30   Mo.  491), 

137. 
Hodges  V.  Saunders  (17  Pick.  470), 

241. 
Hodges  V.  Shuler  (22  N.  Y.  114),  29, 

345. 
Hodges  V.  Steward  (1  Salk.  125), 

21,  243,  257a. 
Hodgson  V.  Dexter  (1  Cranch,  345), 

136. 
Hodsworth  v.  Hunt  (lOB.  &C.  449), 

4. 
Hoffman  &  Co.  v.  Bk.  of  Milwaukee 
12  Wall.  181),  154,  155,  209  230, 
295. 

883 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Hoffman  v.  Foster  (43  Pa.  St.  137),      IloUantl  v.  Lonj?  (57  Ga.  36),  106. 


295. 
Hoffman  v.  Moore  (82  N.  C.  313), 

270. 
Hoffman  v.  Smith  (1  Caines,  157), 

355. 
Hogan  0.  Crawford  (31  Texas,  633), 

173. 
Hogan  V.  Moore  (48  Ga.  ISfJ),  287, 

295. 
Hoge  V.  Lansing  (35  N.  Y.    136), 

292. 
Hogg  V.  Skene  (34  L.  J.  C.  P.  (n. 

8.)  153),  99. 
Hogg  V.  Smith  (1  Taunt,  347),  77. 
Hogg  V.  Snaith  (1  Taunt.  347),  77. 
Hoguew.  Davis  (9  Gratt.  4),  261. 
Hoit  V.   Underhill  (10  N.  H.  220), 

50. 
Holbrook  v.  Basset  (5  Bosw.  147), 

118. 
Holbrook  v.  Camp  (38  Conn.  23), 

270. 
Holbrook  v.  Mix  (1  E.    D.  Smith, 

154),  289. 
Holbrook  v.  New  Jersey  Zinc  Co. 

(57  N.  Y.  616),  497. 
Holcomb    V.   Wyckoff   (6    Vroom, 

35),  293. 
Holdeu  V.  Bloxum  (35  Miss.  381), 

103. 
Holden  v.  Cosgrove  (12  Gray,  216), 

154. 
Holden r.  Trust  Co.  (100  U.  S.  72), 

412. 
Holdsworth  v.  Hunter  (10  B.  &  C. 

449),  4. 
Holeraan   v.    Hobson   (8    Humph. 

127).  154,  291. 
Holiord  v.  Wilson  (1  Taunt.  12), 

3G5. 
HoUaday  v.  Atkinson  (6  Barr.  &  C. 

501),  49,  159. 
Holland  v.  Barnes  (53  Ala.  83),  57. 
884 


Holland  v.  Turner  (10  Conn.  308), 

362. 
Holley  V.  Adams  (16  Vt.  206),  252. 
Holiday  v.  Atkinson   (5  B.   &  C. 

501),  154. 
Hollier  v.  Eyre  (9  CI.  &F.   1,  45), 

422. 
Hollingsworth  v.  City  of  Detroit  (3 

McLean,  4-72),  477. 
Holman  v.  Cregmiles  (14  Ind.  177), 

202. 
Holman  v.  Gilliam  (6  Rand.  39),  13. 
Holman V.  Hobson  (8  Humph.  127), 

293,  303. 
Holman  ».  Whiting  (19  Ala.  708), 

362. 
Holme  V.   Karsper  (5  Binn.  469), 

303. 
Holmes  w.  Crane  (2  Pick.  606),  40, 

493. 
Holmes  v.  Holmes  (28  Vt.  765),  64. 
Holmes  t?.  Hooper  (1  Bay,  160),  268. 
Holmes  v.  Jacques  (1  Q.  B.  376), 

17. 
Holmes  v.  Kerrison  (2  Taunt.  323), 

211. 
Holmes  v.   Kidd    (3  Hurlst.  &  N. 

891),  295. 
Holmes  v.  Sinclair  (19  111.  71),  13. 
Holmes  v.  Smyth  (16  Me.  117),  165, 

348. 
Holmes  v.  Trumper  (22  Mich.  427), 

397. 
Holmes  u.  Williams  (10  Paige,  326), 

178,  196. 
Holt  V.  Clarencieux  (2  Stra.  937), 

47. 
Holtz  V.  Boppe  (37  N.  Y.  634),  212, 

313. 
Homer  v.  Ashford  (3  Bing.   323), 

190. 
Homer  v.   Wallis  (11  Mass.  309), 

394. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Hood  V.  Hallenbeck  (7  Hun,  362), 

124. 
Hook  V.  Haskia  (14  Hun,  398),  174. 
Hookv.  Pratt  (78  N.  Y.  371),  152, 

183,  2G8. 
Hooker  u.  Gallagher  (6   Fla.  351), 

262. 
Hooker  v.  Knab  (26  Wis.  511),  162. 
Hooks  V.  Anderson  (58  Ala.  238), 

271,  310. 
Hooper  v.  Keay  (1  Q,  B.  Div.  178), 

377. 
Hoopers,  Williams  (2  Exch.  13), 

20. 
Hope  V.  Cust  (1  East,  53),  98. 
Hope  V.  Holdeu  (58  Me.  146),  204. 
Hopkins  w.lJBeebee  (2  Casey,  85), 

5a, 
Hopkins  v.   Crittenden  (10  Texas, 

189),  312. 
Hopkins  v.  Hawkeye  Ins.  Co.  ( — 

Iowa  (1881)  — ),  285. 
Hopkins  v.  Kent  (17  Md.  387),  269. 
Hopkins  v.   Mehaffy    (11    S.  &  R. 

129),  84,  123. 
Hopkins  v.  R.  R.   Co.  (3  Watts  & 

S.  410),  32. 
Hopkins    v.  Mollinieux   (4  Wend. 

465),  74. 
Hopkins  v.  Richardson   (9  Gratt. 

494),  417. 
Hopkins    V.    Seymour    (10  Texas, 

202),  243. 
Hopkirk  v.    Page    (2  Brock.    20), 

246,  257,  355. 
Hopper  V.  Eiland  (21  Ala.  714),  34. 
Hopson  V.  Boyd  (6  B.  Mon.  296), 

52. 
Hornblower  v.  Proud  (2   Barn,   & 

Aid.  327),  166,  172a. 
Horn  V.  Fuller  (6  N.  H.  511),  155, 

170. 
Home  V.  Planters  Bk.  (32  Ga.  1) , 

377. 


Home  V.  Redfearne   (4  Bing.  (N. 

C.)  433), 23. 
Homes  v.  Hale  (71  HI.  552),  285. 
Horst  V.  Wagner  (43  Iowa,  373), 

392. 
Horton  v.  Bayne  (52  Mo.  533),  300, 

303. 
Horton  v.  Garrison  (23  Barb.  176), 

124. 
Horton  v.   Townes  (6  Leigh,  59), 

77,  83. 
Hortonsman  v.  Henshaw  (11  How. 

177),  230,  399. 
Hosstater   v.  Wilson  (36  Barb.), 

29. 
Hotchkiss  V.    Mosher   (48   N.    Y. 

478),  23,  486. 
Hotchiu  V.    Sicor  (8   Mich.    494), 

380. 
Hough  V.  Barton  (20  Vt.  455),  366. 
Houghton  V.  Adams  (18  Barb.  545), 

466. 
Houghton  V.   Ely   (26    Wis.    181), 

270. 
Housatonic  Bk.  v.  Laflin  (5  Cush. 

546),  345,  346. 
House  V.  Adams   (48  Pa.  St.  261), 

211,  354,  354. 
Housego    V.   Cowne    (2    M.  &  W. 

348),  340,  344. 
Houston  V.  Banner  (39  Ind.  383), 

272. 
Houston  V.  Clay  Co.  (18  Ind.  396), 

136. 
Hovey  v.  Chase  (52  Me.  304),  62. 
Hovey  v.  Magill  (2  Conn.  680),  123. 
Hovey  v.  Hobson  (55  Me.  256),  52, 

53. 
Howard  Bk.  v.  Carson  (50  Md.  27), 

327. 
Howard  v.  Bowman  (17  Wis.  559), 

227,  310. 
Howard  v.  Central  Bk.   (3  Kelly, 

375),  410. 

885 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Howard   v.   Duncan    (3    Lansing, 

175),  398. 
Howard  v.  Jones  (10  Mo.  App.  81), 

157,  170. 
Howard  v.  Ives  (1  Hill,  263),  337. 
Howard  v.  McCall  (21  Gratt.  205), 

377. 
Howard  v.  Oakes  (3  Wels.  H.  &  G. 

13G),  63. 
Howard  v.  Palmer  (64  Me.  86),  21, 

176. 
Howard  v.  Shepherd    (19  L.  J.  C. 

B.  248),  491. 
Howe  V.  Bowes  (16  East,  112),  314. 
Howe  V.  Bradley  (19  Me.  35),  340, 

345,  346. 
Howe    V.   Hartness   (11    Ohio   St. 

449),  29,  251,  486. 
Howe  V.  Litchfield  (3  Allen,  443), 

193. 
Howe  V.  Merrill  (5  Gush.  83),  269, 

270,  273,  417. 
Howe  V.  Ould  (28  Gratt.  7),  34. 
Howe  V.  Wildes  (34  Me.  566),  59. 
Howe  Machine   Co.   v.   Reber    (66 

Ind.  408),  204. 
Howell  V.   Adams  (68   N.  Y.  314;, 

488. 
Howell  V.  Crane  (12  La.  Ann.  126), 

154,  295. 
Howell  V.  Wilson  (2  Blaclif.  418), 

244,  259,  508. 
Howry  v.  Eppinger  (34  Mich.  29), 

26. 
Howestein  v.  Barnes  (29  Am.  Rep. 

406),  28. 
Hoxie  V.  Lincoln  (25  Vt.  206),  47. 
Hoyt  V.    Casey,   (114  Mass.    397), 

46. 
Hoyt  v.  Macon  (2  Cal.  502),  179,  183. 
Hoyt  V.  Seeley  (18  Conn.  353),  440, 

441,  444,  445,  455. 
Hoyt  V.  Thompson  (19  N.  Y.  218), 

83,  (1  Seld.  320),  121. 
886 


Hubbard  v.  Bugbee   (55  Vt.  506), 

162. 
Hubbard  v.  Chapin  (2  Allen,  328), 

280,  293. 
Hubbard  v.  Gurney  (64  N.  Y.  457), 

261,  422. 
Hubbard  v.  Harrison  (38  Ind.  325), 

28. 
Hubbard  v.  Jackson  (4  Bing.  390), 

376. 
Hubbard  v.  Matthews  (54  N.  Y.  48), 

80,  313,  336. 
Hubbard  v.  Mosely  (11  Gray,  170), 

25. 
Hubbard  v.   Rankin    (71  111.  129), 

285. 
Hubbard  v.  Town  of  Lyndon  (28 

Wis.  674),  135. 
Hubbard  v.  Troy  (2  Ired.  134),  321. 
Hubbard  v.  Williams  (1  Minn.  54), 

251. 
Hubbell  V.   Flint   (13  Gray,   277), 

198,  377. 
Hubbert  v.  Borden  (6  Whart.  79),  87. 
Hubble  V.  Fogartie  (3  Rich.  413), 

31,  152. 
Hubly  V.  Brown  (16  Johns.  70),  415. 
Huber  v.  Steiner  (2  C.  &  M.  629), 

506. 
Hudson     V.     Matthews     (Morris 

(lowii)  94),  315. 
Huff  V.  Bournell  (48  Ga.  338),  46. 
Huff  V.  Wagner  (63  Barb.  215),  166, 

293. 
Huffaker  v.  Nat.  Bk.  (12  Bush,  293), 

326,  318. 
Hughes    V.   Kiddell    (2   Bay,  324), 

258. 
Hughes    V.   Large    (2   Barr.    103), 

295. 
Hugliest).  Nelson  (28  N.  J.  Eq.  549), 

65,  242,  247. 
Hughes  V.  Wheeler  (8  Cow.  77),  31, 

152. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Hulme  V.  Tenant  (1  Bro.  C.  C.  16),  I  Hunter  v.  Hempstead  (1  Mo.  67), 

266,  313. 
Hunter  v.   Hook    (64    Barb.  468), 

364. 
Hunter  v.  Ingraham  (1  Strob.  271), 

227. 
Hunter    v.    Jeffrey     (Peak's    Ad. 

Case),  19. 
Hunter  v.  Jett  (4  Rand.  107),  424. 
Hunter  v.  Miller  (6  B.  Mon.  612), 

85, 
Hunter  v.  Van  Bomhorst  fl   Md. 

604),  327. 
Hunter  v,   Wilson   (19  L.  J.  Exch. 

8),  154. 
Hunter  ».  Wood,  (54  Ala.  71),  310. 
Huntington  v.  Branch  Bk.   (3  Ala. 

186),  283. 
Huntington    v.    Harvey  (4   Conn. 

124),  2576. 
Huntington  v.  Knox  (7  Cush.  371), 


62. 
Humboldt  Township  v.  Long  (92  U. 

S.  642),  133. 
Hume  V.  Watt  (5  Kan.  34),  336. 
Humphrey  v.   Hitt  (6  Gratt.  509), 

424,  425. 
Humphreys    v.    Bicknell    (2  Litt. 

298),  442. 
Humphreys  v.  Chastain  (5  Ga.  166), 

108. 
Humphreys  v.  Clement  (44  HI.  299), 

375. 
Humphreys  v.   Guillow    (13  N.  H. 

385),  394. 
Humphreyville    v.   Culver   (73  111. 

485),  243. 
Hunt  V.  Adams  (5  Mass.  359),  12, 

422,  (44  N.  Y.  27),  506. 
Hunt  V.  Bell  (7  J.  B.  Moore,  212), 

188. 

Hunt  V.  Boyd  (2  La.  109),  379. 
Hunt  V.   Divine   (37  HI.  137),  29, 

488. 
Hunt  V.  Douglass  (22  Vt.  128),  89. 
Hunt  V.  Gray  (35  N.  J.  L.  227),  392. 
Huut  V.  Mann  (132  Mass.  53,  55), 

241. 
Hunt  V.  Massey   (5  Barn.  &  Aid. 

902),  48,  50. 
Hunt  V.  Maybee  (7N.  Y.  266),  313. 
Hunt  V.  Peake  (5  Cow.  475),  47. 
Hunt  V.  Sanford  (6  Yerg.  387),  289, 

291. 
Hunt  V.  Standart  (15  Ind.  33),  506, 

507,  508. 
Huut  V.  Wadleigh  (26  Me.  271),  310. 
Hunter,  Ex  parte   (2   Rose,    382), 

447. 
Hunter  v.  Blodgett  (2  Yates,  480), 

19. 
Hunter  v.  Cobb  (1  Bush,  239),  222, 

223. 
Hunter  v.  Field  (20  Ohio,  340),  156. 


Huntly  V.  Mathias  (90  N.  C.  101), 

77. 
Huntzinger  v.  Jones   (60  Pa.    St. 

170),  455. 
Hurd  V.  Hall  (12  Wis.  112),  244. 
Hurd  V.  Spencer  (40  Vt.  581),  424. 
Hurst  V.  Chambers  (12  Bush,  155), 

244. 
Husband  v.  Epling  (81  HI.' 172),  25. 
Huse  V.  Hamblin  (29  Iowa,  244), 

29,486. 
Hussey  v.  Crickell  (3  Camp.  168), 

188. 
Hussey  v.  Freeman  (10  Mass.  84), 

364. 
Hussey  v.  Jacob  (1  Ld.  Raym,  88), 

228. 
Hussey  V.  Sibley  (66  Me.  199),  244. 
Hussey  v.  Winslow  (59  Me.  170), 

23. 
Huston  V.  Young  (33  Me.  85),  10, 

316. 

887 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Olcutt    (4  Vt.  549), 


Hutchiugs 

370. 
Hutchius  V.  Hebbard  (34  N.  Y.  24), 

80. 
Hutchinsou  v.   Bogg   (27  Pa.    St. 

294),  303. 
Hutchiusou  V,  McCann  (7  Port.  99), 

292,  293. 
Hutchiusou    V.    Simon   (57    Miss. 

fi28),  258. 
Huyck  r.  Meador  (24  Ark.  192),  23. 
Hyde  v.  Frauklin  Co.  (27  Vt.  18G), 

135,  138,  139. 
Hyde  v.  Goodnow  (3  Comst.  266), 

506,  508. 
Hyde  v.   Page    (9  Barb.  151),  85, 

87. 
Hyde  v.  Price  (3Ves.  Jr.  443),  61. 
Hyer  v.  Hyatt  (3  Crauch  C.  C.  276), 

46,  47. 
Hyuson  v.  Noland   (14  Ark.  710), 

80. 
Hypes   V.  Griffin  (89   111.  134),  85, 

123. 
Hyslop  V.   Clark  (14  Johns.  465), 

179. 
Hyslop  V.  Jones    (3   McLean,  69), 

338. 

I. 

niiuois  Central  R.  R.   Co.  v.  Mc- 

Cullagh  (59  111.  170),  34d. 
Imeson,   Ex  parte  (2   Rose,  225), 

29. 
Indiana,  etc.,  Bank  v.  Colgate  (4 

Daly,  41),  491. 
Indiana,  etc.,  Bank  v.  Wackerly  (67 

Ind.  345),  285. 
Indiana,  etc.,   R.   R.  v.   Davis  (20 

Ind.  G),  128. 
Indig  V.  Nat.    City  Bk.    (80  N.  Y. 

101),  444. 
Ingalls  V.  Lee  (9  Barb.  947),  256, 

293. 

888 


Ingham   v.  Primrose  (7  C.  B.  (n. 

S.)  82  L.  J.  C.  B.  294),  282. 
Ingersoll  v.  Long   (4   Dev.   &  Bat. 

293),  608. 
Ingersoll    v.  Martin  (58   Md.  67), 

162. 
Ingraham  v.  Gibbs  (2  Dallas,  134), 

4. 
Ingram  v.  Morgan  (4  Humph.  66), 

165. 
Ingram  v.  Forster  (2  J.  P.  Smith, 

242),  217. 
Ingram  v.  Little  (14  Ga.  174),  35. 
Inhabitants  v.  Weir  (9   Ind.  224), 

135. 
Innes  v.  Munroe  (1  Exch.  473),  43. 
Inues   V.  Stephenson   (1    M.  &  R. 

145),  447. 
International  Bk.    v.   German    Bk. 

(3  Mo.  App.  362),  31,  486. 
International  Bank  v.  Franklin  Co. 

(65  Mo.  105),  139. 
Iowa  Co.  V.  Foster  (49  Iowa,  676), 

380. 
Ireland  v.  Kip  (10  Johns,  491),  340, 

343. 
Irish  V.  Cutter  (31  Me.  536),  273. 
Irish  r.  Nutting  (47  Barb.  370),  252. 
Irish  V.  Webster  (5  Greenleaf,  171), 

137. 
Irvine  v.  Maury  (1  Mo.  194),  6. 
Irvine  v.  Adams  (48  Wis.  468),  422. 
Irvine  v.  Irvine  (9  Wall.  617),  47. 
Irvine  t'.  Lowry  (14  Pet.  293),  29. 
Irvine  v.  Watson  (5  Q.  B.  D.  1 02) ,  87. 
Irving  Bk.  v.  Wetherald  (36  N.  Y. 

335),  221,  233,  438,  449,  451. 
Irving  Nat.  Bk.  v.  Alley  (79  N.  Y. 

536),  19. 
Irwin  V.  Brown    (2  Cranch  C.  C. 

314),  32. 
Isaac  V.  Daniel  (8  Ad.  &  El.  500), 

424. 
Iser  V.  Colieu  (57  Tenn.  421),  272. 


TABLE    OF    CASES    CITED. 


Keferences  are  to  Sections. 


Israel  t>.  Israel  (1  Camp.  499),  23. 
Ives  V.   Bosley  (35  Mel.   262),  270, 

272. 
Ives  V.  Farmer's  Bk.  (2  Allen,  236), 

35,  165,  168,  283. 
Ives  V.  Hulett  (12  Vt.  314),   136. 
Ivory    v.  Bank   of   State    (36   Mo. 

475),  434. 
Ivory  V.  Michael  (33  Mo.  400),  283, 

394. 

J. 

Jacks  V.  Darrin  (3  E.  D.   Smith, 

557),  445. 
Jacks  V.  Nichols  (5  Barb.  38),  511. 
Jackson  v.  First  Nat.  Bk.  (42  N.  J. 

L.  178),  301. 
Jackson    v.  Finney  (33  Ga.  512), 

174,  183. 
Jackson  v.   Gumoer   (2  Cow.  552), 

52. 
Jackson   v.  Henderson   (3  Leigh, 

197),  315. 
Jackson  v.  Hudson  (2  Camp.  447), 

15,  219,  228. 
Jackson  ■».  Larks(10Cush.550),63. 
Jackson   v.  Love    (82  N.   C.   405), 

303,312. 
Jackson  ?7.  Packer  (13  Conn.  342), 

310,  314. 
Jackson    v.   Pigot   (1  Lcl.    Raym> 

364),  220. 
Jackson  v.    Richards    (2  Cairnes, 

343),  336,  355. 
Jackson  v.  Sell  (11  Johns.  201),  15, 

17. 
Jackson  V.  Sheldon  (22  Me.  569), 

34d. 
Jackson  v.  Vicksburg,  etc.,  R.  R. 

(2  Woods  C.  C.  141),  476. 
Jackson  v.  Warwick  (7  T.  R.  121), 

201. 
Jackson  v.  Yendes  (7  Blackf.  526), 

419,  420. 


Jackson  v.  Y.  and  C.  R.  R.  Co.  (2 

Am.  Law  Reg.  (n.  s.)  585),  477. 
Jackson  Co.  v.  Hall  (55  111.  444) ,  479. 
Jacobs  V.  Adams  (1  Dall.  521),  310. 
Jacobs  V.  Benson  (29  Me.  132),  17. 
Jacobs  V.  Hart  (2  Stark.  45),  394. 
Jacobs  V.  Richards  (18  Beav.  300), 

52. 
Jacquin  v.  Warren  (40  111.  459),  23. 
Jaffray  v.  Brown   (74  N.  Y.  393), 

183,  271. 
Jaffray  v.  Crane  (50  Wis.  349),  424. 
Jaferay  v.  Dennis  (2  Wash.  C.  C. 

253),  511. 
Jaffrey  v.  Frebain  (5  Esp.  47),  51. 
Jagger  Iron  Co.  v.  Walker  (76  N. 

Y.  522),  379. 
James  v.   Catherwood  (2  Dow.  & 

R.  190),  510. 
James  v.   Johnson  (6  Johns.    Ch. 

423),  471. 
James  v.  Taylor  (43  Barb.  530),  61. 
James  v.  Wade  (21  La.  Ann.  548), 

354,  365. 
Jameson  v.  Swinton  (2  Camp.  373), 

335,337. 
Jane  v.  Gregory  (42  111.  416),  Sid. 
Jansen  v.  Thomas  (8  Doug.  421), 

315. 
January  v.  Goodman  (1  Dall.  208), 

33. 
Jaqua  v.  Montgomery  (33  Ind.  46), 

288. 
Jarvis  v.  Garnett  (39  Mo.  271),  314. 
Jai-vis  V.  St.    Croix  Man.  Co.   (23 

Me.  287),  341. 
Jarvis  v.  Wilkins  (7  M.  &  W.  410), 

23. 
Jarvis  v.  Wilson  (46  Conn,  90),  23, 

26,  209,  222,  230. 
Jefferson  Co.  Bk.  v.  Chapmaij  (19 

Johns. 322),  464. 
Jeffersonville  v.  Patterson  (26  Ind. 

16),  47.6,  476,  477. 

889 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Austin  (2   Statt.   674), 


Jeffries  v 

154,  201. 
Jeffries  v.  Lamb  (73  Ind,  202),  204. 
Jefts  V.  York  (.4  Cusli.  371),  84,  (10 

Cush.  392),  84,  123,  124. 
Jenkins  v.   Hutchinson   (13  Q.  B. 

744),  219,  228. 
Jenkins  u.  Jenkins  (12  Iowa,  195), 

47. 
Jenkins  v.  Reynolds    (3  Brod. '  & 

Bing.  14),  418. 
Jenkins  v.  Sliaub  (14  Wis.  1),  163. 
Jeuness  v.  Howard  (6  Blackf.  240), 

57. 
Jenness  v.  Cutler   (12   Kan.   500), 

424. 
Jennings  v.  Brown  (9  M.  &  W.  496), 

183,  174. 
Jennings  v.  Roberts  (24  L.  J.  Q.  B. 

102),  335. 
Jennings    v.    Tliomas     (21    Miss. 

617),  271,  272. 
Jenison  v.   Parker  (7   Mich.    355), 

304,  311. 
Jennison  v.  Stafford  (1  Cush.  168), 

166,  170. 
Jenys  v.  Fawler  (2  Stra.  946),  230. 
Jessup  V.  Steurer  (75  N.  Y.  613),  87. 
Jeune  v.  Ward  (3  Stark.  326),  262. 
Jewell  V.  Parr  (16  C.  B.  684),  158. 
Jewell   !?.   Wright    (30  N.  Y.  259), 

506,  509. 
Joest  V.  Williams  (42  Ind.  565),  57. 
John  V.  City  Nat.  Bk.  (62  Ala.  529), 

314,  338,  339,  340. 
John  V.    Farmers   Bk.    (2   Blackf. 

367),  118. 
John  V.   Selma  B'k  (57  Ala.   96), 

340. 
Johns  V.  Fritchey  (39  Md.  258),  57. 
Johnson   v.   B'k  of  Fullerton   (29 

Ga.  260),  321. 
Johnson  v.  B'k  of  U.  S.  (2  B.  Mon. 

310),  394. 
890 


Johnson  v.  Barney  (1  Iowa,  531), 

486,  489. 
Johnson  v.  Blakemore  (28  La.  Ann. 

140),  226. 
Johnson  v.  Berlizheimer    (84     III. 

54),  108. 
Johnson  v.  Blasdale  (1  Smedes  & 

M.  17),  283. 
Johnson  v.  Carpenter  (7  Minn.  183), 

249,  305. 
Jolinson  V.  Cleaves  (15  N.  H.  332), 

380. 
Johnson   ».  Collins   (1  East,  104), 

56,  220,  226. 
Johnson  v.  County  of  Stark  (24  IlL 

75),  473,  474,  475,  477. 
Johnson   v.   Crawford     (6  Blackf. 

377),  251. 
Johnson  v.  Crossland  (34  Ind.  344)^ 

28. 
Johnson  v.  First  Nat.    B'k  (13  N. 

Y.  S.  C.  (6  Hun)     124),  399,  451. 
Johnson  v.  Frisbie  (15  Mich.  286), 

28. 
Johnson  v.  Gilbert    (4  Hill,    178), 

244. 
Johnson  v.   Haith  (1  Bailey,  482), 

366. 
Johnson   v.  Heagan  (23   Me.  329), 

41,  394. 
•Johnson  v.    Henderson  (76   N.  C. 

227),  29. 
Johnson  v.   Johnson  (30  Ga.  887), 

377. 
Johnson  v.  Josey  (34  Tex.  533),  269. 
Johnson  v.  Kennion  (2  Wils.  262), 

361,  376. 
Johnson  v.  King  (20  Ala.  270),  13. 
Johnson    v.   Lane's  Trustees    (11 

Gratt.  553),  152. 
Johnson   v.  Lines    (6  Watts  &   S. 

80),  46. 
Johnson  v.   McCabe  (37  Ind.  535), 

203. 


TABLE    OF    CASES    CITED. 


Johnson  v.  McMurry  (72  Mo.  282;, 

178,  303. 
Johnson    v.   Medlicott  (3  P.  Wms. 

130),  57. 
Johnson  v.  Mitchell  (50  Tex.  212), 

257«,  266,  268,  310,  419. 
Johnson  v.'  Offeet  (4   Met.    (Ky.) 

19),  4. 
Johnson  v.  Ramsey  (42  N.  J.  L.  (14 

Vroom)  261),  272,  273. 
Johnson  School  Township  v.  Citi- 
zens Bank  (81  Ind.  515),  123. 
Johnson   v.  Smith  (21  Conn.   627), 

84,  123. 
Johnson  v.  Spear  (92  Pa,  St.  227), 

242. 
Johnson  v.   Stark  County   (24  111. 

90),  83,  476. 
Johnson  v.   Underhill    (52    N.   Y. 

203),  497. 
Johnson   ».  Vickers  (31   La.  Ann. 

943),  305. 
Johnson  v.  Way  (27  Ohio  St.  274), 

280,  289, 
Johnston  v.  Laflin  (103  U.  S.  800), 

497. 
Johnston  v.  Speer  (92  Pa.  St.  227), 
Joliet  Iron  Co.  v.  Scioto  F.  B.  Co. 

(82  111.  548),  304. 
Joliffe  V.  Albee  (70  111,  37),  273, 
Joliffe  V.  Ashforcl    (91   N.  C.  176), 

415, 
Jones  V.  B'k  of  Iowa  (34  111.  313), 

226, 
Jones  u,  Berryhill   (25  Iowa,  289), 

301, 
Jones  V.  Broadhurst  (9  C.  B.  173), 

376. 
Jones  V.  Brown  (11  Ohio  St.  601), 

296. 
Jones  V.   Carter  (4   Hen,   &   Munf . 

184),  85,  242. 
Jones  V.  Crostwaite  (17 Iowa,  393), 

424. 


References  are  to  Sections. 

Jones  V.  Darch[(4Price,  300),  49, 

230. 
Jones  V.  Davison  (Holt,  256),  178. 
Jones  V.  Deyer  (16  Ala.  221),  252. 
Jones  V,  Fales  (4  Mass.  245),  29, 

41,  41a,  2576,  315,  318,  348. 
Jones  V.  Fort  (9  B.  &   C.  764),  312, 

373. 
Jones  V.   Goodwin  (39  Cal.    493), 

270,  310. 
Jones  V.  Hataway  (77  Ind.  14),  203. 
Jones  V.   Heiliger  (36  Wis.    149), 

442, 
Jones  V.  Hibbert  (2  Stark.  204),  293. 
Jones  V.  Hook  (2  Rand.  303),  506, 
Jones  V.  Jones  (6  M.  &  W.  84),  162, 

205. 
Jones  V.  Kilgore    (2  Rich,  Eq.  64), 

377. 
Jones  V.  Lathrop  (44  Ga.  398),  86. 
Jones  V.  LeTombe  (3   Dall.   384), 

132,  136, 
Jones  V.  Lewis  (8  Watts  &  S.  14), 

343. 
Jones  V.  Middleton  (29  Iowa,  188),^ 

336, 
Jones  V.  Raditz  (27  Minn,  240),  28. 
Jones  V.  Ryde  (1  Marsh,  157),  244, 

466. 
Jones  V.    Savage    (6  Wend.  658), 

381. 
Jones  V.  Shaw  (67  Mo.  667),  34c?. 
Jones  V.    Shelby ville    Ins.  Co.  (1 

Met.  (Ky.)  58),  283. 
Jones  V.  Simpson  (2   B.  &  C.  318), 

28. 
Jones  V.  Strawhan  (4  Watts   &  S. 

2«1),  379. 
Jones   V.  Thorn    (2  Mart.  (n.  s.) 

463),  108,  262. 
Jones  V.   Witter    (13    Mass.  304), 

247,  249. 
Jordaine  v.   Lashbrooke  (7  T.   R. 

601),  3. 

891 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Jordan    v.    Jordan  (Dudley,   181),      Kearney  r.  w.    Granada  Min.  Co. 


201. 
Jordan  v.  Tarkiugton  (4  Dev.  357), 

230. 
Jordan  v.  Tate    (19  Ohio    (x.  s.) 

58(i),  25. 
Jordan  v.  Trice  ((j  Yerg.  479),  123. 
Jordan  v.  Wlieeler  (20  Texas,  698), 

215,  216. 
Joseph  Nat.  B'k   (17  Kan.  259),  35, 

283. 
Joslyn  V.  Collinson  (26  111.61),  157. 
Josselyn  v.  Lacier  (10  Mod.  294), 

26,  152. 
Joslyn  V.  Parlin  (54  Vt.  670),  241. 
Judah  V.  Harris  (19  Johns.  144), 29. 
Judd  V.  Smith  (10  N.  Y.  S.  C.  190), 

442. 
Judge  V.  Vogel  (38  Mich.  568),  305. 
Judkins  u.  Walker  (17  Me.  38),  47. 
Julian  V.  Shortbrooke  (2  Wills.  9), 

222,  227. 
Juniata  B'k  v.  Hale  (16  Serg.  &  R. 

167),  313,  335,  344. 
Jury  V.  Barker  (El.  B.  &  El.  459), 

31. 

K. 

Kahnweiler  v.  Anderson    (78  N.  C. 

137),  56. 
Kamm  v.  Holland  (2  Org.  59),  273, 

310. 
Kanaga  v.  Taylor  (7  Ohio  St.  134), 

506. 
Kasson  v.    Smith  (8   Wend.  437), 

299,  301. 
Kaufman  v.  Barringer  (70  La.  Ann. 

419),  223. 
Kay  V.  Allan  (9  Barr.  320),  420. 
Kay  V.      Duchesse    de  peinne    (3 

Camp.  123),  61. 
Kayserr.  Hull  (85  111.  513),  273. 
Kearney  v.  King  (18   E.  C.   L.  R. 

28),  3,  434. 

892 


(1  H.  &  N.  412),  4. 
Kearslake  v.  Morgan  (5  Q.  R.  513), 

381. 
Kearsley  v.  Cole  (16  M.  &  W.  127), 

424. 
Kedson  v.  Dilworth  (5'Price,  564), 

86. 
Keefe  v.  Volge  (36  Iowa,  87),  174. 
Keene  v.  Beard    (8   C.    B.  (n.  s.) 

380),  438,  440,  442. 
Keener  v.  Harrod  (2  Md.  63),  84. 
Keith  V.  Jones  (9  Johns.  120),  29. 
Keithsburg  v.  Frick    (34   111.  421), 

83,  482. 
Keller  v.  Hicks  (22  Cal.  460),  138, 

139. 
Keller  v.  Weeks  (22  Cal.  460),  135. 
Kelley  v.  Bronson  (26  Minn.  359), 

26. 
Kelley  v.  Brown  (4  Gray,  108),  441. 
Kelly  V.  Ford  (4  Iowa,  140),  303. 
Kelley  v.  Mayor  of    Brooklyn    (4 
Hill,    263),    133,    138,    139,    140, 
141. 
Kelley    v.    Hemmingway    (13    111. 

604),  25. 
Kelly  V.  Pember  (35  Vt.  183),  154. 
Kelley  v.  AVhitney  (45  Wis.  110), 

26,  249,  260,  289,  297,  300,  305. 
Kellogg  V.   Curtis    (69    Me.   212), 

154,  178,  289,  294,303. 
Kellogg    V.   Dunn    (1    Met.    (Ky.) 

215),  271,  272,  273. 
Kellogg  V.   Fancher  (23  Wis.  21), 

165,  303. 
Kellogg  V.  Schnaake  (56  Mo.  137), 

295. 
Kellogg  V.  Steiner  (29  Wis.  627), 

285. 
Kelmer  v.  Krollick  (36  Mich.  373), 

305. 
Kelso  r.  Frye  d  Bibb,  493),  42. 
Kelty  v.  Bank  (52  Barb.  328),  443. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Kemble  v.  Lull    (3   McLean,  272), 

227,230. 
Kemble  v.  Mills  (1  Mau.  &  G.  757), 

iU. 
Kemoorphy  v.  Sawyer  (125  Mass. 

29),  59. 
Kendall  v.  Galvin  (15  Me.  151),  24, 

31,  152. 
Kendall    v.    Laivrence     (22    Pick. 

540),  47. 
Kendall  V.  Robersou  (12  Gush.  15G), 

178. 
Kendrick  v.   Campbell    (1    Bailey, 

552),  226. 
Kendrick  v.  Crowell    (38  Me.  42), 

15(3. 
Kendrick  v.  Forney  (22  Gratt.-570), 

425,  426. 
Kendrick  v.  Lomax  (2  Cr.  &  J.  405), 

107,  379,  425. 
Kenuan  v.  Nash  (8  Minn.  409),  219. 
Keuuard  v.  Cass  Co.  (U.  S.  C.  C, 

3  Dillon  C.  C.  147),  478. 
Kennedy  v.  Galvin  (15  Me.    131), 

230. 
Kennedy  v.  Geddes  (8  Port.  263), 

222,  226,  337. 
Kennedy  v.  Knight   (21  Wis.  345), 

123. 
Kennedy  v.  Lancaster  (18  Pa.  St. 

347),  393. 
Kenner  v.   Creditors  (1   La.    120), 

220. 
Kennicott  v.  Supervisors  (10  Wall. 

452),  305,  480,  481,  482. 
Kennon  v.   McRae   (7  Port.  (Ala.) 

176),  348,  363. 
Kent  V.  Reynolds  (15  N.  Y.  S.  C.  (8 

Hun)  559),  376. 
Kent  V.  Warner  (12  Allen,  5G1),  348. 
Kenworthy  v.  Hopkins   (1  Johns. 

Cas,  107),  4. 
Kenworthy  v.  Sawyer   (125  Mass. 
28),  259,424. 


Kenyon  v.  Williams    (19  Ind.  45), 

86,  87. 
Kerharie  v.  Smith  (97  111.  150),  249. 
Kern  v.  Von  Phul    (7   Minn.  426), 

273,  274,  327. 
Kernau  v.  D.  &  M.  Bk.  (4  Vick.  R. 

279),  398. 
Kershaw  v.  Cox  (3  Esp.  246),  394. 
Kerwin,  Ex  parte  (8  Cow.  118),  35. 
Ketchum    v.    City    of    Buffalo    (4 
Kern.   356),  115,  (14  New  York, 
356),  133,  134,  480. 
Ketchum  v.  Clark   (7  Johns.  147), 

107, (6  Johns.  144),  106. 
Ketchum  v.  Duncan  (96  U.  S.  671), 

471. 
Key  V.  Flint  (8  Taunt.  21),  301. 
Key  V.  Knott  (9  Gill  &  J.  342),  203, 

464. 
Key  V.  Parnham  (6  Harr.  &  J.  418), 

124. 
Keyes   v.    Fenstermaker  (24    Cal. 
329),  24,  296.  , 

Keyes  v.  Winter  (54  Me.  400),  355. 
Keys  V.  Wood  (21  Vt.  331),  305. 
Kidder  v.  Blake  (45  N.  H.  530),  179. 
Kieffer  v.  Ehler    (18  Pa.  St.  388), 

251,  302. 
Kilgore  v.  Bulkley  (14  Conn.  362), 

256,  315,  316,  345,  346,  486. 
Kilgore  v.  Dempsey   (25   Ohio   St. 

413),  511. 
Kilgour  V.  Finlayson  (1  H.  Bl.  155), 

107. 
Kilkelly  v.  Martin    (1  H.  Bl.  155), 

77,  394. 
Killian  v.    Ashley    (24   Ark.   212), 

270,  (24  Ark.  511),  270,  310. 
Killough  V.  Alford  (32  Texas,  457), 

375. 
Kimball  v.  Bittner  (62  Pa.  St.  205), 

86. 
Kimball  v.  Bowen    (2   Wis.   224), 
327. 

893 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Kimball  w.  Cleveland  (4  Mich.  GOG), 

120. 
Kimball  v.  Huntington    (10  Wend. 

(>75),  23. 
Kimble  v.  Christian  (55   Ind.  140), 

285. 
Kimbro  v.  Bk.    of  Fulton  (49  Ga. 

418),  465. 
Kimbro   v.   Bullitt   (22  How.  25G), 

96,  100. 
Kimbro    v.  Lytle    (10  Yerg.   417), 

301. 
Kimm  v.   Weippert    (46  Mo.  532), 

62. 
Kincaidw.  Higgins    (1  Bibb,  396), 

25. 
Kinchloe  v.  Holmes  (7  B.  Mon.  5), 

420. 
Kine  v.   Beaumont    (3  Brod,  &  B. 

288),  348. 
King   V.    Baldwin    (2  Johns.   Ch. 

317),  424. 
King  V.  Buckley  (2  Q.  B.  419),  346, 

347. 
King  V.  Carnall  (26  Ark.  36),  185. 
Kingr.  Crowell  (61  Me.  244),  314, 

318,  337. 
King    V.   Doolittle    (1   Head,   77)^ 

165. 
King  V.  Ellor  (1  Leach  Cr.  L.  323), 

23. 
King  V.  Fleming  (72  HI.  21),  34c. 
King  V.  Gottschalk  (21  Iowa,  512), 

303. 
King  V.  Hoare  (13  M.  &  W.  494),  13. 
King  V.  Holmes  (11   Pa.  St.  456), 

314. 
King  V.  Houre  (13  M.  W.  565),  13. 
King  V.  Jamison   (66  Mo.  498),  48, 

50. 
King  V.  Lambton  (5  Price,  428),  34. 
King  V.  Eidge  (4  Price,  50),  292. 
King  V.  Ritchie  (18  Wis.  582),  270, 

271. 

894 


King  v.  Thorn  (1 T.  R.  489) ,  146, 148. 
Kingw.  Upton  (4   Me.  387),  175. 
Kingsberry  v.   Pettis  Co.    (48  Mo. 

207),  141. 
Kingsbury  v.  Butler  (4  Vt.  458),  24. 
Kiugslaud  v.    Pryer    (33  Ohio  St. 

19),  166,  304. 
Kingsley    v.    Robinson    (21   Pick. 

327), 355. 
Kingston   Bank  v.   Ettinge  (40  N. 

Y.  323),  399. 
Kinney  v.  Ford  (52  Barb.  194),  34a. 
Kinney  v.  Fliuu  (2  R.  I.  319),   17. 
Kinney  v.  Heald  (17  Ark.  397),  110. 
Kinney  v.  Kruse  (28  Wis.  190),  295, 

303. 
Kinsman    v.    Birdsall    (2    E.     D. 

Smith,  395),  156,  157. 
Kinyon  v.   Stanton  (44  Wis.  479), 

442,  444. 
Kinyon  v.  Wohlford  (17  Minn.  240), 

280,  282. 
Kirby  v.  Duke  of  Marlborough  (2 

Maule  &  S.  18),  377. 
Kirk  V.  Blurtou  (9  M.  &  W.  284), 

103. 
Kii'k  V.  Dodge  Co.  Mut.  Ins.  Co. 

(39  Wis.  138),  26. 
Kirk  V.    Strickwood  (4  B.    &  Ad. 

421),  183. 
Kirkmau  v.  Bk.of  America  (2  Cold. 

397),  34a. 
Kirkmau  v.  Benham  (28  Ala.  501), 

146. 
Kirkmau  v.   Boston    (67  HI.   599), 

204,  273. 
Kirkpatrick  v.  Bonsall  (72  Pa.  St. 

155),  189, 
Kirkpatrick  v.  Hawk  (80  111.  122), 

424. 
Kirkpatrick     v.     McCullough     (3 

Humph.  171),  29,  257b. 
Kirkpatrick  v.  Taylor  (43  111.  207), 

159. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Kirksey  v.   Bates  (7  Port.    (Ala.) 

529),  326,  376. 
Kirshuer  v.  Coiiklin  (40  Conu.  81), 

261. 
Kirtlaud  y.  Wauzer  (2  Duer,  278), 

321. 
Kitchen  v.  Bartsch    (7   East,  53), 

373. 
Kitchen   v.  Phice  (41    Barb.    465), 

397. 
Kittle  V.  De  Lamater  (3  Neb.  325), 

250,  295. 
Kittle  V.  Wilson  (7   Neb.  84),  424. 
Klauber  v.   Biggerstaff    (47    Wis. 

551),  29. 
Klein  w.  Boernstein  (32  Mo.  311), 

340. 
Klein  v.  Currier   (14  111.  237),  270, 

417. 
Klein  v.  Keys  (17  Mo.  326),  154. 
Klein    v.    Supervisors     (54    Miss. 

254),  139. 
Klockenbaum  v.   Pierson  (16  Cal. 

375),  345. 
Klosterman  v.  Loose  (58  Mo.  290), 

124.. 
Kuapp  V.  Mayor  of   Hoboken   (30 

New  Jersey  L.  394),  133,  134. 
Knapp  I'.  McBricle  (7  Ala.  19),  98. 
Knight  V.  Hunt  (5  Bing.  432),  193. 
Knight  V.   Jones    (21    Mich.   161), 

17. 
Knight.    V.    Pugh  (4    Watts  &    S. 

445),  154,  303. 
Knights  V.  Putnam  (3  Pick.  184), 

196,  292. 
Kniglit  y.  Reynolds  (37  Texas,  204), 

25. 
Knill  V.   Williams  (10  East,  413), 

394. 
Knisely  v.  Evans  (34  Ohio  St.  158), 

251. 
Knott  V.  Yenable  (42  Ala.  186),  215, 

2\6,  315,  342. 


Knowlton  v.  Bradley  (17  H.  H.  458), 

145. 
Knox  V.  Clifford  (38  Wis.  651),  34c, 

166. 
Knoxi'.Reedside  (1  Miles,  294),  227. 
Knox  V.  The  Nivella  (Crabbe,  534), 

48,  491. 
Knox  Co.    V.  Aspinwall  (21  How. 

544),  83,  481. 
Knoxville  N.  B.  v.  Clark  (51  Iowa, 

264),  397. 
Koch  V.  Howell  (6  Watts  &  S.  350), 

224. 
Kock  V.  Levy  (38  Mo.  147),  205. 
Kock  V.  Bringer  (19  La.  Ann.  183), 

338. 
Kohlen  v.  Smith  (2  Cal.  597),  412. 
Konig  V.  Bayard  (1  Pet.  250),  228, 

335. 
Koontz  V.  Central  Nat.  Bk.  (51  Mo. 

275),  400. 
Kop  V.  Shoutz  (51  Wis.  204),  41. 
Kortright  v.  Cady  (21  N.  Y.  261), 

305. 
Kost  V.  Bender  (25  Mich.  516),  155, 

295. 
Kountz  V.  Kennedy  (63  Pa.  St.  187), 

392. 
Kraker  v.  Byrum  (13  Rich.  163),  46. 
Kramer  v.  Sanford  (4  Watts  &  S. 

328),  362. 
Krumbaar  v.  Ludeling  (3  Mart.  (o. 

s.)  700),  86. 
Krumm  v.  Jefferson  Fire  Ins.  Co. 

(40  Ohio  St.  225),  89. 
Kunezi  v.  Elvers  (14  La.  Ann.  391), 

506,  507. 
Kuntz  V.  Tempel  (48  Mo.  71),  272, 

316. 
Kuph  V.  Weston  (3  Esp.  54),  341. 
Kurz  v.'Halbrook  ^13  Iowa,  562), 

295. 
Kyle  V.  Bostick  (10  Ala.  589),  424. 
Kyle  V.  Green  (14  Oliio,  495),  362. 
895 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Kyle  V.  Thompson  (2  Scam.  •132), 

312. 
Kyner  v.    Shonloi"    (1  Harr,  44G), 

271. 

L. 

Lackley  v.  Far-se  (15  Johns.  338),  66. 
Lacy  V.  Dubuque  Lumber  Co.  (43 

Iowa,  510),  124. 
Lacy  V.  Holbrook  (4  Ala.  88),  29. 
Ladd  V.  Baker  (6  Frost  (N.  H.)  76), 

13. 
Ladd  v.  Rogers  (11  Allen,  209),  19. 
Lafayette  Bk.  v.  St.  Louis  Stone- 

-vvare  Co.   (2  Mo.  App.  294),  116, 

473. 
Lafayette  Bk.    v.   Riugel   (51  lud. 

393),  29,  486. 
Lafeyette  Bk.  v.  State  Bk.  (4  Mc- 
Lean, 208),  120. 
Lafitte  v.  Slatter  (6  Bing.  C23),  355. 
Laflin  &  Raud  Powder  Co.  v.  Sins- 

heiraer    (48   Md.   411),   123,   125, 

l.")4,  222. 
Laing  r.  Barclay  (1  B.  &  C.  392),  26. 
Lake  v.  Ilaynes  (1  Atk.  281),  259. 
Lake  v.  Reed  (29  Iowa,  258),  289. 
Lake  v.  Stetson  (13  Gray,  310),  273. 
Lake  v.  Trustees  (4  Denio,  520), 

135,  141. 
Lake  v.  Tysfn  (6  N.  Y.  461),  l.-)3. 
Lalinas  v.  Wright  (11  Texas,  572), 

25. 
Lamar  v.  Brown  (56  Ala.  157),  393. 
Lamb  v.  Durant  (12  Mass.  54),  492. 
Lamb  v.  Rudd  (37  Iowa,  618),  301. 
Lamberts.  Ghiselin  (9  How.  552), 

347,  348,  359. 
Lambert  v.    Heatli    (15    M.  &  W. 

486),  244. 
Lambert  v.  Jones  (2   Patton   &  H. 

144),  56,  510. 
Lambert    v.  Sandford    (2    Blackf. 

137),  232. 

S96 


Laraon  v.  French  (25  Wis.  37),  227. 
Lamorieux  v.  Hewit  (5  Wend.  307), 

419. 
Lamothe  v.  Marine,   etc.,  Co.    (17 

Mo.  204),  80. 
Lampkiu  v.   Nye    (43   Miss.   241), 

315. 
Lampton  v.  Haggard  (3  Monr.  149), 

29. 
Lancaster y.  Dolan,  (1  Rawle,  231), 

62. 
Lancaster  Nat.  Bk.  v.  Taylor  (100 

Mass.  24),  248. 
Lancaster  Nat.   Bk.  v.  Woodward 

(18  Pa.  St.  357),  446,  455. 
Lancaster  Co.   Bk.  v.   Moore    (78 

Pa.  St.  407),  53. 
Lancy  v.  Clark  (04  N.  Y.  209),  371. 
Landrum  v.  Trowbridge    (2   Met. 

181),  210. 
Lane  v.    Bk.    of    West    Tenn.    (9 

Heisk.  419),  314,  348,  354. 
Lane  v.  Blizzard  (70  Ind.  23),  287. 
Lane   v.   Krekle    (22    Iowa,    404), 

19. 
Lane  v.  Stacey  (8  Allen,  41),  261. 
Lane  v.  Stewart  (20  Me.  98),  274, 

292,  293,  363. 
Lanfear  v.  Blossman    (1  La.  Ann. 

148),  289,  494. 
Lang??.  Gale  (1  Majile  &  S.    Ill), 

315. 
Lang  V.  Smyth  (7  Bing.  (20  E.   C. 

L.  R.)  284,  294),  4,  473. 
Lang  V.  Wliiddeu  (2  N.  H.  435),  52. 
Langdon  r.  Hulls  (5  Esp.  156),  348. 
Lange  v.  Kohne   (1  McCord,  115), 

29. 
Langenberger  v.  Kroeger  (48  Cal. 

147),  392. 
Langley    v.  Palmer    (30  Me.  467), 

314. 
Langston  ».  S.  C.   R.  R.  Co.     2  S. 

C.  249),  471,  473,  476,  477. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections* 


Langton  v.  Hughes  (1  M.  &  S.  593), 

198. 
Langton  v,   Lazarus   (5  M.  &  W. 

625),  230. 
Lansing  v.  Caines  (2  Johns.   300), 

34,.  106,  107. 
Lansing   v.  Gaiue  &  Ten  Eyck  (2 

Johns.  300),  109. 
Lanussa  v.  Massicot  (3  Mart.  (La.) 

361),  314. 
Lanusse  v.  Barker  (3  Wheat.  101), 

511. 
Lapeyre  v.  Wilks  (28  La.  Ann.  664), 

145. 
Laprice  v.  Bowman  (17  La.   152), 

289. 
Larned  v.  Burlington  (4  Wall.  276), 

482. 
Larne  v.   Gilkyson  (4  Pa.  St.  375), 

54. 
Lash  V.   Egerton  (13   Minn.  210), 

377. 
Latham   v,  Clark    (25   Ark.    574), 

185. 
Lathrop  v.  Amherst  Bank  (9  Met. 

489),  194. 
Latouche  v.  Latouche    (3  H.  &  C. 

576),  162. 
Langu.  Johnson  (4  Foster  (N.  H.), 

302),  151. 
Langenberger  v.  Kroeger   (48  Cal. 

147),  392. 
Laughlin  v.  Marshall  (19  111.  390), 

29,  486. 
Laughlin  v.  Wright    (63  Cal.  113), 

310. 
Lawrason    v.    Mason    (3    Cranch, 

492),  500. 
Lawrence  v.  American  Nat.  Bk.  (54 

N.  Y.  435),  400. 
Lawrence  v.  Bassett  (5  Allen,  140), 

506,  507. 
Lawrence  v.  Clark  (36  N.  Y.  128), 

168. 


57 


Lawrence  v.  Dobyns  (30  Mo.  196), 

30,  260,  310. 
Lawrence  v.  Dougherty    (5   Yerg. 

435),  29. 
Lawrence    v.  Fassell  (77     Pa.  St. 

460),  266. 
Lawrence   v.  Griswold    (30   Mich. 

410),  204. 
Lawrence    v.   Langley   (14    N.    H. 

70)  366. 
Lawrence  v.  Miller  (16  New  York, 

235),  359. 
Lawrence  v.  Ralston  (3  Bibb,  102), 

365. 
Lawrence  v.  Smith    (35  111.  440), 

442. 
Lawrence  v.     Stonington    Bk.    (6 

Conn.  521),  273. 
Lawrence  v.  Tucker  (7  Greenleaf, 

195),  299. 
Lawrence  v.  Willis  (75  N.  C.  471), 

52. 
Lawson  ».  Farmers  Bk.  (1  Ohio  St. 

206),  30,  301,  337. 
Lawson  v.   Lawson    (1   P.    Wms. 

411),  252. 
Lawson  v.  Love  joy  (8   Greenleaf, 

405),  48,  50. 
Lawson    v.    Sayder    (1    Md.    171), 

424. 
Lawson  v.  Townes    (2   Ala.   373), 

420. 
Lawson  v.  Weston    (4  Esp.   56), 

289. 
Lawton  v.  Howe  (14  Wis.  241),  244. 
Law's  Ex.  V.  Sutherland   (5  Gratt. 

357),   199. 
Laxtou  V.  Peat  (2  Camp.  185),  232. 
Lay  V.  Wissraan     (30  Iowa,  305), 

291,  293. 
Lazarus   v.  Cowie  (3  Q.  B.    (43  E. 

C.  L.  R.)  459),  295,  376. 
Lazarus  v.  Shearer  (2   Ala.   718) 

123. 

897 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Lazcll  r.  Lazcll   (12  Vt.  443),  3G6. 
Lazier  v.  Nevin  (3  Hagans  (W.  Va.) 

322),  381. 
Lazier    v.   Hovau    (55    Iowa,  75), 

310. 
Lea  V.  Branch  Bk.    (8  Port.  (Ala.) 

119),  266. 
LeatJ.  Cassen    (61   Ala.  312),  155, 

174. 
Leacli  V.  Blow  (8  Sm.  &   M.  221), 

124. 
Leach  v.  Buchanan    (4   Esp.  226), 

223,  230,  288,  398. 
Leach   v.  Hewitt    (4  Taunt.    731), 

357. 
Leach  v.  Lewis  (38  Ind.  155),  148. 
Leach  v.  Nichols  (55  111.  273),  285. 
Leadbetter  v.  Farrow   (5  M.  &  S. 

345),  86,  124. 
Lean  v.  Lozardi  (27  Mich.  424),  10. 
Leanv.  Schutz  (2  W.  Blaclv,  1195), 

61. 
Leary  v.   Miller   (61   N.   Y.    489), 

364. 
Leaugne  v.   Wasing     (85  Pa.   St. 

244),  379. 
Leavenworth,   etc.,   R.   R.    Co.  v. 

Conii'.    of     Douglass    Co.     (18 

Kan.  170),  482. 
Leavenworth     Co.    v.     Miller     (7 

Kan.  497),  481. 
Leavitt     v.    Conn.    Peat  Co.      (6 

Blatchf.  139),  121. 
Leavitt  v.  Putnam  (3  Comst.  494), 

266,  269,  336,  376. 
Leavitt  v.  Simes  (3  N.  H.  14),  318, 

348. 
Leaycraft  v.  Hedden    (3  Green  Ch. 

551),  62. 
Lebanon  Bli.  v.  Mangan  (28  Pa.  St. 

452),  486. 
Lebel  v.  Tuclier  (2  Q.  B.  87),  508. 
Le  Breton  v.  Pierce  (2  Allen,  14), 

1,  166. 

898 


Ledlie  v.  Vroomau  (41  Barb.  109), 

62. 
Ledwicli  v.  McKim  (53  N.  Y.  315), 

282,  284,  474. 
Lee  V.  Alexander  (9  B.  Mon.  25), 

392. 
Lee  V.  Baldwin  (10  Ga.  208),  304. 
Lee  V.  Chillicothe  Branch  Bli.   (1 

Bond,  387),  268. 
Lee  V.   Levi    (4  Barn.  &  C.  390), 

424. 
Lee  V.  Pile  (37  Ind.  107),  273,  274, 

293. 
Lee  V.  Selleck  (33  N.  Y.  615),  506, 

508. 
Lee  V.  Starbird  (55  Me.  491),  394. 
Lee  V.  Wheeler  (4  Ga.  541),  64. 
Lee  V.  White  (4   Stew.  &   P.  178), 

202. 
Lee  V.  Wilcocks  (5  Serg.  &  R.  48), 

410,  511. 
Leeds  v.  Lancashire  (2  Camp.  205), 

41,  41a. 
Leeds  v.  Vail  (15  Pa.  St.  185),  262. 
Leer  v.   Muggridge  (5  Taunt.  36), 

62. 
Le  Fevre  w.  Loyd  (5  Taunt.  749), 

86. 
Leftly  V.  Bailey  (4  T.  R.  170),  214. 
Leftly  V.  Mills  (4  T.  R.  170),  311, 

321,  322,  325,  315,337. 
Legg  V.  Legg  (9  Mass.  99),  63,  506. 
Legh  V.  Legh  (1  B.  &  P.  447),  241. 
Legge  V.   Thorpe   (12  East,    171), 

355. 
Leggett  V.  Jones  (10  Wis.  35),  28. 
Leggett  V.  Raymond  (6  Hill,  639), 

417. 
Legro  V.  Staples  (16  Me.   252),  28, 

242. 
Lehigh  Coal,   etc.,  Co.  v.  Mohr  (2 

Norris  (Pa.)  228),  80. 
Lehman  v.  Jones  (1  Watts  and  S. 

126),  358. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Leitch  V.  Wells  (48  N.  Y.  585),  302, 

407. 
Lelaud  v.  Farnham  (25  Vt.  553),  2G9 
Lelaud  v.  Parrott  (35   Iowa,  454) 

268. 
Lemon  v.  Dean  (2  Camp.  636),  33 
Lenheim  v.  Fay  (27  Mich.  70),  299 
Leuheim  v.  Wilmarding  (55  Pa.  St 

73),  168. 
Lennig  v.  Ralston  (23  Pa.  St.  139) 

506,  507. 
Lenox   v.  Leverett  (10  Mass.    1) 

337,  346. 
Lenox  v.  Prout    (8    Wheat.   520) 

424.. 
Lenox  v.  Roberts  (2   Wheat.  373) 

337. 
Lent  V.  Padeford  (10  Mass.  230) 

419. 
Leonard  v.  Duffin  (94  Pa   St.  218) 

170. 
Leonard  v.  Hudson  (12  La.  Ann 

840),  145. 
Leonard  v.  Leonard  ( 14  Pick.  280) 

374. 
Leonard  v.  Mason    (1  Wend.  522) 

222. 
Leonard  v.  Robbins  (13  Allen,  217) 

172nr. 
Leonard  v.  Sweetzer  (16  Ohio,  1) 

157. 
Leonard  v.  Vredenburgh  (8  Johns 

29),  157,  418. 
Leroux  v.   Brown  (12  C.  B.  801) 

506. 
LeRoy  v.  Beard  (8  How.  451),  506 
Lesler  V.  Rogers  (18  B.  Mon.  528) 

394. 
Leslie  v.  Hastings  (1  Moody  &  M 

119),  223. 
Leslie  v.  Merrill  (58  Ala.  322),  251 
Lester  v.  Fowler  (43  Ga.  190),  204 
Lester  v.   Garland    (15  Ves.  248) 

316. 


Lester  v.  Given  (8  Bush,  357),  446, 

452. 
Lett  V.  Morris  (4  Sim.  607),  5c. 
Levi  V.  Earle    (30  Ohio   St.   147), 

62. 
Levi  V.  Mundell  (1  Duv.  77),  270, 

272. 
Levis  V.  Young  (1  Met.  (Ky.)  199), 

11. 
Levy  y.  Bk.  U.  S.  (1  Bin.  27),  230, 

451. 
Levy  V.  Cadet  (17  Serg.  &  R.  126), 

110. 
Levy  V.  Gadsby    (3  Cranch,    180), 

292. 
Levy  V.  Peters  (9  Serg.  &  R.  125), 

442. 
Levy  V.  Pyne  (Car.  &  M.  453),  97. 
Lewins  v.  Brunette  (1  Lutw.  896), 

228. 
Lewis  V.  Banister  (16  Gray,  500), 

287. 
Lewisu.  Blakewell  (6  La.  Ann.  359), 

336. 
Lewis  V.  Brehme  (33  Me.  431),  86. 
Lewis  V.  Davidson  (29  Gratt.  226), 

379. 
Lewis  V.  Dunlap  (72  Mo.  178),  273, 

274. 
Lewis  V.   Gompertz    (6   M.   &  W. 

402),  346. 
Lewis  V.  Harvey  (18  Mo.  474),  272. 
Lewis  V.  Jones  (2  Jones  &  S.  64), 

167,  193. 
Lewis  V.  Kerr  (17  Iowa,  73),  80. 
Lewis  V.  Kramer  (3  Md.  265),  394. 
Lewis  V.  Lady  Parker  (4  Ad.  &  E. 

(31  E.  C.  L.  R.),  838),  269. 
Lewis  17.  Lee  (3  Bam.  &  C.  291),  61. 
Lewis  V.  Nicholson  (18  Q.  B.  503), 

84. 
Lewis  V.  Owen  (4  B.  &  Aid.  654), 

507. 
Lewis  V.  Pead  (1  Ves.  Jr.  19),  52. 
899 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Lewis  V.  Reilly  (1  Q.  B.  347),  100, 

262. 
Lewis  V.  Rogers  (2  Jones  &  S.  G4), 

167. 
Lewis  V.  Tipton  (10  Olaio  St.  88), 

25. 
Lewis  V.  Wilson  (5  Blackf .  369),  32. 
Lewiston  Falls  Bli.  v.  Leonard  (43 

Me.  144),  327,  342. 
Libby  v.  Pierce  (47  N.  H.  314),  336. 
Lickbarrow  v.  Mason  (2  T.  R.  63), 

481,  491,  492,  493. 
Lickinson  v.  Valpy  (10  B.  &  C.  128), 

115. 
Lieber  v.  Goodrich  (5  Cow'.  186),  29. 
Liggett  V.  Weed  (7  Kan.  273),  218. 
Lislit  V.  Kingsbury  (50  Mo.  331), 

336. 
Light  V.  Powers  (13  Kan.  96),  226. 
Lightbodyf.  Ontario  Bk.  (11  Wend. 

1),  244,  466. 
Liglitfoot  V.   Tenant  (1  Bos.  &  P. 

552),  190,  198. 
Lilley  v.  Miller  (2  Knott  &  McCord, 

257),  364,  443,  444. 
Limerock  Bank  v.  Mullet  (34  Me. 

547),  175. 
Limerock  F.  &  M.  L  Co.  v.   Hewitt 

(60  Me.  407),  28. 
Lincoln  v.  Bassett  (23  Pick.  154), 

424,  425, 
Lincoln  V.  Hinsey  (51  111.  437),  270, 

272. 
Lincoln u.  Iron. Co.  (103  U.  S.  412), 

480,  482. 
Lincoln  v.    Smith   (11   La.  (o.  s.) 

11),  86. 
Lincoln   &  Kennebec  Bk.  v.  Ham- 
matt  (9  Mass.  159),  318. 
Lindell  v.  Rokes  (60  Me.  249),  173. 
Lindenberger  v.    Beall   (6  Wheat. 

104),  337,  341,  348. 
Lindo  V.  Unsworth  (2  Camp.  602), 

337. 

900 


Lindsay  v.  Price    (33  Texas,  280), 

221,  258. 
Lindsey  v.   McClelland    (18    Wis. 

481),  29,  486,  489. 
Linders  v.  Bradwell  (5  C.  B.  583), 

74,  219,  262. 
Lindus  V.  Melrose  (3  H.  &  N.  177), 

124. 
Lingle  v.  Cook  (32  Gratt.  272),  377. 
Linkous  v.  Hale  (27   Gratt.  668), 

327. 
Linville  v.    Savage    (58   Mo.  248), 

305. 
Linville  v.   Welch   (29   Miss.  203), 

441. 
Litchfield  Bk.   v.  Peck  (29   Conn. 

384),  294, 
Littauer  v.  Goldman  (72  N.  Y.  506) 

244. 
Little  V.  Bailey  (87  111.  239),  124. 
Little  V.  Duncan    (9   Rich.  55),  48, 

50. 
Little  V.  Little  (13  Gray,  264),  52, 

(13  Pick,  426),  163. 
Little  V.  Nabb  (10  Mo.  3),  418. 
Little  V.  Phcenix  Bk,  (2  Hill,  425), 

29,  (7  Hill,  359),  242,  442, 
Little  V.  Slackford  (1  M.  &  M.  371), 

23. 
Little  V.  Thurston  (58  Me,  86),  204, 
Littledale    v.    Mayberry    (43    Me, 

264),  326. 
Littlefleld  v.  Hodge  (6  Mich.  326), 

26,  251, 
Littlefleld  v.  Spec  (2  B.  &  Ad,  811), 

59,  62,  162. 
Little  Rock  v.    State  Bk.  (3  Eng. 

(Ark.)  227),  135. 
Livermore  v.   Blood   (40   Mo.  48), 

295,  299. 
Livingston  v.  Gaussen  (21  La.  Ann. 

286),  146. 
Liverpool  Borough  Bk.  v.  Walker, 

(4  De  G.  &  J.  24),  146. 


I 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


LizarditJ.  Cohen  (3  Gill,  430),  507. 
Llewellyn  v.  Winckworth  (13  M.  & 

W.  598),  85. 
Lloyd  V.  Howard  (20  L.  J.  Q.  B.  (69 

E.  C.  L.  R.)  1),256. 
Lloyd  V.  Reach  (2  Conn.  175),  292, 

293. 
Lloyd  V.  Lee  (1  Strange,  94), 59,  62. 
Lloyd  V.  Oliver  (18  Q.  B.  (83  E.  C. 

L.  R.)  471),  8. 
Lloyd  V.  Sandilauds  (Gow.  13),  455. 
Lloyd  V.  Scott  (4  Pet.  205),  292. 
Loan  Assn.   v.   Topeka  (20  Wall. 

655),  481. 
Lobdell  V.  Baker  (4  Mete.  472),  244. 
Lobdell  V.  Niphler  (4  La.  295),  415. 
Lock  V.  Tulford  (52  111.  166),  295. 
Locke  V.  Huliug    (24  Texas,  311), 

324. 
Xockhart   v.   Hillinger   (2    Bradw. 

465),  188. 
Lockwood  V.  Comstock  (4  McLean, 

383),  107. 
Lockwood  V.  Crawford  (18  Conn. 

361),  216,  318,  336,  346. 
Lockwood  V.   Ewer  (2  Ark.   303), 

304. 
Lodge  V.    Spooner  (8   Gray,    166), 

410. 
Logan  V.  Attix  (7  Iowa,  77),  379. 
Logan  V.  Mason  (6  Watts  &  S.  9), 

377. 
Logan  V.   Plumer   (70  N.  C.  388), 

198. 
Logan  V.  Smith  (62  Mo.  455),  305. 
Lohman  V.  Crouch  (19  Gratt.  321), 

29b,  29c. 
Lomas  v.  Bradshaw  (9  C.  B.  620), 

205. 
Lomax  v.  Picot  (2  Rand.  260),  260. 
London,  etc.,  Bk.  v.  Groorae  (L.  R. 

8  Q.  B.  D.  288),  446. 
London  S.  C.  v.  Hagerstown  Sav. 

Bk.  (12  Casey,  498),  486. 


London  Sav.  Soc.  v,  Sav.  Bk.  (36 

Pa.  St.  498),  486. 
London  S.  W.  Bk.  v.  Wentworth 

(42  L.  T.  R.  188),  283. 
Longv.  Bailie  (2  Camp.  214),  366. 
Long  V.  Colburn  (11  Mass.  97),  85. 
Long  V.   Crawford    (18   Md.  320), 

269. 
Long -J/.  Hartwell  (5  Vroom,  116), 

75. 
Long  V.  Moor  (3  Esp.  155),  394. 
Long  V.  Sprull  (7  Jones  L.  96),  380. 
Long  V.  Story  (10  Mo.  636),  107. 
Longworth  v.  Conwell  (2  Blatchf. 

469),  80. 
Lonsdale  v.  Brown  (4  Wash.  C.  C. 

86,  153),  175,  312. 
Lonsdale  v.  LafeyetteBk.  (18  Ohio, 

142),  507. 
Loomis  V.  Fay  (24  Vt.  240),  424. 
Loomis  V.   Maury  (15   N.  Y.  S.  C. 

312),  300. 
Loomis  V.  Simpson  (13  Iowa,  532), 

89. 
Loomis  V.  Spencer  (2  Paige,  153), 

53. 
Lord  V.  Appleton  (15  Me.  579),  340. 
Lord  V.  Hall  (8  C.  B.  627),  89,  262. 
Lord  V.  Ocean  Bk.  (20  Pa.  St.  284), 

232,  301. 
Loring  v.  Gurney  (5  Pick.  15),  24. 
Loring  v.  Hailing  (15  Johns.  120), 

316. 
Loring  v.  Sleineman  (1  Met,  204), 

61. 
Loring  v.  Sumner    (23  Pick.   98), 

160. 
Losee    v.  Dunkin    (7  Johns.    70), 

296. 
Lott  V.  Dysart  (45  Ga.  355),  164. 
Louisiana  v.  Wood  (102  U.  S.  298), 

400,  479, 
Louisiana  Bk.   v.  Laveille  (28  La. 

Ann.  189),  437. 

901 


TABLE    OF    CASES    CITED, 


References  are  to  Sections. 


Louisiana    Ins.   Co.   v.   Sharaburg 

(7  Mart.  (n.  s.)  260),  358. 
Louisiana  State  Bk.  v.  Buliler  (22 

La.  Ann.  83),  355. 
Louisiana  State  BIj.  v.  Ellery  (1(J 

Mart  '(La.)  87),  33G. 
Louisiana  State  Bk.  v.  Gaennie  (21 

La.  Ann.  551),  163. 
Louisiana    State    Bk.    v.   Orleans 

Nav.  Co.  (3  La.  Ann.  295),  482. 
Louisiana   State  Bk.    v.  Rowell  (6 

Mart.  506),  343. 
Louisiana  State   Bk.   v.  U.  S.  Bk. 

(9  Mart.  (La.)  398),  464. 
Louisville  Man.  Co.  v.  Welsh  (10 

How.  476),  421, 
Lovejoy   v.  Citizens   Bk.    (23  Kan. 

331),  273. 
Lovejoy  v.  Lee  (35  Vt.  430)  464, 
Lovejoy  v.  Spafford  (93  U.  S.  430), 

20,  (93  U.  S.  440),  106. 
Lovejoy  v.  Whipple    (18  Vt.  379), 

346,  34c, 
Loveland  v.  Shepherd  (2  Hill,  139), 

416, 
Lowv,  Argrove  (30  Ga.  129),  394. 
Low  V.  Chifney  (1  Bing.  N.  C.  267), 

303. 
Low  V.  Treadwell  (12  Me.  441),  42. 
Lowe  V.  Beckwith  (14  B.  Mon.  184), 

420. 
Lowe  V.  Bliss  (24  111.  168),  28. 
Lowe  V.  Griffith  (1  Scott,  458),  46. 
Lowev.  Peers  (4  Burr.  2225),  191. 
Lowe  V.  Sinklear  (27  Mo.  308),  47. 
LoweU  ».  Boston  (HI  Mass.  454), 

481. 
Lowell  V.  HUl  (6  Car.  &P.  238),  23. 
Lowenthal,  Ex  parte  (L.  R.  9  Ch. 

.591),  346. 
Lowenstein  v.  Knoff   (2  Mo.  App. 

159),  31. 
Lowery   v.  Murrell  (2  Port.   280), 

880,  466. 

902 


Lowery   v.  Scott  (24  Wend.   858), 

342. 
Lowery  v.  Steward  (25  N.  Y.  241), 

5, 
Lowes  V,  Mazaredo  (1  Stark.  385), 

292, 
Lowndes    v.    Anderson    (13  East, 

130),  464. 
Lowndes  v.  Collins   (17  Ves.  27), 

310. 
Lowry  v.  Adams  (22  Vt.  166),  420. 
Lowry    v.    Murrell    (2   Port.  282), 

244. 
Lowry  v.  Steel  (27  Ind.  170),  363. 
Loyd  V.  McCaffrey  (46  Pa.  St.  410), 

5c,  452, 
Lozear  v.  Shields  (8  C.  E.  Green, 

509),  52. 
Lubbering  v.  Kohlbrecher  (22  Mo. 

598),  392. 
Lucas  V.  Ladew  (28  Mo.  342),  210, 

31.5. 
Lucas  V.  Pilney  (27  N.  J.  L.  221), 

118. 
Lucas   V.   Pitney    (2   Dutch,  221), 

115. 
Lucas    V.    San  Francisco    (7  Cal. 

469),  119. 
Luce  V.  Shaff  (70  Ind.  152),  11. 
Ludlow  V.  Van  Rensselaer  (IJohns. 

94),  510. 
Ludwig  V.  luglehart   (43  Md.  39), 

424. 
Ludwick  V.  Hutsinger  (5  Watts  &, 

Serg.  51),  412. 
Luff  V.  Pope  (5  Hill,  413),  209. 
Luke   V.  Fisher    (10    Cush.    271), 

172a. 
Lumden'sCase  (4Ch.  App.  31),  47. 
Luntv.  Adams  (17  Me.  230),  317. 
Lunt  V.  Silver   (5  Mo.   App.  186), 

394. 
Lumberman's    Bank    v.  Pratt    (51 

Me.  563),  108. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Luth  V.   Stewart  (fi  Vick.R.  383), 

394. 
Lynch   v.   Baxter  (4   Texas,   431), 

202. 
Lynch  v.  Dodge  (130   Mass  458), 

58. 
Lynch  v.  Goldsmith    (64  Ga.   42), 

274,  310,  486. 
Lynch  v.  Kennedy   (34  N.  Y.  151), 

288. 
Lynch  v.  Kirby  (65  Ga.  279),  146. 
Lynch  v.  Reynolds  (16  Johns.  41), 

423. 
Lynde  v.  Winnebago  Co.  (16  Wall. 

12),  480,  482. 
Lyon  V.  Ewing  (17  Wis.  70),  163, 

260. 
Lyon  V.  Holt  (5  M.  &  W.  543),  424. 
Lyon  V.  Marshall  (11  Barb.  248),  17. 
Lyons  V.  Holmes  (11  S.  C.  429),  12, 

33. 
Lyons  v.  Miller  (6  Gratt.  440),  85, 

244,  259,  399. 
Lysaght  v.  Bryant  (9  B.  (67  E.  C. 

L.  R.)  46),  256,  335. 

M. 

Macara  v.   Watson    (Thomson  on 

Bills,  114),  894. 
MacoTvn  v.  Atchafalaya  Bk.  (13  La. 

342),  327. 
Macgregor  v.   Rhodes   (6  El.  &  B. 

266),  399. 
McAuley  v.  Gordon    (63  Ga.  221), 

102,  394. 
Mc Arthur  v.  Bloom  (2  Duel,  151), 
.    61. 
McBean    v.    Morrison     (1     A.    K. 

Marsh.  545),  87. 
McBlair  v.  Gibbes  (17  How.  236), 

198. 
McBride  v.  Farmers  Bk.  (26  N.  Y. 

450),  163. 


McBrown  v.  Corp.  of  Lebanon  (31 

Ind.  268),  17. 
McCabe  v.  Raney  (32  Ind.  312),  288. 
McCall  V.  Taylor  (10  C.  B.  (n.  s.) 

30,  (34  L.J.  365),  11. 
McCampbell    v.     McCampbell     (2 

Lea,  661),  63. 
McCann  v.  Lewis  (9  Cal.  246),  303. 
McCarty  v.  Roots  (21  How.  432), 

261. 
McCaskey  v.    Sherman    (24   Conn. 

605),  165. 
McClane  v.   Fitch  (4B.  Mon.  600), 

324,  337. 
McClellan  v.  Parker  (27  Mo.  162),. 

87. 
McClellan    v.    Reynolds    (49    Mo. 

314),  123,  124. 
McClellan   v.  Robe    (93  Ind.  298), 

123. 
McClintock  v.    Cummings   (2  Mc- 
Lean, 98),  178,  287,  303. 
McClunyu.   Jackson  (6  Gratt.  96), 

379. 
McClure  v.   Township   of   Oxford 

(94  U.  S.  429),  474,  482. 
McComb    V.    Kittridge    (14    Ohio» 

348),  424. 
McComb   V.   Thompson    (2    Minn. 

139),  270. 
McComb   V.  Wright  (4  Johns.  CIt. 

659),  87. 
McComber    v.    Dunham  (8  Wend. 

550),  412. 
McConnell  v.  Hector  (3  Bos.  &  P. 

707),  66. 
McConnell     v.     Hodsan    (2   Gilra. 

640),  289. 
McConnell   v.    McConnell  (11    Vt, 

290),  252. 
McCord  V.  Crooker  (83  111.  556),  20a 
McCord  V.  Ford  (3  Mon.  166),  375. 
McCormack  v.  Trotter  (10  Serg.  «5; 

R.  94),  29. 

D03 


TABLK    OF    CASES    CITED. 


References  nrie  to  Sections, 


McCormick  v.  Littler  (83  111.  i:2), 

64. 
McCormick  v.  Molburg  (43  Iowa, 

5(J1),  285. 
McCoy  V.    Gilmove    (7  Ohio,  268), 

29c. 
McCoy  V.  Lockwood  (71  Intl.  310), 

283. 
McCoy  V.  Washington  Co.  (3  "Wall. 

Jr.  389),  4G3. 
McCrockcn  v.  San   Francisco    (1(5 

Cal.  591),  83. 
McCramer  v.  Thompson  (21  Iowa, 

2U),  39-1. 
McCrillis  v.  How  (2  N.  H.  348),  48. 
McCroan  v.   Pope  (17   Ala.    612), 

62. 
MTrummeu    r.    M'Crumraen    (17 

Mart.  (La.)  158),  339. 
McCuUis  V.  Bartlett  (8  N.  H.  569), 

54. 
McCulloch  V.    Hoffman  (17  N.    Y. 

S.  C.  (10  Hun)   133),  154. 
McCullough  V.  Cook  (34  Ind.  334), 

227,  310. 
McCullough  V.  Moss  (SDenio,  575), 

118,  119,  121. 
McCullough  r.  Talledega  Ins.  Co. 

(46  Ala.  376),  117. 
McCullough  V.  AYainwright  (14  Pa. 

St.  171),  15. 
McCune  v.  Belt  (25  Mo.  174),  261, 

345. 
McCutchen  v.  Rice  (56  Miss.  455), 

222,  224,  227. 
McDaniel  v.  Maun  (25  Texas,  101), 

145. 
McDonald  v.  Bailey  (14  Me.   101), 

363,  508. 
McDonald   v.    Egglestou     (26    \t. 

161),  35. 
McDonald  r.  Lee  (12  La.  435),  315. 
McDonald    i'.    Magruder    (3    Pet. 

470),  261. 

904 


McDonald   v.   Muscatine  Nat.  Bk. 

(27  Iowa,  319),  285. 
McDonnell    v.    Keller    (4    Caldw. 

258),  29. 
McDowall   V.    Goldsmith    (6    Md. 

319),  269. 
McDowell  V.  Millroy  (69  111.  498), 

202. 
McEldery     r.   Chapman    (2    Port. 

(Ala.)  33),  146. 
McElven   r.    Sloan    (56    Ga.    208), 

170. 
McElwee   v.  Collins   (4  Dev.  &  B. 

210),  292. 
McEvers  v.  Mason  (10  Johns.  207), 

224,  225,  226. 
McFarland    v.    Cutter    (1     Mont. 

383),  310. 
McFarland  v.    Pico   (8   Cal.  626), 

327,  317,  346. 
McFarlin  V.  Stinson  (56  Ga.  396), 

146. 
McGavock   v.    Puryear    (6  Coldw. 

34),  198. 
McGavock  v.  Whitfleld  (45   Mass. 

452),  145. 
McGee  v.  Larimore   (50  Mo.  425), 

137. 
McGee  v.  Connor  (1  Utah,  92),  270, 

310. 
McGee  v.    Riddlesgarber  (39   Mo. 

365),  247. 
McGill  V.  Burnet  (7  J.  J.   Marsh. 

640),  173. 
McGoon  V.  Shirk  (54  111.  408),  375. 
McGowen  v.  West  (7  Mo.  42),  23. 
McGrade  v.  Ger.  Sav.  Inst.  (4  Mo. 

App.  330),  441,  4.52. 
McGrath  r.  Clark  (.56  N.  Y.  36),  283, 

394,  397. 
McGrath  v.  Barnes    (13  S.  C.  328), 

162,  170. 
McGregor   v.    Gardner  (14    Iowa, 

326),  80. 


i 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


McGruder  v.   Bk.   of   Washington 

(9  Wheat.  198),  314,  358. 
McGuiuness  v.  Bligh  (11  R.  I.  94), 

179. 
McGuire  v.  BosTvorth  (1  La.  Ann. 

248),  270. 
McGuire  v.  Gadsby  (3  Call,  324), 

379. 
McHenry    v.  Duffield    (17   Blackf. 

41),  84,  124. 
McHenry    v.    Ridgely      (3   Scam. 

309),  2G2. 
McIIugh  V.   County  of   Schuylkill 

(7  P.  F.  Smith,  391),  398. 
Mclntire  v.  Oliver    (2  Hawks  (N. 

C.)209),  110. 
Mclntire    Preston     (10     111.     48), 

118. 
Mcintosh  V.  Haydon  (R.  &M.  362), 

259,  394. 
Mcintosh  w.  Lyttle  (26  Minn.  336), 

17,  431. 
Mclntyre  v.    Kennedy  (29   Pa.  St. 

448),  379. 
McKee  v.   Vernon  Co.  (3  Dill.   C. 

C.  210),  441,  475. 
McKenzie  v.  Downing  (25  Ga.  669), 

252. 
McKenzie  v.   Scott   (6  Bro.  P.  C. 

280),  86. 
McKesson  u.  Stanberry  (3  Ohio  St. 

156),  303. 
M'Kiunell  v.  Robinson  (3  M.  &W. 

434),  178,  198. 
McKinney  v.  Crawford    (8  Serg.  & 

R.  351),  310,  336. 
McKinney  v.  Whipple  (61  Me.  98), 

310. 
McKleroy  v.  Southern  Bk.  of  Ken- 
tucky (14  La.  Ann.  458),  399. 
McKuightu.  Knisley  (25  Ind.  336), 

165,251. 
McClain  v.  Davis  (77  Ind.  419),  52, 


McLaiu  r.  Lohr  (25  111.  507),  295. 
McLaren  v.  Hall  (26  Iowa,  298),  379. 
McLaren     v.    Watson's     Ex.    (19 

Wend.  559),  419. 
McLean  v.   Nichlen   (3  Vict.   Rep. 

107),  24,  296. 
McLemore  v.    Powell    (12  Wheat. 

554),  424. 
M'Lughau    V.   Bovai'd   (4    Watts, 

315),  379,  380. 
McMamis  v.  Bark  (5  L.  R.  Ex.  65) 

43. 
McMarcliey  v.  Robinson  (10  Ohio, 

496),  316. 
McMath  V.  Johnson  (41  Miss.  439), 

172. 
McMean  c.  Little    (3  Baxter,  332), 

14. 
McMicken  v.    Beauchamp    (2    La. 

(o.  s.) 290),  393. 
McMinn  v.  Freeman  (68  N.  C.  341), 

247. 
McMinn  v.  Richmonds  (6  Yerg.  9), 

48. 
McMurtie   v.  Jones  (3  Wash.  C.  C. 

206),  340. 
McMurtry  v.  Brown  (6   Neb,  368), 

75. 
McNair   v.    Gilbert  (3  Wend.  344), 

162. 
McNairy  v.  Bell  (1  Yerg.  502),  227, 

310. 
McNaught  V.   McClaughny    (42  N. 

Y.  22),  157. 
McNeal  v.  McCamley  (6  Tex.  163), 

379. 
McNeal  u.  Wyatt  (3    Humph.    125), 

336. 
McNeil   r.  Tenth    Nat.    B'k  (46  N. 

Y.  325),  497. 
M'Neilage  v.  Holloway  (1  Barn.  & 

Aid.  218),  63. 
M'Neilly   v.   Patchin   (23  Mo.  40), 

426. 

1»05 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


McXiuch  V.  Ramsey  (G6  N.  C.  229), 

25. 
McHae  v.  Rhodes  (22  Ark.  315),  355. 
McSlierry  v.  Brooks    (4C  Md.  103), 

204,  269. 
McSparrau   v.    Neely    (91   Pa.     St. 

315),  11,  57,289. 
McVey  v.  Bloodgood  (9  Port.  547), 

305. 
McVeigh   v.  Alleu    (29  Gratt.  59G), 

342. 
McVeigh  v.  Bauk  of  Old  Dominion 

(26  Gratt.  785),  66,  348,  354,  355. 
McVeigh  v.     Cantrell     (70     New 

York,  295),  62. 
McWilliams   v.    Willis    (1   Wash. 

(Va.)   199),  87. 
Machias   Hotel   v.   Coyle    (35    Me. 

405),  88. 
Maclcay    v.    Holland  (4    Met.    69), 

288. 
Maclae  v.   Sutherland   (3  L.  &  B. 

36),  102,  103. 
Macleod  v.    Snee  (2  Strange,  762), 

26,31,  (Ld.  Raym.  1481),   152. 
Macliu  V.   Critcher   (6  Bush,   401), 

104. 
Macungie  S.  B.  v.  Hatterstein  (89 

Pa.  328),  196,   199. 
Maddox   v.  Graham  (2  Met.  (Ky.) 

56),  47 r. 
Maddur   v.    Bevan    (39   Md.    485), 

375. 
Maddyv.  Sulphur  Springs  T.  P.  K. 

Co.  (57  Ind.  148),  203. 
Madison,    etc.,  Plankroad   Co.    v. 

Watertowu  Plank  Road  Co.    (7 

Wis.  59),  116,  118, 


Magill  u.  Merrie  (5   B.  Mon.   168), 

94. 
Magoun  v.  Walker    (49  Me.    420), 

327. 
Magruder  v.  Union  B'k  (3  Peter- 
son, 87),  310,  313,  366. 
Magwood   V.  Johnson   (1  Hill   Ch. 

228),  62. 
Mahaiwe  B'k  v.  Douglas  (31  Conn. 

170),  394. 
Maher  v.    Naufrou   (86    HI.    513), 

175. 
Maher  V.  Overton    (9  La.  115),  124. 
Mahier  v.    LeBlanc   (12    La.  Ann. 

207),  316. 
Mahone  v.  Central  B'k  (17  Ga.  Ill), 

35,  283. 
Mahoney  Mining  Co.  v.  Anglo-Cal- 
ifornia B'k  (104  United   States, 

192),  115,  447. 
Mahorneru.  Hooe  (9  Sm.  &M.  247), 

506. 
Maiden  v.   Webster  (30  Ind.  317), 

13. 
Maier    v.    Canovan  (57    How.  Pr. 

504),  380. 
Maillard  r.  Dukeof  Argyle  (6  Man. 

&  G.  40),  380. 
Main  v.  Hilton  (54  Cal.  110),  20. 
Maine  Mutual  Co.  v.  Blunt  (64  Me. 

95),  170. 
Mainer  v.  Spurlock  (9  Rob.  (La.) 

161),  346. 
Maitland  v.   Citizens  Nat.  Bk.   (40 

Md.  540),  168,  289,  304. 
Major    V.  Lansley  (2  Russ.   &  My. 

357),  62. 
Major  r.  Symraes  (19  Ind.  117),  62. 


Madison,  etc.,  R.  R.  Co.  iJ.  Norwich      Makepeace  v.  Harvard  College  (10 


Sav.  Soc'y  (24  Ind.  457),  116. 


Pick.  303),  41rt. 


Ma<^ee    v.    Atkinson    (2    M.  &  W.      Makepeace  v.  Moore  (10  111.474), 


440),  85. 


148. 


Ma^ee  v.   Badger  (34  N.  Y.  247),  I  Malbon  v.   Southard  (36  Me.  147), 


154,  289,  303. 
906 


148,  262. 


TABLE    OF   CASES    CITED. 


Malbon  v.   Southard  (36  Me.  147), 

148,  262. 
Malcorason  v.  Malcomson  (1  L.  R. 

Ireland,  228),  219. 
Maiden  Bk.  v.  Baldwin   (13  Gray, 

154),  314. 
Mallet  V.  Thompson  (5  Esp.  178), 

232. 
Mammon  v.Hartman  (51  Mo.  169), 

270,  272. 
Manchester  Bk.  v.  Fellows  (8  Fos. 

302),  337,  338,  339. 
Manchet  v.  Ca'son  (1   Brew.  307), 

392,  394. 
Mandeville  v.  Union  Bk.  (9  Oraneh, 

9),  22. 
Mandeville    v.    Welch    (5    Wheat. 

277),  5a,  5b,  152,  209. 
Manhattan    Ins.   Co.   v.   Warwick 

(20  Gratt.  614),  80. 
Maniort  v.  Roberts  (4  E.  D.  Smith, 

83),  243. 
Manley  v.  Boycott  (2  El.  &Bla.  4G), 

273,  422. 
Manley  v.  Geagen  (105  Mass.  445), 

222. 
Mann  v.  King  (6  Munf.  428),  75. 
Maun  V.  Sutton  (4  Rand.  253),  32. 
Manney    v.   Coit   (83   N.   C.   300), 

363. 
Manning  v.  Hayes  (6  Md.  5),  98. 
Manning  v.   McClure  (36  111.  490), 

165,  166,  167. 
Manrew  v.  Durham  (3  Hill,  584), 

417. 
Mansfield  v.  Corbin  (2  Gush.  151), 

170. 
Mansfield  v.  Watson  (2  Iowa,  111), 

57. 
Mans  V.  Worthing  (3  111.  26),  35. 
Manuf .  Nat.  Bk.  v.  Barnes  (65  111. 

69),  80. 
Manuf.  Nat.  Bk.  v.  Follett  (11  R.  I. 

42),  310.     ■ 


References  are  to  Sections. 

Manuf.,   etc.,    Bk.    v.  Winship  (5- 

Pick.  11),  104, 
March  v  Ward  (Peake's  Rep.  130), 

13. 
Marcy  v.  Township  of  Oswego  (92 

U.  S.  637),  133,  482. 
Marieuthal  v.  Taylor  (2  Minn.  147), 

270. 
Marine  Bk.  v.   Clements  (3  Bosw. 

600),  121. 
Marine  Bk.  v.  Wright  (48  N.  Y.  1), 

494. 
Marine  &  Fire  Ins.  Bk.  v.  Jauncey 

3  Sandf.  258),  56. 
Marine  Nat.  Bk.  v.  Nat.  City  Bk. 

(59  N.  Y.  67),  230,  451. 
Marion  Gravel  Road  Co.  v.  Kes- 

singer  (66  Ind.  553),  264. 
Marion  v.   Logansport  R.   R.  Co. 

(7  Ind.  648),  128. 
Marion  Bk.  v.  Smith  (18  Me.  99) ,  318.. 
Marion,  etc.,  R.  R.  Co.,«.  Dillon  (7 

Ind.  404),  128. 
Marion,  etc.,  R.   R.   Co.  v.  Hodge 

(9  Ind.  163),  128,  218. 
Markham  v.    Hazen    (48  Ga.  570),, 

228. 
Markle  v.  Hatfield   (2  Johns.  455), 

466. 
Marr  v.  Johnson  (9  Yerg.  1),  335,. 

342. 
Marrigan  v.  Page  (4  Humph.  247), 

23. 
Marryatts  v.  White  (2  Stark.  101), 

377. 
Marsh  v.  Fulton  Co.  (10  Wall.  683), 

482. 
Marsh  v.  Gold  (2  Pick.  285),  97. 
Marsh   v.  Low  (55  Ind.  271),   154, 

230. 
Marsh  v.  Marshall,  (53  Pa.  St.  390), 

295. 
Marsh  v.    Redder    (4   Camp.   257),. 

244,  380. 

907 


TABLE    or    CASES    CITED. 


References  are  to  Sections. 


Marsh   v.  Small  (3   La.   Ann.  402), 

289. 
Marshall  v.  Bait.  &  O.  K.  R.  Co.  (1(3 

How.  314),  187. 
Marshall  v.  Clary  (44  Ga.  513),  227. 
Marshall  v.  Marshall  (42  Ala.  149), 

379. 
Marshall  v.  Mitchell  (35  Me.  221), 

362,363. 
Marshall  v.  Russell  (44  N.  H.  500), 

34c. 
Marshall  v.    Ruttou  (8  T.  R.  545), 

61. 
Marshall    v.    Stevens    (8    Humph. 

159),  G2. 
Marsliall  County  v.  Cook  (38    111. 

44),  480. 
Marston  v.  Allen  (8  M.  &.  W.  494), 

249,  250,  256. 
Marston  v.  Carr  (16  Ala.  325),  251. 
Martendale  v.  Follett  (1  N.  H.  99), 

392,  394. 
Martin  v.  Bacon  (2  Mills,  132),  223. 
Martin  v.  Bank  U.  S.  (4  Wash.  C. 

C.  253),  467. 
Martin  v.  Boyd  (11  N.  H.  385),  270, 
Martin  v.    Chauntry    (2    Strange, 

1271),  29c. 
Martin  v.  Coles  (104  U.  S.  30),  273. 
Martin   v.  Franklin  (4  Johns.  124), 

410,  511. 
Martin  v.  Foreman  (18  Ark.  249), 

201,  202. 
Martin  v.  Ingersoll(8  Pick.  1),  335, 

337. 
Martin    v.    Kirk    (2    Humph.  529), 

107. 
Martin  v.  Lewis  (30  Gratt.  672),  24, 

26. 
Martin  v.   Martin  (I    Smed.  &  M. 

176),  506. 
Martin  v.  Mayo  (10)  Mass.  137),  50. 
Martin  r.  Morgan    (3  Moore,  635), 

373,  454. 

908 


Martin   v.  O'Bannon  (35  Ark.  68) 

249. 
Martin  i".  Pennock   (2   Barr,  376) 

380. 
Martin  v.  Reynolds  (16  Mich.  70) 

305. 
Martin   v.    Smylce  (55   Mo.    577) 

285. 
Martin  v.   Voeder  (20   Wis.    466) 

194. 
Martin  v.  Wade  (37  Cal.  168).  186 
Marton  v.  Walton  (1  McCord,  16) 

106,  107. 
Martin  v.  Winslow  (2  Mason,  241) 

365. 
Martiueau    v.  IMcCallum  (4  Chand 

153),  305. 
Marvin  v.    McCullom    (20    Johns 

288),  34. 
Marvine  v.  Hymers  (12  N.  Y.  223) 

118,196. 
Marzion  v.  Pische  (8  Cal.  522),  80 
Mason  v.  Barff  (2  B.  &  Aid.  26),  224 
Mason  v.  Bradley  (11  M.  &  W.  590) 

394. 
Mason  v.  Campbell  (27  Minn    54) 

162. 
Mason  v.  Dousay  (35  111.  424),  226 

506. 
Mason  v.  Franklin  (3  Johns.  202) 

213,  321,  314. 
Mason  r.  Frick  (105  Penn.  St,  162) 

117. 
Mason  v.  Hunt  (1  Doug.  297),  226 

(2  Doug,  297),  227. 
Mason  v.  Hyde  (41  Vt.  432),  34a. 
Mason  v.   Jordan    (13   R.    I.  193) 

172o(. 
Mason  v.  Metcalf  (8  Baxter,  440) 

25. 
Mason  v.  Morgan  (2  Aid.  &  El.  30) 

59,  63,  262. 
Mason  v.  Noouau  (7  Wis,  609),  251 

269. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Mason  v.  Pritcharcl  (9  Heisk.  797), 

3U,  361,  416. 
Masou   V.  Rumsey  (1   Camp.  384), 

105,  219. 
Mason  v.  Wright  (13  Met.  306),  46. 
Mass.  Bk.  V.  Oliver  (10  Cush.  557), 

336. 
Massey  v.  Building  Assn.  (22  Kan. 

634),  118. 
Massey  v.  Turner  (2  Houst.    79), 

310. 
Massraan  v.  Holclier   (49  Mo.  87), 

3id. 
Master  v.  Miller  (4  T.  R.  340),  194, 

392,  394. 
Mathes  v.  Dobschuetz  (72  111.  438), 

46. 
Mathews  v.  Allen  (16  Gray,    594), 

365. 
Matthews  v.  Baxter  (L.  R.  &,  Ex. 

132),  57. 
Mathews  v.  Hall  (1  Vt.  316),  243. 
Mathews  V.   Haydon  (2  Esp.  509), 

313. 
Mathews  v.  Poytheress  (4  Ga.  287), 

l54,  303. 
Mathews    v.    Redwine    (23    Miss. 

233),  17. 
Mathewson  v.  Stafford  Bk.  (45  N. 

H.  104),  .S36. 
Mathey  v.  Galley  (4  Cal.  62),  363. 
Mathiesou  v.  McMahon  (38   N.  J. 

536),  53. 
Mathieson  v.  Sprague  (1  R.  1. 1),  273. 
Matlock  V.  Hendricksou  (1   Green 

(N.  J.)  263),  242. 
Matlock  V.  Livingston  (9  Sm.  &  M. 

489),  152. 
Mattesou    v.    Ellsworth  (33  Wis. 

488),  392. 
Matteson  v.  Morris  (40  Mich.  52), 

247. 
Matteson    v.    Moulton     (11    Hun, 

268),  224. 


Matthews  v.  Bloxsome  (Q.  B.  33  L. 

J.  R.  209),  2576. 
Matthews  v.  Dare  (20  Md.  248), 381. 
Mattison  v.  Marks  (31  Mich.  421), 

25. 
Mauldin  v.  Branch  Bk.  (2  Ala.  502), 

98,  292,  303. 
Maule  V.    Crawford    (14  Hun  (N. 

Y.),  193),  21. 
Maull  V.  Vaughn  (45  Ala.  134),  170. 
Maupin  v.  Compton   (3  Bibb,  215), 

244. 
Mauran  v.  Lamb  (7  Cow.  174),  374. 
Maurin  v,  Lambert  (7  Cow.  176), 

455. 
Maury  v.  Rogers  (24  Gratt.  169), 

463. 
Mans  V.  Worthing  (3  Scam.  2'J),  75. 
Maux  Ferry  Gravel  R.  Co.  v.  Bran- 
egan (40  lud.  361),  128,  355,  356. 
Maxey  r.  Knight  (18  Ala.  300),  310. 
Maxwell  v.  Campbell  (8  Ohio,  265), 

174. 
Maxwell  v.  Morehart  (66  Ind.  301), 

28,  285. 
Maxwell  v.  Vansant  (56  111.  58),  269. 
May  V.  Boisseau  (12  Leigh,  521),  64, 

158,  355,  362. 
May  V.  Campbell  (7  Humph.  450), 

292. 
May  V.  Chapman  (16  M.  &  W.  355), 

300. 
May  V.  Coffin  (4  Mass.  341),  357. 
May  V.  Cooper  (Fortescu,  376),  315. 
May  V.  Hewitt  (33  Ala.  161),  87, 123. 
May  V.  Kelly  (27  Ala.  497),  78,  219, 

228. 
May  V.  Miller  (27  Ala.  515),  11. 
May  V.  Quiraby  (3  Bush,  96),  165. 
May  V.  Williams  (27  Ala.  267),  198. 
Mayberry  v.  Boynton  (2  Harr.  24), 

421. 
Mayberry  v.  Morriss  (62  Ala.  116), 

165,  251,  302. 

909 


TABLE    OF    CASES    CITED. 


Refereuecs  are  to  Sections. 


Mayer  v.  Isaac   (G  M.  &  W.  tlOa), 

4Ui. 
Mayer  v.  Mode  (14  Huu,  155),  1()5, 

169. 
Mayhew  v.  Crickutt  (2  Swaust.  185), 

424. 
Mayhew  V.  Prince  (11  Mass.  55),  80. 
Maynard  v.  Fellows  (43  N.  H.  255), 

103. 
Mayo  u.  Chenoweth  (Breese,  155), 

17. 
Mayor  of  Alexandria  v.  Patten  (4 

Craucli,  317),  377. 
Mayor  of  Griffin  v.  City  Bk.  (58  Ga. 

584),  473. 
Mayor  v.  Johnson  (2  Camp.  326), 

467. 
Mayor  v.  Lord  (9  Wall.  414),  480. 
Mayor,  etc.,  v.  Potomac  Ins.   Co. 

(58Tenu.  29G),  475,  478. 
Mayor  v.  Ray  (19  Wall.  468),  133, 

134,  138. 
Mayor  of  Wetumpka  v.  Wetumpka 

Wharf  Co.  (63  Ala.  611),  154,  303. 
Mays  V.  Callison  (6  Leigh,  230) ,  260. 
Meacher  r.  Fort  (3  Hill,  227),  399. 
Mcachum  v.  Dow  (32  Vt.  721),  186. 
Mead  v.  Caswell  (9  Mod.  60),  443. 
Mead  v.  Mercliants  Bk.  (25  N.  Y. 

143),  120,  166,  233,  438. 
Mead  v.  Small  (2  Greenleaf,  207), 

376. 
Mead  v.  Young  (4  T.  R.  28),  266. 
Meadow  v.  Bird  (22  Ga.  246),  173. 
Means  v.  Sworrastedt  (32  Ind.  87), 

124. 
Mears  v.  Graliam  (8  Blatchf.  144), 

28. 
Mears   v.    Waples   (3  Houst.  582), 

491. 
Meclianics  Assn.  v.   Ferguson  (29 

La.  549),  163,  249. 
Mechanics  Bk.  v.  Bk.  of  Columbia, 

(15  Wheat.  326),  85,  120, 123, 124. 
910 


Mechanics  Bk.  v.  Earp  (4  Rawle, 

390),  86. 
Meclianics    Bk.     v.     Griswold    (7 

Wend.  165),  362. 
Mechanics  Bk.   v.  Livingston    (33 

Barb.  458),  106,  220. 
Mechanics  Bk.  v.  Merchants  Bk.  (6 

Met.  13),  315,  318. 
Mechanics  Bk.  v.  Seton  (1  Pet.  299), 

241. 
Mechanics  Bk.  v.  Straiter  (3  Abbott 

(N.  Y.)  App.)  269),  17. 
Mechanics    Bk.    v.   Townscud  (29 

Barb.  569),  288. 
Mechanics  Bk.  v.  Valley  Packing 

Co.  (4  Mo.  App.  200),  268. 
Mechanics,  etc.,  Bk.  v.  Barnett  (27 

La.  Ann.  177),  304. 
Mechanics,    etc.,   Bk.  v.  Ci'ow  (60 

N.  Y.  85),  154,  164,  165,  169,  303. 
Mechanics,   etc.,   Bk.  v.  Farmers' 

Bk.  (60  N.  Y.  47),  491. 
Mechanics,  etc.,   Bk.   v.    Schaum- 

burg  (38  Mo.  228),  82. 
Mechanics,    etc.,  Bk.  v.    Schuyler 

(7  Cow.  337),  10,  316.  ■ 

Mechanics   Bk.   Assn.  v.   Place  (4       fl 

Duer,  212),  340. 
Mechanics   Banking  Association  v. 

New  York,  etc..  White  Lead  Co. 

(35  N.  Y.  505),  115,  127. 
Mecorney  v.    Stanley  (8Cush.  85), 

157. 
Meggett  V.  Bauni  (57  Miss.  22),  247. 
Megginson  v.  Harper  (2  Cromp.  & 

M.  322),  17. 
Melilberg  v.  Fislier  (24  Wis.  607), 

69,  379. 
Meiswinkler  v.  Jung  (30  Wis.  361), 

424. 
Melan  v.  Fitzjames  (1  B.  &  P.  133), 

506. 
Melanatte   v.  Teasdale    (13    M.  &. 

W.  216),  23. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Melberg  v.  Watrous  (7  Hill,  110), 

49. 
Melendy  v.  Keeu  (89  111.  395),  805. 
jvfelickv.  First  N.  B.  (52  Iowa,  94), 

423. 
Melleu  V.  Moore  (68  Me.  390),  123. 
Mellersh  v.  Rippeu  (7  Exch.  578), 

345. 
Mellish  V.  Rawdou  (9  Biug.  416), 

216. 
Mellish  V.  Simeon   (2  H.  Bl.  378), 

218,  400,  407. 
Melvin   v.  Proper's,  etc.  (16  Pick. 

167),  63. 
Menasha  v.  Hazard  (102  U.  S.  81), 

482. 
Meudez  v.  Carreroou  (1  Ld.  Raym. 

742),  373. 
Meuifee  v.   Clark    (35    Ind.    304), 

424. 
Menkens  v.  Heriughi  (17  Mo.  297), 

63,  74. 
Mentross   v.  Clark  (2  Sandf.  115), 

301. 
Mercantile  Bk.  v.  Cox  (38  Me.  500), 

104. 
Mercantile  Bk.  v.  McCarthy  (7  Mo. 

App.  318),  340. 
Mercer    v.    Lancaster    (5  Pa.    St. 

160),  176. 
Mercer  v.   Co.  v.  Hacket  (1  Wall. 

95),   117,  472,  473,  474,  475,  482. 
Mercer    Co.   v.  Hubbard    (45    111. 

140),  475,  480,  482. 
Merchants  Bk.  v.  Birch  (17  Johns. 

25),  336. 
Merchauts   Bk.    v.    Central  Bk.  (1 

Kelley  (Ga.)  418),  120,  310. 
Merchants  Bk.   v.   Elderkiu  (25  N. 

y.  178),  318. 
Merchauts  Bk.  v.  Evans  (9  W.  Va. 

373), 310. 
Merchants   Bk.  v.  Griswold  (16  N. 
.  Y.  S.  C.   (9  Hun)  565),  226. 


Merchauts   Bk.   v.    Marine  Bk.  (3 

Gill,  96),. 121. 
Merchants  Bk.  v.  Rudolf   (5  Neb. 

527),   120. 
Merchauts  Bk.   v.  Spicer  (6  Wend 

443),   12,  265,  312,  440,  442,  443. 
Merchauts    Bk.    v.    State  Bk.    (10 

Wall.   604),    120,    125,  430,   436, 

438,  441. 
Merchauts  &  P.  N.  Bk.  v.  Trustees 

(92  Ga.  271),  303. 
Merchauts  &  F.    Bk.    v.    Wexsou 

(42  N.  y.  438),  169,  170. 
Merle  v.  Wells  (2  Camp.  413),  416. 
Merriam  v.  Cunningham  (11  Cush. 

40),  46. 
Merriam  v.  Moody's  Ex.  (25  Iowa, 

163,  133. 
Merriam  v.   Rockwood    (47  N.  H. 

81),  286. 
Merriam  v.  Walcott  (3  Allen,  258), 

244,  245,  400. 
Merriam  v.  Wilkins  (6  N.  H.  432), 

50. 
Merrick  v.  Boury  (4  Ohio  St.  60), 

379,  380,  392. 
Merrick  v.  Burlington,  etc..  Plank 

Road  Co.  (11  Iowa,  75),  117. 
Merrick  v.   Butler   (2   Lans.  103), 

295. 
Merrilli  v.  Kenyon  (48  Conn.  314), 

87. 
Merrill  v.  Duncan  (7  Heisk.  164), 

289. 
Merrill  v.   Fleming  (42  Ala.  234), 

174. 
Merrill  v.  Wilson  (G  Ind.  426),  87. 
Merritt  v.  Beutou  (10  Wend.  117), 

196,  321. 
Merit  v.  New  York,  etc.,  R.  R.  Co. 

(21   N.  Y.  S.  C.   (14  Hun)  324), 

374. 
Merritt  v.  Duncan  (7  Heisk.  156), 

227,  294. 

911 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Meritt  v.  Flemiug    (42   Ala.  23-1), 

174,  183. 
Merritt  v.  Todd  (23  N.  Y.  28),  290, 

487. 
Mertensr.  Withiugtou  (1  Esp.  112), 

378. 
Merz  V.  Kaiser  (20  La.  Anu.  377), 

312,  340. 
Messcuger  v.  Southey  (1  M.  &  G. 

70),  345,  346. 
Mctcalf  V.  Cook  (2  R.  I.  355),  fi2. 
Metcalfe  v.  Richardson  (U  C.  B. 

1011),  344,  347. 
Metropolitan  Bk.  v.  Taylor  (32  Mo. 

338),  C2. 
Meyer  v.  City  of  Muscatine  (1  Wall. 

382),  473,  480,  481,  482. 
Meyer  V.  Haworth  (8  Ad.  &  El.  467), 

59. 
Meyer  v.  Hart  (40  Mich.  517),  28. 
Meyer  v.  Hibscher  (47  N.  Y.  270), 

314. 
Meyer  v.  Graeber  (19  Kan.  165),  42, 
Meyer  v.  Huueke  (55  N.  Y.  412), 

392. 
Meyers  v.  Standart  (11  Ohio  St.  29), 

227. 
Meyer  v.  Spence  (9  Mo.  App.  590), 

164. 
Meyersteiu  u.  Barber  (L.  R.  2  C.  P. 

661),  491. 
Michigan  Bk.  v.  Eldred  (9   Wall. 

544),  21,  98,  99,  100,  282,  283. 
Michigan  Ins.  Co.  v.  Leavenworth 

(30  Vt.  11),  10,  35,  80,  148,  283, 

315,  425. 
Michigan  State  Bk.  v.  Leavenworth 

(28  Vt.  209),  167,  226. 
Mickles   v.   Colvin   (4   Barb.  304), 

172rt. 
Middlebury  v.    Case    (6   Vt.    165) 

154. 
Middlesex    v.    Thomas    (5    C.   E. 

Green,  39),  378,  379. 
912 


Middleton  v.  Allegheny  Co.  (37  Pa. 

St.  241),  134,  480. 
Middleton  v.   Boston   Locomotive 

Works  (26  Pa.  257),  310.  * 

Middleton  Bk.  v.  Morris  (28  Barb. 

616),  442,  443. 
Miles  V.  Cook  (1  Grant  (Pa.)  58), 

75. 
Miles  V.  Hall  (12  Smed.  &  M.  332), 

340. 
Miles  V.  Reniger  (39  Ohio  St.  499), 

247. 
MUes  V.  Williams  (1  P.  Wms.  249), 

241,  (10  Mod.  243),  262. 
Milks  V.  Rich  (80  N.  Y.  268),  244. 
Millandon  v.  Anions  (15  Mart.  596), 

415. 
Millard  v.  Hewlett  (19  Wend.  301), 

50. 
Miller  v.  Austen  (13  How.  218),  486. 
Miller  v.  Biddel  (13  L.  T.  R.  334), 

25. 
Miller  v.  Bingham  (1  Ired.423),  62. 
Miiler  v.   Board  of  Education  (44 

Cal.  166),  83. 
Miller  v.    Butler   (1  Cranch  C.  C. 

170),  223. 
Miller     v.    Consolidated    Bk.    (12 

Wright,  514),  99. 
Miller  v.  Craig  (36  111.  109),  52. 
Miller  v.  Delamater  (12  Wend.  433), 

74,  262. 
Miller  v.  Finley  (26  Mich.  249),  57, 

300. 
MiUer  v.  Fletcher  (27  Gratt.  403), 

34d. 
Miller  v.  Gilleland  (19  Pa.  St.  119), 

394. 
Miller  v.  Gibbs  (29  Ind.  228),  202. 
Miller  r.  Hackley  (5  .Johns.  375),  3. 

(Anthon.   68),   4,    327,   341,   348, 

363. 
Miller  v.  Helm  (2  Sm.  &  M.  687), 

148. 


TABLE    OF    CASES    CITED, 


References  are  to  Sections. 

Miller  y.  Henderson  (10  Serg.  &  R. 

290),  42. 
Miller  v.  Hughes  (1  A.  K.  Marsh, 

181),  100. 
Miller  v.    Knight   (G  Baxter,  503), 

425. 
Miller  v.  Liiiusdeu  (l(i  111.  161),  379, 

380,  881. 
Miller  u.McCauu  (7  Paige,  451),  424. 
Miller  v.  McKenzie  (95  N.  Y.  575), 

173,  200. 
Miller  v.  Miller   (3  P.  Wras.  356), 

252. 
Miller   v.  Ord  (2   Biun.  382),  249, 

464. 
Miller  v.  Race  (1  Burr.  452),  1,  289, 

464. 
Miller  v.  Ray  (19  Wall.  468),  480. 
Miller  v.  Reed  (27  Pa.  St.  244),  394. 
Miller  v.  Ritz  (3  E.  D.  Smith,  253), 

204. 
Miller  v.  Rutlaud,  etc.,    R.  R.   (40 

Vermont,  399),  117,  305,  471. 
Miller  v.  Stem  (2  Pa.  St.  286),  424. 
Miller  v.  Thompson  (3  Man.  &  G. 

576),  20,  140,  218. 
Miller  v.  Trevillian  (2  Rob.  1),  377. 
Miller  v.  Weeks   (22  Pa.  St.  9),  20. 
Miller  v.  Williamson  (5  Md.  219), 

148. 
Miller  u.  Wood  (23  Ark.  546),  204. 
Mills  V.  Bk.  of   U.  S.  (11    Wheat. 

431),  315,  316,  318,  345,  346. 
Mills  V.  Barber  (1  Mees.  &  W.  425), 

154,  303. 
Mills  V.  Barney  (22  Cal.  240),  259, 

486.    ' 
Mills  V.  Beard  (19  Cal.  161),  363. 
Mills   V.  Fowlkes  (4  Bing.  (N.  C.) 

455),  377. 
Mills  V.  Gleason  (11  Wis.  470),  133, 

134,  480,  481. 
Mills  V.  Jefferson  (20  Wis.  50),  473, 

476,477. 


■-8 


Mills  V.  Knykendale  (2  Blackf.  47), 

26, 
Mills  V.  Linnell  (97JVIass.  298),  162. 
Mills  V.  Oddy  (2  C.  M.  &  R.  103), 

203. 
Mills  V.  Porter  (11  N.  Y.  S.  C.  (4 

Hun)  524),  294. 
Mills  u.  Stewart  (12  Ala.  90),  251, 

302, 
Milues   V.    Dawsou  (5  Exch.  948), 

159. 
Milues  V.  Duncan  (6  B.  &  C.  671), 

373. 
Milton  V.  DeYampert  (3  Ala.  648), 

271. 
Mims  V.  West  (38  Ga.  18),  251,  302, 
Minard  ».  Mead  (7  Wend.  68),  61, 

74. 
Minell  v.  Reed  (26  Ala.  736),  302. 
Miner  v.  Paris  Exch.  Bk.  (53  Texas, 

559),  196. 
Mineral  Point  R.  R.  Co.  v.  Barron 

(83  111.  367),  506. 
Minetw.  Gibson  (3  T.  R.  481),  19. 
Minor  v.  Mecanics  Bk.  of  Alexan- 
dria (1  Pet.  46),  78,  81,  85,  262. 
Minturn  v.  Eisher  (7  Cal.  573),  363, 

434. 
Mintux'n  v.   Larue    (23   How.   435, 

436),  133. 
Miser  v.    Trooinger    (7   Ohio    St. 

238),  336,  355. 
Mitchell  V.  Baring  (10  B.  &  C.  4), 

227,  228,  323,  313,  314. 
Mitchell   V.   Burlington     (4   Wall. 

274),  481. 
Mitchell   V.    Byrne    (6   Rich.   171), 

34. 
Mitchell    V.   Catchings     (23    Fed. 

Rep.  710),  296. 
Mitchell   V.   Cockburn    (2    H.    Bl. 

379),  198; 
Mitchell    V.  Cross  (2    R.    I.  437), 

337 

913 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Mitchell   r.  Culver  (7    Cow.   336), 

10. 
Mitchell  V.   DeGraud    (1    Masou, 

17G),  211,  31U. 
Mitchell  V.  Hewitt   (5  Smed.  &  M. 

361),  29. 
Mitchell  V.  Kiugmau  (5  Pick.  431), 

:>2. 

Mitchell  V.  Reynolds    (1  P.  Wins. 

190),  190. 
Mitchell  V.   Rome   R.  R.   Co.    (17 

Ga.  574),  23,116. 
Mitchell  V.  Sproul,  (5  J.  J.  Marsh. 

264),  75. 
Mitchinson  v.    Hewson    (7  T.  R. 

348),  60. 
Mitford  V.    Walcot    (1  Ld.    Raym. 

374),  220,  228,  269. 
Mithofe    V.   Byrne    (20    La.     Ann. 

363),  87. 
Mix  V.  Madison   Ins.  Co.  (11  Ind. 

117),  511. 
Mix  V.  Nat.   Bk.  (91    111.    20),  165, 

166. 
Moakley  v.  Riggs    (19  Johns.  69), 

416. 
Mobile  Bk.  i?. Brown  (42  Ala.  108), 

29. 
Mobley  v.   Clark  (28   Barb.   390), 

355. 
Mobley  r.  Ryan  (14  111.  51),  269. 
Moes  V.  Knapp  (30  Ga.  942),  11. 
Moffat  V.  Edwards  (Car.  &  M.  16), 

25. 
Moffat  r.  McKissock  (8  Baxt.  517), 

103. 
MofEett  V.  Bickle    (21  Gratt.   283), 

259. 
Moge  V.   Herndon   (30  Miss.  120), 

392. 
Moggridge  v.  Joue.s  (14  East,  486), 

204. 
Mohawk    Bk.    r.     Bloderick     (10 

Wend.  304),  216,  434,  442,  443. 

914 


Mohawk  Bk.  r.  Corey  (I  Hill,  513), 

166,  301. 
Mohr  V.  Tulip  (40  Wis.  66),  52. 
Moires    t>.   Bird    (11   Mass.    436), 

157,  270,417,  418. 
'Moires   v.   Knapp    (30     Ga.    942), 

220. 
Moise    V.   Chapman  (24  Ga.  249), 

464. 
Moline,  Ex  parte  (19     Vcs.    216), 

336,  339. 
Moloney    v.   Stevens     (11    Heisk. 

738),  80. 
MoUoy   V.  Delves    (7    Biug.  428), 

220. 
Molton  V.  Cameron   (4  Exch.  17), 

53. 
Molton    V.     Cramroux     (2     Exch, 

487),  57. 
Monroe   v.   Cooper  (5   Pick.   412), 

99,  303. 
Monroe  v.  Hoff  (5  Deuio  369),  379, 
Monseaux  v.  Urquhart  (19  La.  485), 

80. 
Monson  v.  Drake  (40  Conn.  552), 

13. 
Montague  v.  Perkins    (22  Eng.  L. 

&  Eq.  516),  220,  227,283. 
Montgomery   v.  .Agricultural  Bank 

(10  Smed.  &M.567),  62. 
Montgomery  v.  Budge  (3  Dow.  & 

C.  297),  511. 
Montgomery  v.  Kellogg  (43  Miss. 

4«6),  415,  420,  421. 
Montgomery  v.    Larapton  (3   Met. 

(Ky.)  519),  162. 
Montgomery  v.  Tutt  (11  Cal.  307), 

310. 
Montgomery  Co.  Bk.   v.  Marsh   (3 

Seld.  481),  342. 
Montgomery     Co.   Bk.    v.   Albany 

City  (8  Barb.  399),  217. 
Montgomery  R.  R.  Co.    v.  Trebles 

(44  Ala.  258),  336,  361,  376. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Montpelier  Bk.  v.   Dixdu    (4   Vt. 

399),  424. 
Moutrose  v.  Clark  (2  Sandf.  115), 

164. 
Monumental    Nat.    Bk.     v.  Globe 

Works  (101  Mass.  557),  115,  116. 
Moodie  v.   Morrall    (1     Const.  R. 

367),  313,  314,  342. 
Moody  f.    Fiudley    (43    Ala.  167), 

261. 
Moody  r.  Mark  (43  Miss.  210),  441. 
Moody  V.  Threlkeld  (13  Ga.  55),  17, 

220. 
Moon  V.  Foster  (19  Gratt.  433),  66. 
Moore  v.  Baird    (30  Pa.  St.  139), 

292,  293. 
Moore  v.  Barthrop  (1  B.  &  C.  5), 

456. 
Moore  v.   Clopton    (22  Ark.  125), 

506. 
Moore  v.  Coffield  (1  Dev.  247),  314, 

359. 
Moore  v.  Cross  (19  N.  Y.  227),  271. 
Moore  v.  Deuslow  (14  Conn.  235), 

262. 
Moore  r.  Fall  (42  Me.  450),  366. 
Moore  v.  Hershey  (9  Norris  (Pa.) 

196),  52,   (90  Pa.  St.  196),  53,  55. 
Moore  v.  Howland  (4  Denio,  264), 

196. 
Moore  v.  Hutchinson  (69  Mo.  429), 

392,  394. 
Moore  v.  Lackman    (52  Mo.  323), 

107. 
Moore  v.  Lanham    (3   Hill    S.    C. 

299),  201. 
Moore  v.  McClure  (15  N.  Y.  (S.  C.) 

(8  Hun)  558),  85. 
Moore  v.  Metropolitan  Nat.  Bk.  (55 

N.  Y.  41),  497. 
Moore  v.  Rider  (65  N.  Y.  438),  167, 

169,  301. 
Moore  v.  Robinson  (62  Ala.  537), 

288,  493. 


Moore  r.  Viele  (4  Wend.  420),  162. 
Moore  r.  Waitt  (13  N.  H.  415),  318. 
Moore  v.  Wilby  (Butler  N.  P.  270), 

220,  223. 
Moore  v.   Wilson  (26  N.  H.  332), 

123. 
Mooreman  v.  Bk.  of  Alabama  (12 

Ala.  353), 345. 
Moran  v.  Miami  Co.  (2  Blackf .  725), 

83,  117,  473,  475,  482. 
Mordecai  v.  Dawkins  (9  Rich.  262), 

198. 
More  V.  Manning  (1  Comyns,  311), 

266. 
Morehead  v.   Gilmer    (77   Pa.   St. 

118),  99. 
Morehead  v.  Parkersburg  Nat.  Bk. 

(5  W.  Va.  74),  393,  394. 
Morey  v.  Wakefield  (41  Vt.  24),  296. 
Morford  v.  Davis    (28  N.  Y.  484), 

259. 
Morford  v.  Farmers  Bank  (26  Barb. 

568),  116. 
Morgan   i?.   Bk.    of    Louisville    (4 

Bush,  82),  354. 
Morgan  v.  Bk,  N.  A.  (1  Duer,  434), 

451. 
Morgan  v.   Creditors  (1  La.  527), 

379. 
Morgan  v.  Davison  (1  Stark.  114), 

317. 
Morgan  v.  Edwards  (53  Wis.  599), 

28. 
Morgan  v.  Elam  (9  Yerg.  375),  62. 
Morgan  v.  Jones  (20  Eng.  L.  &  Eq.) , 

412. 
Morgan  v.  Richardson  (7  East,  482), 

200,  201,  203. 
Morgan  v.   Van  Ingen   (2  Johns. 
.  204),  326. 
Morley  v.  Buothby  (3  Blng.  107), 

418. 
Morley  v.  Culver  well  (7  M.  &  W. 

174),  294. 

•   915 


TABLE    OF    CASES    CITED. 


Refereuces  are  to  Sections. 


Mornyer  v.  Cooper  (35  lo^va,  25"), 

295. 
Morrell  v.  Codding  (4  Allen,  403), 

124. 
Morrill  r.  Brown  (15 Pick.  173),  464. 
Morris   v.  Bacon    (123    Mass.  58), 

305. 
Morris  v.  Bethel  (L.  E.  5  C.  P.  47), 

398. 
Morris  v.  Edwards  (1  Ohio,  80),  29. 
Morris  v.  Faurot  (21  Ohio  St.  155), 

273. 
Morris  v.  Harvey  (75  Va.  726),  379, 

380. 
Morris   i'.   Husson    (4  Sandf.  93), 

342. 
Morris  v.  Lee  (2  Ld.  Raym.  1396), 

23. 
Morris  i'.  Nixon  (7  Humph.  579),  57. 
Morris  v.  Preston  (93  111.  215),  266. 
Morris   v.   Richards    (45  L.  T.    R. 

(X.  s.)  210),  316. 
Morris  Run   Coal    Co.   v.  Barclay 

Coal  Co.   (68  Pa.    8t.  173),  190, 

198. 
Morris  v.  Taylor  (6  C.  E.  Greene, 

439),  162. 
Morris  v.  Walker  (69  Eug.  C.  L.  R. 

588), 270. 
Morris  v.  White  (28  La.  855),  305. 
Morris  Bkg.  &  Can.  Co.  v.  Fisher 

(9  N.J.  Eq.  699),  117,  473. 
Morris  v.  Bkg.  &  Can.  Co.  v.  Lewis 

(12N.  J.  Eq.323),  117,  304. 
Morrison  v.  Bailey  (5  Ohio  St.  13), 
.      421,  432,  434,  442,  443,  452. 
Morrison   v.  Buchanan   ((i   C.  &  P. 

18),  217. 
Morrison  v.   Hartraan    (2    Harris, 

416),  424. 
Morrison  v.  Lovell  (4  W.  Va.  350), 

244,  256,  357. 
Morrison  v.  McCarty  (30  Mo.  183), 

442. 

916 


Morrison   v.   Smith   (81    111.   221), 

379. 
Morrison  v.  Taylor  (6  Mon.  82),  77. 
Morrison   v.  Thistle  (67  Mo.  596), 

62. 
Morrow  v.  Whitesides  (10  B.  Mon. 

411),  00. 
Morse   v.   Clayton    (13   Sm.   &  M. 

373),  148. 
Morse  v.  Green  (13  N.  H.  32),  85. 
Morse  v.  Huntington  (40  Vt.  488), 

424. 
Morse  v.  Mass.  Nat.  Bk.  (1  Holmes 

C.  C.  209),  78,  437. 
Mortee  v.  Edwards    (20  La.  Ann. 

236),  25. 
Morton  v.   Burr  (7  Ad.  &  El.  19), 

166. 
Morton  v.  Rogers  (12  Wend.  484), 

154. 
Morton  v.   Rose    (2    Wash.    (Va.) 

233),  6. 
Morton  v.  Steward  (5  Bradw.  533), 

46,  (5  111.  App.  533),  48. 
Mosely  v.   Graydon   (4  Strob.    7), 

148. 
Moses   V.  Fogarte  (2  Hill  (S.  C) 

335),  61. 
Moses  V.   Franklin  Bk.    (34     Md. 

574),  442,  452. 
Moses  V.  Trice  (21  Gratt.  556),  373. 
Moss  V.    Adams    (4   Ired.  Eq.  42), 

377. 
Mossu.  Averill  (10  N.  Y.  449,  457), 

115. 
Moss  V.  Bossie  Lead  Mining  Co. 

(5  Hill,  137),  115. 
Moss    v.  Livingston  (4  N.  Y.  208), 

123,125. 
Moss   V.  Oakley  (2  Hill,  265),  115, 

138. 
Moss  V.  Riddle  (5  Cranch,  351),  Sid. 
Mo^sop   V.   Eadon    (16   Ves.   430), 

366. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Mott  V.  Clark  (9  Pa.  St.  899),  305. 
Mott  V.    Hicks    (1    Cow.    533),  85, 

260. 
Mott  V.  Havana  Nat.  Bk.  (22  Huu 

(N.  Y.)  35-t),  26. 
Moule  V.  Brown  (4Bing.N.  C.  266), 

443. 
Moulton  V.  Postou  (52  Wis.  169), 

424. 
Moultrie  Co.  v.  Fairfield  (105  U.  S. 

370),  481. 
Mountford  v.  Harper  (16  M.  &  W. 

825),  455. 
Mount  Holly  Turnpike  Co.  v.  Ferree 

(2C.  E.  Green,  117),  497. 
Mountstephen  v.  Brooke  (1  Barn. 

&  Aid.  224),  15^  219. 
Mt.     Sterling    Turnpike     Co.     v. 

Looney  (1  Met.  (Ken.)  550),  121. 
Mount  V.    Suydam    (4  Sandf.  Ch. 

99),  305. 
Mount   Oliver  Cemetery  v  Shubert 

(2  Head,  116),  81. 
Moxon  V.  Rilling  (4  Camp.  51),  264. 
Moynahau  v.    Hanford    (42  Mich. 

330),  270. 
Moye  V.  Cogdell  (69  N.  C.  93),  375. 
Mudd  V.  Reeves  (2  Harr.  &  J.  368), 

466. 
Mudger  v.  Bullock  (83  111.  22),  74. 
Muhling  V.  Battler  (3  Mete.  (Ky.) 

286),  20. 
Muilman  v.    D'Eguino  (2    H.  Bl. 

565),    337. 
Muir  V.  Crawford   (2   Scotch  App. 

L.  R.  456),  424. 
Muii'  ead   v.    Kirkpatrick  (21    Pa. 

St.  237),  164,  175,  424. 
Muldon  v.  Whitlock  (1    Cow.  290), 

380. 
Muldrom  v.  Caldwell  (7  Mo.  563), 

20,  266,  394. 
Mull  V.  Bricker  (75  Pa.    St.   255), 

222. 


Mull  V.  Van  Frees  (50   Cal.   547), 

170. 
Mullen  V.  Morris  (2  Barr.  86),  326, 

508. 
MuUer  v.  Pondir    (55  N.   Y.  325), 

34a. 
Muller  V.  Wadlington  (5  S.  C.  242), 

305. 
Mulllck  V.    Radakissen  (9  Moore, 

P.  C.  46),  211,  215,  216. 
Muraford??.  Amei'ican  Life  Ins.  Co. 

4  N.  Y.  463),  115. 
Mumford  v.  Hawkins  (5  Den.  355), 

121. 
Muncy    Borough    School   District 

V.  Commonwealth  (84  Pa.  464), 

216. 
Munger  v.  Abany  City   Bk.  (85  N. 

Y.  587),  488. 
Munger  v.  Shannon  (61  N.  Y.  258), 

26. 
Munu  V.   Baldwin  (6   Mass.  316), 

341. 
Munn  V.  Birch  (25  111.  35),  452. 
Munn  V.   Commissioners    Co.    (15 

Johns.  44),  80,  115,  292. 
Munn    V.    McDonald    (10     Watts, 

270),  163. 
Munson  v.  Adams  (89  111.  450),  170. 
Monroe  v.   Bordier  (8   C.  B.  862), 

155. 
Munroe  v.  Easton    (2  Johns.  Cas. 

75),  310. 
Murchie  v.   McFarlaue    (Thomson 

on  Bills,  110),  392. 
Murdock  v.  Lee  (4  Pat.   Ap.  Cas. 

(Scotch)  261),  394. 
Murdock  17.  Mills  (11  Met.  5),  220. 
Mure,  Ex  parte  (1  Cox,  93),  424. 
Murphy  v.  Keys    (7  Jones  &  S.  78), 

170. 
Murray  ;y.   Beckwith    (81  111.   43), 

289. 
Murray  v.  Carliu  (67  lU.  286),  57.      , 

917 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Murray  v.  East  India  Co.  (5  B.  & 

Aid.  204),  77,  148,  310. 
Murray  v.    Glasse    (23    L.    J.  Cli. 

12(5),  63. 
Murray  v.  Judah  (G  Cow.  484),  232, 

250,  2.55,  442,  445,  449. 
Mu-ray  v.  Lardner   (2  Wall.  110), 

117,  154,  289,  295,  303,  473. 
Murray  v.  Lylbouru    (2  Johns.  Cli. 

441),  302. 
Murray  v.  Jones  (50  Ga.  118),  249, 

305. 
Murrill  v.    Handy    (17    Mo.   40(5), 

29c. 
Musgrave  v.  Drake  (5  Q.  B.  185), 

99. 
Mussleman  v.  Cravens  (47  Ind.  1), 

52. 
Musselman  v.   Oakes  (19  111.  81), 

18. 
Mussey   v.  Eagle  Bk.  (9  Met.  30G), 

120,  438. 
Mussey  v.  Rayner    (12  Pick.   223), 

420. 
Mussey  v.  Scott  (7   Cush.  215),  85. 
Musson    V.    Lake    (4    How.  262), 

32(J,  318,  334,  346,  507,  508. 
Mustard  v.    Wohlford  (15    Gratt. 

329),  47. 
Mutual  Nat.  Bk.  v.  Rotge    (28  La. 

Ann.  933),  436. 
Mutual  Life  Ins.  Co.   v.  Hunt  (79 

N.  Y.  541),  53. 
Muzzy??.  Knight  (8  Kan.  456),  42. 
Myatt  V.   Bell   (41   Ala.  222),  107, 

379. 
Myer  v.  Beardsley  (1  Vroora,  236), 

223,  227. 


N. 


Nagle  t>.  Homer  (8   Cal.   353),  227. 
Naglee  v.  Lyman  (14  Cal.  355),  168, 

226. 
Nailor  v.  Bowie    (3  Md.  252),  327, 

318. 
Nance  v.  Lary  (5  Ala.  370),  284. 
Napier  v.  Elam  (5  Yerg.  108),  168. 
Naples  V.  Brown  (48  Pa.  St.  458), 

303. 
Nash  V.  Gibbon  (4  All.  N.  B.  479), 

28. 
Nash  V.  Hodgson  (6  Deg.&  M.  &  G. 

474),  377. 
Nash  V.  Nash  (2  Mad.  133),  64. 
Nash  V.   Russell  (5  Barb  556),  172. 
Nash  V.  ToWne    (5  Wall.  689),  85. 
Nat.   Bk.  V.   Dix   (123  Mass.  148), 

123. 
Nat.   Bk.  V.  Fassett  (42  Vt.  432), 

83. 
Nat.  Bk.  V.  Kirby  (108  Mass.  497), 

303,  473. 
Nat.  Bk.  V.  Law  (127  Mass.  72),  98, 

99. 
Nat.    Bk.  V.    Lewis    (50    Vt.    622), 

363. 
Nat.  Bk.    V.  M.   N.  B.    (100   Mass. 

104),    494. 
Nat.   Bk.  V.  Second  Nat.   Bk.    (69 

Ind.  579),  452. 
Nat.   Bk.   V.  Norton  (1    Hill,  572), 

106,  107. 
Nat.    Bk.  V.  Place    (86  N.  Y.  444), 

175. 
Nat.  Bk.    V.     Smoot  (1    McCarth. 

371),  4,  506. 


Myer  v.  Hart   (40  Mich.  517),  196.      Nat.  Bk.   v.  Tappan    (6  Kan.  465), 
Myers  v.  Van    Wagenor    (56   Mo.         400. 

115),  170. 
Mylesu.  Williams  (Gibb.Cas.  318), 

241. 
Myrick  v.  Hasey  (27  Me.  12),  419. 
918 


Nat.  Bk.  V.    Texas    (20    Wall.  72), 

269. 
Nat.  Bank  v.  Wells  (79  N.  Y.  498), 

116. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Nat.  Bk.  V.  Yankton  (101 U.  S.  133), 

472. 
Nat.  Bk.    of  Commerce  v.    Nat.  M. 

B.  Assn.  (r>5  N.  Y.  213),  399,  400, 

451. 
Nat.  Bk.  of  Port  Edward  v.  Wash- 
ington  County  Nat.    Bk.    (12  N. 

Y.  S.  C.  (5  Hun)  005),  487. 
Nat  Bk.  of  Michigan  v.  Green  (33 

Iowa,  140),  292,  293. 
Nat.   Bk.   of  N.  A.   v.  Bangs  (106 

Mass.  441),  399,  400,  451. 
Nat.  Bk.   of  N.   A.  v.    Kirby    (108 

Mass.  497),  297. 
Nat.  Bk.  of  Pittsburg  v.  Wheeler, 

(60  N.  Y.  612),  259. 
Nat.  Excliange  Bk.  v.   Hartford  R. 

R.  Co.    (8   R.   I.    375),  117,  471, 

473,477,  478. 
Nat.  Gold   Bk.    v.   McDonald   (51 

Cal.  65),  449,  456. 
Nat.  Ins.  Co.  v.  Bowman  (60  Mo. 

252).   118. 
Nat.  Mechanics  Bk.  v.  Nat.  Bk.  (91 

U.  S.  98),  491. 
Nat.  Park  Bk.  v.  Ninth  Nat.    Bk. 

(46  N.  Y.  77),  230,  399,  451. 
Nat.  Pemberton  Bk.  v.  Porter  (125 

Mass,  333),  118. 
Nat.  Security  Bk.  v.  McDonald  (127 

Mass.  82),  99. 
Nave  V.   Hadley  (74  Ind.  155),  86, 

88. 
Nave  V.  Richardson  (36  Mo.  130), 

326,  313. 
Naylor  v.   Moody    (3  Blackf.  92), 

424. 
Nazro    v.   Fuller    (24  Wend.  374), 

394. 
Neal  V.  Erving  (1  Esp.  61),  79,  85. 
Neal  V.  Hanson  (60  Me.  84),  373. 
Neale  v.  Turton  (4  Bing.  149),  115. 
Needharas  v.  Page  (3  B.  Mon.  465), 
271. 


Needles  v.  Needles  (7  Ohio  St.  432), 

63. 
NefEr,  Horner  (66  Pa.  St.  327), 394. 
Negl^  V.  Lindsay  (18  P.  F.  Smith, 

217),  398. 
Neiffer    v.    Bk.    of    Knoxville    (1 

Head,  162),  121. 
Neil  V.  Case  (25  Kan.  510),  393. 
Nelson  v.  Cowing  (20  Wend.  336), 

34c,  155. 
Nelson  v.  Dubois  (13  Johns.  175), 

270,  418. 
Nelson  v.  First  Nat.   Bk.   (48   III. 

41),  222,  226,  437,  500. 
Nelson  v.   Fotterall  (7  Lay,   180), 

212,  214,    324,  326,  327,   312,  317. 
Nelson  v.   Lovejoy    (14   Ala.  568), 

170. 
Nelson  v.  Manning    (53  Ala.  549), 

25. 
Nelson  v.    Stollenwerck    (60  Ala. 

140),  262. 
Nelson  v.    Wellington    (5    Bosw. 

178),  304. 
Nelson V.  Whittall  (IB.  &  Aid.  22), 

33. 
Nevins  v.  Bk.  of  Lansingburgh  (10 

Mich.  547),  340,  419. 
Nevins  v.  DeGrand  (15  Mass.  436), 

392. 
Nevins  v.   Townsend  (6  Conn.  5), 

296. 
New  Albany   Bank  v.  Danville  (60 

Ind.  504), 183. 
Newberry  v.  Armstrong   (6  Bing. 

201),  418. 
Newberry  v.  Detroit  (17  Mich.  141), 

497. 
Newcomb    v.    Raynor    (21    Wend. 

108),  415,  423. 
Newell    V.    Gregg  (51   Barb.  263)^ 

297. 
Newell  V.  Mayberry  (3  Leigh,  254), 

392. 

919 


TABLK    OF    CASES    CITED. 


References  are  to  Sections. 


Newall  V.  School  Directors  (68  111. 

5U),  138. 
Newell  r.  Smith  (49  Vt.  25.5),  89. 
New  Euglaud  Ins.  Co.  v.  De\«olf  (8 

Pick,  or,),  12-t. 
Newlmll  V.  Central  P.  R.  R.  Co.  (51 

Cal.  345),  491,  493. 
Newhall    v.   Clark   (3   Cush.  37(;), 

227. 
Newhall  v.  Duulap  (14  Me.  180),  86, 

124. 
N.  H.  Savings  Bank  v.  Colcord  (15 

N.  II.  119), 424. 
NewPIaveuCo.  Bk.  v.  Mitchell  (15 

Conn.  20G),  348. 
New  HopeD.  &  B.  Co.  v.  Periy  (11 

III.  407),  310,  464. 
New  Jersey  Steam  Nav.  Co.  v.  Mer- 
chants Bk.    (6  How.  344,    381), 

88. 
Newlin  v.  Freeman   (4  Ired.  312), 

G2. 
Newman  v.   Frost  (52  New  York, 

422),  172a. 
Newman  v.  Gozo  (2  La.  Ann.  642), 

408. 
Newman  v.   Kaufman  (28  La.  Ann. 

865),  433. 
Newman  v.  Williams  (29  Miss.  222), 

292,  293. 
New  Market   Sav.   Bank  v.  Gillett 

(loom.  254),  123. 
New  Orleans,  etc.,  v.  Montgomery 

(95  U.  S.  18),  269,  305. 
New  Orleans  Canal  v.  Terapleton 

(20  La.  Ann.  75),  269. 
Newsom  v.  Thornton  (6  East,  41), 

491. 
Newton  v.  Jackson    (23  Ala.  83.5), 

42. 
Newton  v.  Kennedy  (31  Ark.  626), 

412. 
Newton  Wagon   Co.   v.   Dyers  (10 

Neb.  284),  26,  421. 
920 


New  York  Bk.  v.  Gibson  (5  Duer, 

574),  226. 
New  York  Exch.  Co.  v.  Dewolf  (3 

Bosw.  80),  105. 
New  York  Fire  Ins.  Co.  v.  Ely  (2 

Cow.  064),  118. 
New  York  M.  I.  Works  v.  Smith  (4 

Duer,  362),  105,  160,  169,  304. 
New  York  &  N.   H.   R.  R.  Co.  v. 

Schuyler  (34  N.  Y.  30,  64),  438, 

497. 
New  York  Iron  Mine  v.  First  Nat. 

Bank  (36  Mich.  644),  122. 
New  York,   etc.,  Co.  v.  Meyer  (51 

Ala.  325),  355,  356. 
New  York,  etc.,  Co.  v.  Selma  Sav. 

Bk.  (51  Ala.  305),  336,  356. 
New  York  &  V.  State  Bk.  v.  Gibson 

(5  Duer,  574),  5,  209. 
Niagara  Bk.  v.  Roosevelt  (9  Cow. 

409),  464. 
Niagara  Dist.  Bk.  v.  Fairman  Co. 

(31  Barb.  403),  227,  394. 
Nichol  V.  Bate  (10  Yerg.  429),  35, 

160. 
Nichol  V.   Mayor   of  Nashville   (9 

Humph.  252),  133,  481. 
Nichol  V.  Steger  (6  Lee,  393),  46. 
NichoUs  V.  Diamond  (:i4  El.  &  Eq. 

403),  125,  219. 
Nichols  V.   Blackmore    (27  Texas, 

580),  215,  216. 
Nichols  V.  Cross  (26  Ohio  St.  425), 

247. 
Nichols    V.    Goldsmith    (7    Wend. 

100),  318,  348. 
Nichols  V.  Norris  (3  Barn.  &  Ad. 

41),  422,  424. 
Nichols  V.   Pearson   (7   Pet.    103), 

292,  293. 
Nichols  r.    Pool  (2  Jones  (N.  C.) 

33),  310. 
Nichols  V.   Rodgers  (2  Pain  C.  C. 

437),  500. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Nichols  V.  State  Bk.  (3  Yerg.  107), 

82. 
Nichols  V.  Webb  (8  Wheat.  326), 

326,  327,  348. 
Nicholson  v.  Pattou  (13  La.  216), 

289. 
Nicholson     v.     Sedgwick    (1    Ld. 

Raym,  180),  2-13,  485. 
Nicholson  v.  Wilborn  (13  Ga.  467), 

46. 
Nickerson  v.  Gilliam  (29  Mo.  456), 
.    145. 
Nickerson  v.  Ruger  (84  N.  Y.  675), 

172a. 
Nighingale  v.  Chafee  (11  R.  I.  609), 

379. 
Nighingale  v.   Megiuuis    (34  N.  J. 

461),  424. 
Nighingale  v.  Withington  (15  Mass. 

272),  47,  49,  262. 
Nixon  V.   Downey  (49  Iowa,  166), 

87. 
Nixon  V.  Palmer  (4  Seld.  398),  83. 
Noble   V.    McClintock    (2  Watts  & 

S.  152),  98. 
Noble  V.  Walker  (17  Ala.  456),  292, 

293. 
Nobles  V.  Bates  (7  Cow.  307),  190. 
Noe  V.  Christie  (51  N.  Y.  273),  5a. 
Noel  V.  Murray  (3  Kern.  169),  379. 
Noll  V.  Smith  (64  Ind.  511),  25,  397. 
Norman  v.  Cole  (3  Esp.  253),  173. 
Norris  v.  Badger  (6  Cow.  499),  312, 

373. 
Norris  v.  Crummey  (2  Rand.   334), 

424. 
Norris  v.  Cummings  (2  Rand.  323), 

424. 
Norris  v.  Despard    (38  Md.   491), 

270,  354,  442,  444. 
Northampton    Bk.   v.    Pepoon    (11 

Mass.  288),  126,  127. 
North    Bk.   v.    Abbott    (13    Pick. 

465),  348. 


North  Pemi.  R.  R.  Co.  Adams  (54 

Pa.  St.  97),  476,  477. 
North  River  Bk.  v.  Aymar  (3  Hill, 

262),  81,  82. 
Northrop  v.  Sanborn  (22  Vt.  433), 

29d,  434. 
Northumberland  Co.  Bk.   v.   Eger 

(58  Pa.  St.  97),  419,500. 
N.  W.  Mutual  Ins.  Co.  v.  Blauken- 

ship  (04  Ind.  535),  52,  53,  55. 
Norton  1'.  Eastman  (4  Me.  521),  420. 
Norton  V.  Ellam  (2  M.  &  W.  461), 

310. 
Norton  v.    Lewis    (2  Conn.  478), 

315,  348. 
Norton    v.    Pickering  (8  B.  &    C. 

610),  355. 
Norton  v.  Waite  (20  Me.  175),  165. 
Nott  V.  Beard  (16  La.  308),  326. 
Norvell  v.  Hudgins  (4  Munif.  496), 

299,  300. 
Norwich    Bk.  v.    Hyde    (13  Conn. 

279),  28. 
Norwich  Town  Co.  In  re  (22  Beav. 

123),  447. 
Norwich  University  v.   Denny    (47 

Vt.  13),  89. 
Noxou   V.  DeWolf  (10  Gray,  346), 

269. 
Nugent  V.  Hickey  (2  La.  Ann.  358), 

87. 
Nunez  v.  Dantel  (19  Wall.  560),  25. 
Nunnemaker  v.   Lanier    (48  Barb. 

234),  443. 
Nurre  v.  Chittenden  (56  Ind.  465), 

272. 
Nuso  Vaumer  v.    Becker    (87  III. 

281),  106. 

o. 

Oakey  v.  Wilcox  (3  How.  (Miss.) 

330),  394. 
Oakley  v.  Ooddeen  (2  F.  &  F.  659), 

300. 

921 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Oaks  V.  Miller  (13  Vt.  106),  420. 
Gates  V.  Nat.  Bk.   (100  U.  S.  239), 

30,  IGG,  1G8,  424. 
Obbard    v.  Betham  (Mood.  &    M. 

483),  203. 
Oberv.  Goodrich  (27  Gratt.  878), 

200,  269. 
O'Brien  v.  Smith  (1  Black,  99),  443. 
O'Callaghan  v.  Thomoud  (3  Taunt. 

82),  50r,. 
Ocean  Nat.  Bk.  v.  Carll  (16  N.  Y. 

S.  C.  (10  Him)  241),  348. 
Ocean  Nat.   Bk.   v.  AVilliams  (102 

Mass.  141),  321,  322,  324. 
Ocean    Tow    Boat    Co.    v.     Ship 

Ophelia  (11  La.  Ann.  28),  456. 
Odd  Fellows  v.  First  Nat.  Bk.  (42 

Mich.  463),  85,  119. 
Odell    V.   Buck     (21   Wend.    142), 

52. 
Oddie   V.   Nat.  Cit„    Bk.   (45  N.  Y. 

735),  449. 
Odiorne  v.  Sargent  (6   N.  H.  401), 

41. 
Odiorne   v.   Woodman    (39  N.    H. 

544),  248,  295. 
Oelrichs  v.  Ford  (21  Md.  489),  88. 
Ogden  V.  Conley    (2  Johns.    274), 

348. 
Ogden  v.  Dobbin  (2  Hall,  112),  335. 
Ogden  V.  Marchaud  (29  La.  61),  83, 

280. 
Ogden  V.  Raymond  (22  Conn.  379), 

84,  136. 
Ogden  V.  Saunders  (12  Wheat.  313), 

2.59,  315. 
Oglander  v.  Baston  (1  Vern.  396), 

64. 
Ohio  V.  Frank  (103  U.  S.  698),  412, 

476. 
Ohio  Ins.  Co.  v.  Edmonson  (5  La. 

295),  506. 
O'Keefe  «?.  Dunn  (6  Taunt.   315), 
178,  321. 
922 


O'Keefe    v.    Handy  (31    La.  Ann. 

832),  164. 
Okie  V.    Spencer    (2  Whart.   253), 

166,  167,  425. 
Olcott  V.  Rathbone  (5  Wend.  490), 

379. 
Olcott    V.    Supervisors    (16    Wall. 

678),  481. 
Olcott  V.  Tioga  R.  R.  Co.  (40  Barb. 

179),  115,  124,  125. 
Olendorf  v.   Swartz    (5  Cal.  580), 

363. 
Oliver  Bk.  of  Tenn.  (11  Humph. 

74),  355. 
Oliver  v.   Hudlett  (13  Mass.  237), 

47. 
Olmstead  v.  Winstead   (32   Conn. 

278),  464. 
Olney  v.  Chadsey  (7  R.  I.  225),  121. 
Omaha  N.   B.   v.    Walker  (5  Fed. 

Rep.  399),  419. 
Oneida  Bk.  v.  Ontario  Bk.  (21  N.  Y. 

496),  479. 
Onondago  Co.   Bk.   v.   DePuy    (17 

Wend.  47),  96. 
Ontario    Bk.   v.    Worthington    (12 

Wend.  600),  168,  169,  226. 
Ord  V.  McKee  (5  Cal.  575),  305. 
Ordeman  v.  Lawson  (49  Md.  135), 

418. 
Orear  v.   McDonald  (9  Gill,  350), 

355. 
Organ  Co.  v.  Boyle  (10  Neb.  409), 

154,  303. 
Oridge  v.   Sherborne  (11  M.  &  W. 

374),  .315. 
Oriental  Bk.  v.  Blake  (22  Pick.  206). 

336. 
Oriental   Comm.    Bk.,  Ex  parte  (5 

Ch.  Ap.  358),  295. 
Orleans   v.  Pratt  (99   U.    S.    676), 

482. 
Ormsbee  v.  Howe  (34  Vt.  182),  174. 
Orrasby  v.  Kendall  (2  Ark.  338),  84. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Orons  Bk.  v.  Wood  (49  ^e.  26), 

327. 
O'Rourke  v.  O'Rourke    (43  Mich. 

58),  506. 
Orr  V.  Armory  (11  Mass.  25),  241. 
Orr  V. Maggianis  (7  East,  362),  211, 

321,  325,  .355. 
Orrick   v.  Colston    (7  Gratt.  1819), 

270,282,  283. 
Osborn  v.  Robbins  (3G  N.  Y.  365), 

287,  423. 
Osgood  w.  Pearson  (4  Gray,  455),  18. 
Osmond   v.    Fitzroy   (3  P.  Wms. 

129),  52. 
Otis   V.  Galium  (92  U.  S.  448),  244. 
Otsego  Co.  Bk.  v.  Warren  (18  Barb. 

290).   326. 
Otto  V.  Bedden  (28  La.  Ann.  302), 

310,  314. 
Oulds  V.  Harrison  (10  Exch.  572), 

198,  295. 
Outhwaite    v.   Luntley    (4    Camp. 

179),  394. 
Outhwite  V.  Miner  (13  Mich.  533), 

168,  170. 
Overlee  v.  Smith  (86  Pa.  St.  221), 

303. 
Overman  v.  Hoboken  City  Bk.  (31 

N.  J.  L.  563),  217,  449. 
Overton  v.  Bolton  (9  Heisk.  762), 

412,  506. 
Overton  v.   Hardin  (6  Cold.  376), 

292. 
Overton  v.  Mathevrs  (35  Ark.  147), 

28,  283,  394. 
Overton  v.  Tyler  (3  Barr.  346),  29c. 
Owen  V.  Branch  Bk.  (3  Ala.  258), 

463. 
Ov^-en  V.  Homan  (3  Eng.  L.  &  Eq. 

125),  424. 
Owen  V.  Iglanor  (4  Cold.  15),  227. 
Owen  V.  Lavine  (14  Ark.  389),  227. 
Owen  V.  Long  (112  Mass.  403),  47, 

48. 


Owen  V.  Moody  (29  Miss.  79),  148. 
Owen  V.  Perry  (25  Iowa,  412),  35. 
Owen  V.  Van  Uster  (10  C  B.  (70  E. 

C.  L.  R.)  318),  219. 
Owens  V.  Dickinson  (1  Craig  &  Ph. 

48),  62. 
Owens  V.  Porter   (4  C.  &  P.  367), 

179. 
Owenson  v.  Morse    (7  T.   R.  50), 

380,  464,  466. 
Owings  V.   Arnot   (33  Miss.   406), 

394. 
Owings  V.  Baker  (54  Md,  82),  270, 

272. 
Owis  V.  Kimball   (3  N.  H.  314),  50. 
Oxford  Bk.  v.  Haynes  (8  Pick.  423), 

421. 
Oxford  Bk.  v.  Lewis  (8  Pick.  458), 

425. 
Oxford  Iron  Co.   v.  Spradley   (46 

Ala.  98),  115,  198. 

P. 

Pace  V,  Robertson  (65  N.  C.  550), 

426. 
Pacific  Bk.  v.  Mitchell  (9  Met.  297), 

375. 
Pack  V.  Thomas  (13  Sra.  &  M.  11), 

442. 
Packard  v.  Lyon  (5  Duer,  82),  314. 
Packard  v.  Nye  (2  Met.  47),  123. 
Packard  v.  Richardson   (17  Mass. 

22),  418. 
Page  V.  Gilbert  (60  Me.  488),  346. 
Page  V.  Morrell  (3  Abb.  App.  433), 

283. 
Page  V.  Newman  (M.  &  M.  79) ,  33 . 
Page  V.  Page  (24  Mo.  596),  507. 
Page  V.  Pi-entice  (5  B.  Mon.  7),  342. 
Page  V.  Webster  (15  Me.  249),  314, 

424. 
Paice  V.  Walker  (L.  R-  5  Ex.  173), 

124. 

923 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Paige  V.  Stoue  (10  Met.  1(50),  78,  85. 
Pain  V.   Packard    (13  Johns.  174), 

424. 
Palmer  v.  Dodge  (4  Ohio  St.  21), 

107. 
Palmer  v.  Fahnestock  (9  Up.  Can. 

C.  P.  172),  28. 
Palmer  v.  Grant  (4  Conn.  389),  13. 
Palmer  v.  Gray  (6  Gray,  340),  25. 
Palmer  v.    Hummer    (10  Kansas, 

464),  25. 
Palmer  v.  Largeut  (5  Neb.  223),  285. 
Palmer  v.   Marshall   (60  111.   289), 

280. 
Palmer  v.  Nassau  Bk.  (78  111.  380), 

266,  303. 
Palmer  v.  Pratt  (2  Bing.  185),  25. 
Palmer  v.  Richards   (1  Eng.   L.  & 

Q.  259),  168. 
Palmer  v.  Stephens  (1  Denio,  471), 

12,84,  265. 
Palmer  v.  Whitney  (21    Ind.    61), 

303. 
Palmer  v.  Yarrington  (1    Ohio  St. 

253),  506. 
Pannell  v.  Hurley  (2  Collyer,  241), 

447. 
Pape  V.  Palmer   (16  Cal.  168),  293. 
Parcel  v.  Barnes  (25  Ark. 261),  135. 
Pardee  v.  Fish  (60  N.   Y.  265),  29, 

486,  488. 
Paris  V.  Moe  (60  Ga.  90),  374. 
Parish    v.   Stone   (14  'Pick.   198), 

160,  252. 
Park  Bk.  v.  Watsou  (42  N.  Y.  490), 

166, 169. 
Parker  v.   Burgess  (5  R.    I.  277), 

100. 
Parker  v.   Carter    (4  Munf.   273), 

159. 
Parker  v.  City  of  Syracuse  (31  N. 

Y.  376),  5. 
Parker ».   Cousins  (2  Gratt   372), 

107. 

924 


Parker^  r.  Davis  (8  Jones    (N.  C.) 

460),  52. 
Parker  v.  Gordon    (7  East,    385), 

214,  227,317,  337,  341. 
Parker  v.  Greele  (2   Wend.   545), 

226. 
Parker   v.   Leigh  (2  Stark.     228), 

232. 
Parker  ».  Lewis   (39  Texas,  394), 

230. 
Parker    v.     Macomber    (18    Pick. 

505),  107,  108,  262. 
Parker  v.  Marston    (27  Me.    196), 

2.52. 
Parker  v.  Roser  (73  Ind.  598),  34c, 

451. 
Parkhurst  v.  Vail  (73  111.  343),  270, 

417,  424. 
Parkin  v.  Carruthers  (3Esp.248), 

106. 
Parkin  v.  Moon    (7  C.  &  P.  (32  E. 

C.  L.  R.)  408),  269. 
Parks  V.  Duke  (2   McCord,   380), 

32. 
Parks  V.   Ingram    (22  N.  H.  283), 

422,  426. 
Parmelee  v.  Daun  (23   Barb.  461), 

305. 
Paruell  v.  Price  (3  Rich.  121),  424. 
Parr    v.   Jewell    (16    C.    B.    684), 

295. 
Parr  v.  Eliason  (1  East,  92),  196. 
Parrott  v.    Colby    (71    N.  Y.  597), 

379. 
Parrott     v.    Farnsworth     (Brayt. 

174),  203. 
Parry  v.    Spikes    (49     Wis.   385), 

418. 
Parshley  v.   Heath    (63    Me.    90), 

363. 
Parsons   v.  Alexander  (5  El.  &  Bl. 

263),  178. 
Parsons  v.  Jackson  (99  U.  S.  434), 

473,  475. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Partridge  v.  Badger  (25  Barb.  146), 

115,  122, 
Partridge  v.  Colby  (19  Barb.  248), 

13. 
Partridge  v.  Davis  (2  Vt.  449),  264, 

419. 
Partridge  v.  Stocker    (36  Vt.  108), 

61. 
Passmore  v.  North  (13  East,  517), 

11. 
Possumpsic  Bk.  v.   Goss  (31   Vt. 

315),  286. 
Patch  V.  Wheatlaud  (8  Alleu,  102), 

103. 
Paton  V.  Coit  (5  Mich.  505),  178, 198. 
Paton  v.  Winter    (1  Taunt.   422), 

227. 
Patience  v.  Townley  (2  J.  P.  Smith, 

224),  354. 
Patrick  v.  Beazley  (6  How.  (Miss.) 

609),  339,  343. 
Pattee  v.  McCrillis    (53   Me.  410), 

327. 
Patten  v.  Ash    (7   Serg.  &  R.  116), 

455. 
Patten  u.  Gleason  (106  Mass.  439), 

300. 
Patten  v.  Merchants   Ins.   Co.  (40 

N.  H.  375),  299. 
Patterson  v.   Pagan    (38  Mo.  70), 

393. 
Patterson  v.  Gaudasequi  (15  East, 

62),  87. 
Patterson  v.  McNeely  (16  Ohio  St. 

348),  394. 
Patterson  v.  Poindexter  (6  Watts 

&  S.  235),  23,486. 
Patterson  v.    Robinson    (1  Casey, 

81),  62. 
Patterson  v.  Todd  (18  Pa.  St.  486), 

256,  273,  310. 
Pattison  v.  Hull  (9  Cow.  747),  377. 
Patten  V.  Melville  (21  Up.  Can.  Q. 

B.263),  17. 


Patton  V.  State  Bk.  (2  Nott  &  Mc- 

Cord,  464),  467. 
Patts  V.  Bell  (8  T.  R.  548),  66. 
Paul  V.  Beri-y  (78  111.  158),  83,  426. 
Paul  V.  Edwards  (1  Mo.  30),  89. 
Paulette   v.   Brown    (40  Mo.    54), 

166. 
Payne  v.  Bensley  (8  Cal.  260%  168. 
Payne  v.  Caswell    (68  Me.  80),  412. 
Payne  v.  Clark  (19  Mo.  152),  28. 
Payne  v.  Commercial  Bk.  (6  Sm.  &. 

M.  24),  424,  425. 
Payne  v.   Cutter  (13  Wend.   605), 

169,  202. 
Payne  v.  Eden  (3  Caines,  213),  193. 
Payne  v.   Flournoy  (39  Ark.  500), 

148. 
Payne   v.  Gardner  (29   N.  Y.  146), 

488. 
Payne  u.  Jenkins  (4  Car.  &.  P.  325), 

23. 
Paysant  v.  Ware  (1  Ala.  160),  10. 
Peabody  v.  Peabody  (69  lud.  556), 

159. 
Peabody  v.   Rees    (18   Iowa,   171), 

295. 
Peacocks.  Purcell  (14  C.  B.  (x.  s.) 

728), 304,  334. 
Pearce  u.  Davis  (1  Moo.  &  R.  365) » 

455,  456. 
Pearl  v.  McDowell  (3  J.  J.  Marsh 

658),  52,  54. 
Pearsall  v.   Dwight  (2   Mass.  84), 

506. 
Pearse  ?;.  Wellborn   (42   lud.  331), 

123. 
Pearson  v.  Chapin   (8   Wright,  9), 

398. 
Pearson  v.  Bank  of  Metropolis  (1 
.     Pet.  89),  318. 
Pearson   v   Crallan  (2  J.  P.  Smith, 

404),  341. 
Pearson    v.    Cummiugs    (28  Iowa, 

344),  204. 

925 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Pearson   v.  Garrett   (4    Mod.  242), 


Pearson  v.  Stoddard  (1>  Gray,  199), 

272,  273. 
Pease  v.  Cornish  (19  Me.  193),  140, 

141. 
Pease  v.  Gloahec  (1  Privy  C.  App. 

219),  493. 
Pease  v.  Hirst  (10  B.  &  C.  122),  163, 

247. 
Pease  v.    Pease  (35  Conu.  131),  87, 

123. 
Pease  v.  Warren  (25  Mich.  9),  312, 

374. 
Peaslee  v.  Robins  (3  Met.  164),  56. 
Peasley  v.   Boatwright    (2   Leigh, 

190),  32,  152. 
Peck  V.  Cochran  (7  Pick.  35),  223. 
Peck  V.  Hozier  (14  Johns.  346),  506. 
Peck  V.  Mayo  (14  Vt.  33),  511. 
Peck  V.  Eequa  (13  Gray,  407),  173, 

186. 
Peckhara  v.  Gilman  (7  Minn.  449), 

270,  272,  310. 
Peden  v.  Moore  (1  Stew.  &  P.  71), 

201. 
Peet  V.  Zanders  (6  La.  Ann.  364), 

359. 
Peets  V.  Bratt  (6  Barb.  662),  34. 
Pekin  v.  Reynolds  (31  111.  531),  474, 

475,  476. 
Penard  v.  Klochmau  (32  L.  J.  Q,  B. 

83),  4. 
Pendleton  v.  Bk.  of  Kentucky  (1  T. 

B.  Mon.  179),  120. 
Pendleton  v.  Fay  (2  Paige  Ch.  202), 

305. 
Pendleton   v.    Knickerbocker    Life 

Ins.  Co.  (7  Fed.  Rep.  170),  315. 
Pendleton  Co.   v.   Amy    (13  Wall. 

297),  480,  481,  482. 
Pennr.  Bennett  (4  Campb.  205),  162. 
Peun  V.  Hamlet  (27  Gratt.  337),  35. 
Peuu  r.  Harrison  (3T.  R.  759),  466. 
92»i 


Pennington  v.  Baehr  (48  Cal.  505), 

12a. 
Pennington  v.  Gittings  (2  Gill  &  J. 

208),   159. 
Pennock    v.    Coe    (23   How.    130), 

471. 
Penny  v.  Innes  (1  Cr.  M.  &  R.  439), 

14. 
Peutz  V.  Simeon  (2  Beasley,  232), 

02. 
Peutz  V.  Stanton  (10  Wend.  271), 
•  85,  87. 
People  V.  Auditors  (5  Mich.  223), 

251. 
People  V.  Baker   (20  Wend.    602), 

455,  456, 
People  V.  Bostwick  (32  N.  Y.  450), 

34d. 
People  V.  Gray  (23   Cal.  125),  135, 

138,  242. 
People  V.  Halden  (85  HI.  93),  480. 
People   V.  Howell  (4  Johns.   296), 

455. 
People  V.  McDermott  (8  Cal.  288), 

31,  152. 
People  V.  Mead  (24  N.  Y.  124),  475, 

480,  482. 
People  v.  Organ  (27  HI.  29),  35. 
People  V.  Sup.  of  Eldorado  Co.  (11 

Cal.  175),  135. 
People  V.  Tazewell  Co.  (22  HI.  151), 

475. 
People  V.  Township  Board  of  Salem 

(20  Mich.  452),  481. 
People's   Bk.  v.  Bogart  (81  N.  Y. 

101),  244. 
People's  Bk.  v.  Brooke  (31  Md.  7), 

320,  318. 
People's    Bk.  v.    Gridley    (91    HI. 

457),  497. 
People's  Bk.  v.  Keech  (26  Md.  521), 

336. 
People's   Bk.   v.    Pearson    (30  Vt. 

711),  424. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Peoria  R.  R.  Co.   v.   Neill  (16  111. 

269),  230. 
Pepoor  V.  Stagg  (1  Nott  &  McCord, 

102),  23,  39i. 
Percival  v.   Framptou  (2  C.  M.  & 

R.  180),  168. 
Terdon  v.   Joues  (2   E.  D.  Smith, 

106),  163. 
Perfect  v.  Murgrave  (6  Price,  111), 

232,  311,  422. 
Perkins  v.  Barstow  (9  R.  I.  507), 

270,  273. 
Perkins  v.  Catlin  (11  Conn.    213), 

2576,  272,  ^IS. 
Perkins  v.  Cummings  (2  Gray,  258), 

179. 
Perkins  v.  Franklin  Bk.  (21  Pick. 

483),  315,  464. 
Perkins   v.   Prout  (47  N.  H.   387), 

303. 
Perkins  v.  White  (36  Ohio  St.  530), 
■  299,  357. 
Perreira  v.  Jopp  (10  B.  &  C.  450), 

217. 
Perries  v.  Aycinena  (3  Watts  &  S. 

64),  80. 
Perrint;.  Keene  (19   Me.  355),  107. 
Perrin  v.  Noyes  (39  Me.  384),  303. 
Perring  v.  Hone  (2  C.  &  P.  401), 

102,  394. 
Perry  v.  Barrett  (18  Mo.  140),  415. 
Perry  r.  Bigelow  (128  Mass.  129), 

26,  40. 
Perry  v.  Crammonds    (1  Wash  C. 

C.  100),  34. 
Perry  v.  Hadnett  (38  Ga.  104),  422. 
Perry  V.  Harrington  (2  Met.  368), 

227. 
Perry  v.  Taylor  (1  Utah,  63),  412. 
Peru  V.   Farnsworlh  (18  111.  563), 

29. 
Peruvian  R.  R.  v.  Thames  &  Mersey 

Mut.  Ins.  Co.  (L.  R.  2  Ch.  617), 

115. 


Peters   v.   Beverley    (10  Pet.  5S,V - 

379. 
Peic.rs  V.  Femi'  j  (6  M.  &  W.  41'-   - 

46. 
.Peters  v.  Ilobbs  (25  Ark.  67),  342, 

354. 
Petersen    v.    Hubbarl   (28    Mich, 

197),  223. 
Peterson  v.  Mayor  of  J  few  York  (17 

N.  Y.  453),  83. 
Petit  V.  Benson  (Curaberbach,  452), 

227. 
Peto  V.  Reynolds  (9Exch.  410),  15, 

219. 
Petrie  v.  Hannay  (3  P.  R.  418),  198. 
Pettilou  V.  Noble  (73  111.  507),  305. 
Petty  V.  Fleispel  (31  Texas,  169). 

27. 
Petty  V.  Hinmau  (2  Humph.  102), 

291,  293. 
Peyton  v.  Hallett  (1  Caines,  363),  5. 
Pfeiffer  v.  Kingsland    (25  Mo.  66), 

157.' 
Ptiel    V.    Vanbatenberg   (2   Camp. 

439),  373. 
Phelan  v.  Moss    (67  Pa.   St.   62), 

289,  291,  397. 
Phelps    V.   Dennett  (57  Me.  491), 

162. 
Phelps  V.   Northrup  (56   HI.  156), 

222. 
Phelps  V.   Phelps    (28   Barb.  121), 

160. 
Phelps  V.  Town  (14  Mich.  374),  29. 
Phelps  V.  Pond  (23  N.  Y.  69),  160, 

252. 
Phelps  V.    Vischer  (50  N.    Y.  69), 

271. 
Philadelphia     Bk.   v.   Newkirk     (2 

Miles,  442),  28. 
Philadelphia  Loan  Co.  v.   Towner 

(13  Conn.  249), 118. 
Philadelphia,    etc.,   R.    R.    Co.   v. 

Fidelity  Co.  (105  Mass.  216),  117. 
927 


TAIJLE    OF    CASES    CITED. 


References  are  to  Sections. 


Philadelphia,   etc.,   R.    R.    Co,    v. 

Smith  (105  Pa.  195),  117. 
Philipe  V.  Haberlee  (45   Ala.  COS), 

339. 
Phillips  V.   Aklerson    (5    Humph. 

403),  340. 
Phillips  V.  Astberg  (2  Taunt.  20(J), 

313. 
Phillips  V.  Astliug  (2  Tauut.  200), 

213. 
Phillips   V.  Bullard    (58   Ga,   25(i), 

421,  456. 
Phillips    V.   Cockagne    (3    Garapb. 

119),  19G. 
Phillips  V.  Dugan  (21  Ohio  St.  406), 

375. 
Phillips  V.  Frost  (19  Me.  77),  223. 
Phillips   V.  Gould  (8   C.  &  P.  355), 

344,  346. 
Phillips  V.  Howell  (00  Ga.  411),  80. 
Phillips  V.  Im.  Thurn  (1  C.  P.L.  R. 

463),  50a. 
Phillips  V.   lutheru   (18   J.   S.  (». 

8.)   (114  E.  C.  L.  R.)   694;    s.  c. 

(18  C.  B.  (X.  s.)  694),  19. 
Phillips  V.  McCurdy  (1   Har.  &  J. 

189),  321. 
Phillips  V.  Moses  (65  Me.  70),  377. 
Phillips  V.  Paget  (2  Ark.  80),  49. 
Phillips  V.    Poindexter     (18    Ala. 

579),  327,  313. 
Phillips   V.  Prestou  (5   How.  278), 

201,  426. 
Phillips  V.  Stagg  (2  Edw.  Ch.  108), 

5c,  452. 
Phillips  V.  Thurn  (18  C.  B.  (x.  s.) 

094),  231. 
Philliykirk  v.  Plackwell  (2   Maule 

&  S.  399),  63,  64,  263. 
Philpott  V.  Bryant  (3  C.  &  P.  244), 

211,313,  314, 
Phili)0tt  V.  Jones  (2  A.  E.  41),  377. 
Phinuey  v.  Baldwin   (16   HI.  108), 

412. 

028 


Ph<jenix  Bk.  v.   Hussey    (12  Pick. 

483),  3,  321. 
Phosnix  Ins.  Co.  v.  Allen  (11  Mich, 

501),  215,  216,  381. 
Phcenix   Ins.  Co.  v.  Church  (81  N. 

Y.  225),  105,  169,  379. 
Phcenix  Ins,  Co.  v.  Gray  (13  Mich, 

191),  210, 
Pickering  v.  Busk  (15  East,  38),  81. 
Pickett  V.  Sutter  (5  Cal,  412),  57, 
Picquct  V.  Curtis   (1    Sumn,   478). 

310,  312. 
Pierce    v.    Crafts  (12    Johns.  90), 

243. 
Pierce  v.  Drake  (15  Johns.   475), 

380. 
Pierce  v.  Gilson  (9  Vt.  216),  373. 
Pierce  v.  Goldsbury  (31    Ind.  52), 

424. 
Pierce  v.  Johnson  (34  Conn.  274), 

87. 
Pierce  v.  Kennedy  (5  Cal.  138), 270, 

310. 
Pierce  v.  Knight  (31  Vt.  701),  377. 
Pierce    v.   Kittredge     (115    Mass. 

374),  170,  222, 
Pierce  v.  Pendar  (5  Met,  352),  338. 
Pierce  v.  Rowe  (1  N,  H,  179),  196. 
Pierce     v.   Strathers    (27     Pa.    St. 

249),  342,  344. 
Pierce  v.  U.  S.  (1  N,  H,  270),  136. 
Piercy  v.  Piercy  (5  W,  Va,    199), 

393. 
Piersol   v.  Grimes    (30   Ind,    129), 

392. 
Pierson    v.    Dunlap    (Cowp.   571), 

225,  220, 
Pierson  v.  Wallace  (2  Eng.  (Ark.) 

282),  404. 
Pike  V.  Irvin  (1  Sandf,  14),  222.    . 
Pilkinton      v.    Commissioners    of 

Claims  (2  Knapp,  17),  375, 
Pilkinton  v.  Woods    (10   Ind.  432) 

210. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Pillaus    V.   Vau   Mierop    (3  Burr. 

lt>(J3),  155,  222,  226,  228. 
Pillow  V.   Hardeman    (3    Humph. 

538),  33G. 
Pilmer    v..  Branch  Bk.    (16   Iowa, 

321),  29. 
Priudall  v.   N.   W.   Bk.    (7 1.eigh, 

617),  460. 
Pindar  v.  Barlow  (31  Vt.  539),  155. 
Pine  V.  Smith  (11  Gray,  38),  298. 
Piuer  V.  Clary  (17  B.   Mon.    645), 

321,  315. 
Pines  V.  Ely  (4  McLean,  173),  273. 
Pinkerton  v.  Bailey  (8  Wend.  600), 

269. 
Pinkerton  v.  Manchester  R.  R.  (42 

N.  Y.  424),  497. 
Pinkerton  v.   Marshall   (2   H.   Bl. 

334),  220. 
Pinkham  v.  Macy  (9  Met.  174),  346. 
Pinkney  v.  Hall  (1  Salk.  126),  219. 
Pinney  v.  Callendar  (8  Minn.  42), 

34c. 
Pintard  v.   Packington  (10  Johns. 

104),  866. 
Pitkin  V.  Prink  (8  Met.  12),  204. 
Pitman  v.  Breckenridge    (3  Gratt. 

129),  334. 
Pitman  t?.  Crawford  (3  Gratt.  127), 

26. 
Pitman  v.  Keutner  (5  Blackf.  250), 

123,  124. 
Pitt  V.  Chappelow  (8  M.  &  W.  616), 

230. 
Pitt  V.   Pussord   (8  M.  &  W.  538), 

426. 
Pitt  V.  Smith  (3  Camp.  33),  57. 
Plant  r.  Voeglin  (30  Ala.  160),  288. 
Planter's  Bk.  Bradford  (4  Humph. 

39),  342. 
Planters  Bk.  v.  Cameron  (3  Smed. 

&  M.  609),  80. 
Planters  Bk.  ».  Douglass  (2  Head, 

699),  209. 


59 


Planters   Bk.   v.    Keese    (7   Ileisk. 

200),  432,  433,  442,  452. 
Planters  Bk.  v.  Markham  (5  How. 

(Miss.)  397),  317. 
Planters  Bk.   v.   Merrit  (7   Heisk. 

117),  452. 
Planters  Bk.  v.  Sharp  (6  How.  301), 

118. 
Planters  Bk.  v.  Union  Bk.  (16  Wall. 

483),  198. 
Planters  Bk.   v.  White  (2  Humph. 

112),  336. 
Planters  Bk.,  etc.,  v.  Ervin  (31  Ga. 

377),  119. 
Planters  Bk.,  etc.,  Evans  (36  Texas, 

592),  20. 
Planters  Bk.,etc.,  v.  First  Nat.  Bk. 

(75  N.  C.  534),  89. 
Piatt  V.  Beebe  (57  N.  Y.  339),  163, 

304. 
Piatt  V.  Jerome  (2  Blatchf.  C.  C. 

186),  288. 
Piatt  V.  Sauk  Co.  Bk.  (17  Wis.  222), 

29. 
Plets  V.  Johnson   (3  Hill  (N.  Y.) 

115),  19. 
Plock  V.  Cobb  (64  Ala.  156),  132, 473. 
Plummer   v.  Lyman   (49  Me.  229), 

222. 
Pogue  V.  Clark  (25  111.  336),  13. 
Polhill  V.  Walter  (3  B.  &  Ad.  114), 

84,  105,  219. 
Police  Jury  v.   Britton    (15  Wall. 

566),  133,  135. 
Polk  V.  Spinks  (5  Cold.  531),  354. 
Pollard  V.  Bowen  (57  Ind.  234),  442. 
Pollard  V.  Herries  (3  B.  &  P.  335), 

28,  410. 
Pollard  V.  Scholey  (1  Saund.  294), 

196. 
Pollock  V.  Bradbury  (8  Moore  P.  C. 

227),  273. 
Pollock  V.  Helm  (55  Miss    1),  226, 

500. 

929 


TABLE    OF    CASKS    CITED. 


References  are  to  Sections. 


Polo   Manf.    Co.   v.   Parr    (8   Neb. 

379),  41, 
Pomeroy  v.  Aiusworth    (22  Barb. 

118),  506. 
Pomeroy  v.  Rice  (16  Pick.  22),  379. 
Pomeroy  v.  Slade  (16  Vt.  220),  124. 
Pomeroy  v.  Tauuer  (70  N.  Y.  547), 

230. 
Pomptou  V.   Cooper  UuioQ  (101  U. 

S.  204),  482. 
Pond  I'.  Underwood  (2  Ld.  Raym. 

1210),  447. 
Pond  V.    Waterloo  Agric.   Work.s 

(50  Iowa,  695),  165,  289. 
Pond  V.  Williams    (7   Gray,  630), 

377. 
Pons  V.  Kelly  (2  How.  45) ,  355. 
Poock  V.  Lafeyette  Building  Assn. 

(71  Ind. 357),  118. 
Poof  v.  Stafford  (7  Cow.  179),  47. 
Poole  V.  Eice  (9  West  Va.  73),  85, 

379. 
Poole  V.  Wiiliams  (42  Ga.  539),  145. 
Pooley  V.  Harradine  (7  E.  &B.431) 

422. 
Poorraan   v.  Mills    (39   Cal.    345), 

296,486. 
Pope  V.  Bank  of  Albion  (57  N.  Y. 

126),  82, 120,  437,  438. 
Pope  V.  Hayes  (19  Texas,  170),  204. 
Pope  V.  Lynn  (50  Me.  86),  34c. 
Poplewellr.  Wilson  (1  Stra.  264), 

31,  152,  170. 
Popley  V.  Ashlin  (6  Mod.  147),  244, 

380. 
Porter  v.  Androscoggin,  etc.,  R.  R. 

Co.  (37  Me.  349),  117. 
Porter  v.  City  of  Janesville  (3  Fed. 

Rep.  619),  21,  474. 
Porter  v.   Cushman  (19  111.    572), 

266,  374. 
Porter  v.    Havers  (37  Barb.   343), 

183. 
Porter  V.  .Jones  (52  Mo.  399),  186. 
930 


Porter  v.  Judson  (1  Gray,  17.5),  314, 

359. 
Porter  v.  Kemball  (53  Barb.  867), 

363. 
Porter  v.  Neckervis  (4  Riind.  359), 

262. 
Porter  v.  Porter  (51  Me.  376),  24. 
Porter  v.  Talcott  (1  Cow.  381),  379. 
Porthouse  v.  Parker  (1  Camp.  82), 

356, 
Portland,  etc.,  R.  R.  Co.  v.  Hart- 
ford (58  Me.  23),  480. 
Posey  v.  Decatur  Bk.  (12  Ala.  802), 

318, 
Posten  V.  Rassette  (5  Cal.  467),  80. 
Potter  V.  Merchants  Bk.  (28  N.  Y. 

641),  120, 
Potter  V.  Rayworth  (13  East,  417), 

363, 
Potter  V.  Strausky  (48  Wis.  244), 

249. 
Potter  V.  Tallman  (35  Barb,  182), 

511. 
Potter  V.  Tyler  (2  Met.  58),  266. 
Pottenger  v.  Stewart   (3  Harr.   & 

Jay,  347),  47. 
Potts  V.  Henderson  (2   Ind.  327), 

136. 
Potts  V.  Mayer  (74  N.  Y.  594),  169. 
Potts  V.  Read  (6  Esp.  57),  268. 
Powell  V.  Commonwealth  (11  Graft. 

822),  391. 
Powell  V.  Duff   (3  Camp.  182),  35, 

283. 
Powell  V.  Henry  (27  Ala.  612),  304. 
Powell  u.  Inman  (7  Jones,  28),  178, 

193. 
Powell  V.  Jones  (1  Esp.  17),  223. 
Powell  V.  Monnier  (1  Atk.  611),  220, 

226. 
Powell  V.  Murray  (2 Edw.  Ch.  636), 

62. 
Powell  V.  Smith    (66  N.    C.   401), 

184. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Powell  V.  Waters    (8    Cow.    669), 

346,   292,  (17    Johns.  176),   295, 

301,  316,  424. 
Power  V.   Bumcrauz  (12  Ohio  St. 

284),  420. 
Power  r.  Fimiie  (4  Call,  411),  268. 
Power  V.  Hathaway  (43  Barb.  314), 

506. 
Powers  V.  Briggs  (79  111.  493),  123. 
Poweft   V.  French    (1  Hun,    582), 

158. 
Powers  V.  Neeson  (19  Mo.  190) ,  269. 
Poydi'as  v.  Delaraere  (13  La.  (o.  s. 

1838)  98),  5a. 
Prall  V.  Tilt  (28  N.  J.  Eq.  480),  497. 
Prather  v.  Gammon  (25  Kan.  379), 

424. 
Pratt  1-.  Beaupre  (13  Minn.  187),  87, 

(13  Minn.  190),  123. 
Pratt  V.  Coraan  (37  N.  Y.  440),  164, 

166,  169. 
Pratt  V.  Foote  (12  Barb.  212),  379, 

449. 
Pratt  V.  Hedden   (121  Mass.  116), 

156,  157. 
Pratt  V.  Tliomas  (2  Hill,  654),  242, 

2.576. 
Pratt  V.  Trustees   of  Baptist  Soc. 

(93  Dl.  475),  161. 
Prehn  v.   Royal   Bk.  of  Liverpool 

(L.  R.  6  Exch.  92),  408. 
Prentice   v.    Zane    (2    Gratt.  262), 

168,  295. 
Prentiss  V.  Danielson  (5  Conn.  175), 

257ft,  362. 
Prentiss  v.  Savage  (13  Mass.  23), 

506. 
Prentiss  v.  Sinclair  (5  Vt.  149),  106. 
Prescott  V.  Fliun  (9  Bing.  19),  77, 

79,  230. 
Prescott  V.  Hull    (17  Johns.  284), 

242. 
Prescott  V.  Ward  (10  Allen,  203), 

174,  183. 


Prescott  Bk.   v.   Caverly  (7  Gray, 

217),  63,  215,  216,  259,  273. 
Preston  v.  Hull  (23  Gratt.  602),  35, 

474. 
Preston  v.  Jackson  (2  Stark.  237), 

180. 
Preston  v.  Mo.,  etc..  Lead  Co.   (31 

Mo.  45),  119. 
Preston  v.  Morris  (42  Iowa,  549), 

305. 
Preston  v.  Wliitney  (23  Mich.  260), 

26. 
Prestwick  v.  Marshall  (7  Bing.  565), 

74,  262. 
Prettyman  v.   Supervisors  (19  111. 

406),  481. 
Prettyman  v.  Tazewell  Co.  (19  111. 

406),  475. 
Price  V.  Dunlap  (5  Cal.  483),  366. 
Price  V.  Edmunds  (10  B.  &  C.  578), 

232,  321,  341,  422,  424. 
Price  V.  Keen  (40  N.  J.  L.  332),  154. 
Price  V.  Lavender  (38  La.  Ann.  389), 

261,  271,  273. 
Price  V.  Neal  (3  Burr.  1354),  230. 
Price  V.  Page  (24  Mo.  67),  507. 
Price  u.  Price    (16  M.  &  W.  232), 

379,  381. 
Price  V.  Sanders  (60  Ind.  310),  46, 

183. 
Price  V.  Taylor  (5  H.  &  N.  580),  124. 
Price  V.  Teal  (4  McLean,  201),  28. 
Price  V.  Torrington  (1  Salk.  285), 

348. 
Price  V.  Trusdell  (28  N.  J.  Eq.  20), 

261. 
Price  V.   Young   (1   Nott  &   McC. 

438),  313,  337. 
Prideaux  v.  Collier   (2  Stark.  57), 

218,  355. 
Pridgen  v.  Andrews  (7  Texas,  461), 

412. 
Priest  V.  Watson  (7  Mo.  App.  578), 

415. 

931 


TABLE    OK    CASES    CITED. 


References  are  to  Sections. 


Prince  v.  Bruuatte    (7  Biug.  N.  C. 

435),  262. 
Pring  V.  Clarkson  (1  B.  &  C.  14), 

1G7,  425. 
Pringle  v.  Phillips    (5  Saud.  157), 

289. 
Proctor  V.  Sears  (4  Alleu,  95),  50. 
Proctor  V.   Whitcomb    (137  Mass. 

303),  310. 
Protection  lus.  Co.  v.  Hill  (31  Conn. 

534),  24. 
Pruyne    v.    Milwaukee     (18    Wis. 

568),  412. 
Puffer  V.  Smith  (57  111.  527),  285. 
Puget  de  Bras  v.  Forbes    (1  Esp. 

117), 154, 155. 
Pulleu    V.    Chase    (4    Ark.     210), 

310. 
Purcell    V.   Allemong    (22     Gratt. 

742),  442,  452. 
Purchase    v.   Mattison    (3    Bosw. 

310),  165,  301,  348,  445. 
Puryear  v.    McGavock   (9    Heisk. 

461),  184,  198. 
Putnam  v.   Crymes  (1  McMull.  9), 

21,  243. 
Putnam   v.    Dyke  (13   Gray,    535), 

506. 
Putnam  v.  Lewis   (8  Johns.   389), 

380,  381. 
Putnam  «,  Schuyler   (4  Hun,  168), 

423. 
Putnam  v.  Sullivan    ("4   Mass.  45), 

283,  285,  358. 

Q. 

Quinby    v.   Buzzell    (16  Me.  470), 

33. 
Quin  V.  Hanford  (1  Hill,  82),  222. 
Quin  r.  Sterne    (26  Ga.   223),   264, 

272. 
Quinby     v.    Merritt    (11    Humph. 

439,  440),  18,  29. 

932 


Quincy,  etc.,  K.  R.    Co.    v.  Morris 

(84  111.  410),  481. 
Quinu  V.    Heard  (43  Vt.   375),  168, 

301. 

R. 

Raborg  w.   Peyton  (2   Wheat  385), 

220,  230. 
Railroad  Co.   v.  Chamberlaine    (44 

New  Hamshire,  497),  155(il70. 
Railroad  Co.  v.  Evansville  (15  Ind. 

395),  134,  480. 
Railroad  Co.   ».  Howard  (7  Wall. 

415),  497. 
Railroad  Co.  v.  Otoe  C«.  (16  Wall. 

667),  481. 
Railroad   Co.  v.  Schutte  (103  U.  S. 

145),  259,  293. 
Railway  v.  Cleaneay  (13  Ind.  161), 

471,  473. 
Raiubolt  v.  Eddy    (34  Iowa,  440), 

397. 
Rainboth  v.  Pitsburg    (5    Wright, 

284),  134. 
Ralli  V.  Dennison    (6   Exch.   483), 

221. 
Ralston   v.  Bulitts    (3    Bibb,  261), 

385. 
Rait     V.    Watson    (4    Bing.    273), 

366. 
Ramsdale    v.    Horton,  (3  Pa.     St. 

330),  466. 
Ramsdell    v.   Morgan     (16   Wend. 

574),  178,  280. 
Rarauz  v.   Crowe    (1    Exch.    167), 

366. 
Randv.  Dovey  (83  Pa.  St.  280),  32, 

257. 
Rand  v.  Hubbard    (4    Met.     252), 

262. 
Rand  v.    State  of  N.  C.   (77   N.  C. 

175),  300. 
Randall  v.  Sweet    (1  Denio,  460), 

46. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Randolph  v.  Parish  (9  Porter,  76), 

20. 
Randolph  v.  Peck    (1    Hun,    125), 

170. 
Raney  v.  Winter  (37  Ala.  277),  85. 
Ranger  w.  Carey  (I  Met.  369),  248, 

2G9,  296. 
Ranger  v.  Sargent  (36  Texas,  26) , 

416. 
Rankin  v.  Childs  (9  Mo.  674),  420. 
Rankin  v.  Roler  (8  Gratt.  63),  32. 
Ranklin  v.  Wegnelin  (27  Beav.  309), 

252. 
Ransom  v.  Mack  (2  Hill,  587),  343, 

346,  359. 
Ransom  v.  Miner  (3  Sandf.  692), 

251. 
Ransom    v.    Sherwood    (26   Conn. 

437),  2576,  270. 
Ransom  v.  Tiirley    (50   lud.  273), 

158. 
Rapeleye  v.  Barley  (3  Conn.   438), 

420. 
Raper  v.   Birkbeck  (15  East,  17), 

232. 
Raphael  v.  Bk.  of  England  (33  Eng. 

L.  &  Eq.  278),  289,  464. 
Rastell  V.  Draper  (Yelv.  80),  434. 
Ratcliff  V.  Planters  Bk.   (2    Sneed, 

425),  213,  358. 
Rat.hbon  v.  Budlong  (15  Johhs.  1), 

84. 
Rawlinson  ?;.  Stone  (5  Wilson,  5), 

63  (3  Wilson,  1,  5),  63,   148,  262. 
Ray  V.   Indianapolis    Ins.   Co.   (39 

Ind.  290),  118. 
Ray  V.  Faulkner  (73  111.  469),  227. 
Ray  V.  McMillan  (2  Jones  L.  227), 

292. 
Ray  V.  Smith    (17  Wall.  418),  355, 

362. 
Ray  V.  Tabbs  (50  Vt.  688),  48. 
Raymond  v.  Baar   (13  Serg.  &  R. 

318),  466. 


Raymond  v.  Crown  &  Eagle  Mills 

(2  Met.  319),  87. 
Raymonds.  Holmes  (11  Texas,  55), 

507,  508. 
Raymond  v.  Mann  (45  Texas,  301), 

20. 
Raymond  v.  Merchant  (3  Cow.  150), 

381. 
Raymond  v.  Middleton  (29  Pa.  St, 

530),  21,2576. 
Raymond  v.  Sellick,  (10  Conn.  480), 

160,  252. 
Rayue  v.  Dills    (27  La.  Ann.  622), 

2C0. 
Rea  V.  Dorrance  (18  Me.  137),  355. 
Read  v.  Bk.  of  Kentucky  (1  T.  B. 

Mont.  91),  322. 
Read  v.  Cummings    (2   Greenleaf, 

82),  204. 
Read   v.   Cutts  (7  Greenleaf,  186), 

421. 
Read  v.  Legard   (6  Exch.  636),  54. 
Read  V.  Marsh  (5  B.  Mon.  8),  220, 

226. 
Read  v.  McNulty  (12  Rich.  445),  28. 
Read  v.  Norris  (14  Conn.  E.  C.  R. 

362),  426. 
Read  v.  Wheeler  (2  Yerg.  50),  23. 
Read  v.  Wilkinson  (2  Wash.  C.  C. 

514),  227. 
Reakert  v.  Sanford  (5   Watts  &  S. 

1G4),  74,  2C2. 
Reamer  v.  Bell  (79 Pa.  St.  299),  266. 
Reddick  v.  Jones  (6  Ired.  107),  165, 

168. 
Redington  v.  Wood  (45  Cal.  406), 

259,  303,  441,451. 
Redlick  v.  Doll  (54    '.  Y.  236),  282, 

283,  397,  474. 
Redlow  V.  Churchill  (73  Me.  146), 

100. 
Redman  ■».  Adams  (51  Me.  433),  26. 
Redman   v.  Deputy  (26  Ind.  388), 

424. 

933 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Redmayne   v.  Burton    (0  C.  B.  (x. 

8.)  -),  467. 
Reed  v.  Batchelder    (1    Met.  559), 

48,  50. 
Reed  v.  Boardmau  (20  Pick.  441), 

377. 
Reed  v.  Boshears    (4  Sneed,  118), 

50. 
Reed  v.  Evaus  (17  Ohio,  128),  418. 
Reed  v.  Lamar  (1  Strobh.  Eq.  27), 

62. 
Reed  v.  Roark  (14  Texas,  329),  12. 
Reed  v.  Ti;entnian    (53  Ind.    438), 

301. 
Reed   v.  Wilson  (41  N.  J.  L.  29), 

315,  316,  317. 
Reeder  v.   Brunner   (GO   Ga.   107), 

288. 
Reeder  v.   Carey    {"13   Iowa,   274), 

305. 
Reedy    v.    Seixas    (2  Jolins.    Cas. 

337),  345. 
Rees  W.Abbott  (Cowper,  832),  13. 
Rees  V.  Berrington  (2  Ves.  Jr.  540), 

422. 
Rees    V.     Conococheague    Bk.    (5 

Rand.  329),  266. 
Rees  V.  Warwick   (2  Bam.  &  Aid. 

113),  223. 
Reese  t>.  Gordon  (19  Cal.  147),  201. 
Reeve  v.   Pack  (6  Mich.  240),   30, 

227,  310. 
Reeves  v.  Pierson  (23  Hun,  (30  N. 

Y.  S.  C.)  187),  394. 
Reeves  v.   Scully    (Walk.    (Mich.) 

248),  305. 
Reg.  V.  Lord  (12  Q.  B.  757),  47. 
Reginau.  Havrkes  (2  Mo.  C.  C.  60), 

15. 
Reglna  v.  Sewell  (7  Mod.  118),  199. 
Regina  v.   Watts   (2   Denio,  C.  C. 

14), 455. 
Reid  V.  Coats  (Chitty  on  Bills,  434), 

334. 

934 


Reid  V.    Morrison    (2   Watts  &   S. 

401),  358. 
Reid  V.  Payne  (16  Johns.  218),  342. 
Reid  r.   Reid  (11  Texas,  .585),  443. 
Reigart  v.  White  (52  Pa.  St.  438), 

415. 
Reinbath  v.  Pittsburgh  (41  Pa.  St. 

278),  134,  480. 
Reiuicker  v.    Smith   (2   Harr.  &  J. 

421), 57. 
Renick  v.   Robbins    (28   Mo.  339), 

335. 
Renick  v.   Williams    (2  Md.   35^)), 

295. 
Renner    v.    Bk.    of    Columbia     (!) 

Wheat.  581),  315. 
Renshaw  v.  Gaus  (7  Barr.  117),  42. 
Renshaw  v.  Triplett  (23  Mo.  123), 

335. 
Renwick    v.   Bancroft    (56     Iowa, 

527),  89. 
Requar.  Collins  (51  New  York,  58), 

342. 
Revel  V.  Revel  (2  Dev.  &  Bat.  227), 

64. 
Rew  V.  Barber  (3  Cow.  279),  379. 
Rew   V.   Petet   (1   Ad.   &  El.  190), 

123. 
Rex  V.  Atkinson   (7  &  P.  669),  382. 
Rex  V.  Beckett  (Russ.  &  R.  86),  391. 
Rex  V.  Begg  (3  P.  Wms.  419),  264. 
Rex  V.  Box  (6  Taunt.  325),  17. 
Rex  V.  Elliott  (2  East  P.  C.  951), 

29fZ. 
Rex  V.  Hales  (17  State  trials,  161), 

.S91. 
Rex  V.  Hunter  (Russ.  &  Ry.  C.  C. 

511),  8. 
Rex  V.  Lambton  (5  Price,  428),  34a, 

250,  256. 
Rex  V.  Palmer    (Russ.  &  R.   C.  C. 

72),  391. 
Rex  V.   Parke    (2  Leach   Ct.  Law, 

614),  381,  391. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Kex  V.   Plumer  (Rus.   &  Ry.  2G4), 

348. 
Rex  V.  Past  (Russ.  &  R.  101),  391, 

392. 
Rexv.  Rogers  (8  C.  &  P.  629),  391. 
Rex  V.  Shukard  (Russ.  &  R.  200), 

391. 
Rex  V.  Treble  (2  Taunt.  328),  392, 

394. 
Rex  V.   Wilcox   (Bayley  on    Bills, 

11),  29. 
Rex  V.  Webb  (Russ  &  R.  C.  C.  72), 

391. 
Rey  V.   Kennear  (2   M.  &  R.  117), 

218. 
Reyu.  Simpson  (22  How.  350),  261, 

270,  272,  273. 
Reynolds    v.    Appleman    (41    Md. 

615),  327,  345,  346. 
Reynolds  v.  Burlington,  etc.,  R.  R. 

Co.  (11  Neb.  186),  151. 
Reynolds  v.  Chettle  (2  Camp.  596), 

313,  318. 
Reynolds  v.  Dechaums  (24  Texas, 

174), 57. 
Reynolds  w.  Douglass  (20  Pet.  497), 

364,  421. 
Reynolds  r.Ferree  (86  111.  570),  77. 
Reynolds  v.  Horn  (4  La.  Ann.  187), 

251. 
Reynolds  V.  Nichols  (12  Iowa,  399), 

196. 
Reynolds  v.  Peto    (11  Exch.  418), 

15,  223. 
Rhea  v.  Allison  (3  Head,  176),  168. 
Rhett  V.  Poe    (2   How.  457),   336, 

348,  355,  356,  421. 
Rhoades  v.   Megonigal    (2  Pa.  St. 

39),  251. 
Rhode,  Ex  parte  (3   Mont.  &  Ayr. 

217),  248. 
Rhode  V.  Alley  (27  Tex.  443),  269. 
Rhode  V.  Louthaine  (8  Blackf .  413), 

75. 


Rhode  V.  Proctor  (4  B.  &  C.  517), 

336. 
Rhodes  v.   Gardiner  (30  Me-  110)» 

34rf. 
Rhodes    v.    Liudley    (Ohio    Cond. 

465),  29. 
Rice  V.  Gove  (22  Pick.  158),  13,  124. 
Rice  V.  Hogan  (8   Dana,  134),  20, 

310. 
Rice  V.  Pelt  (15  Johns  503),  52. 
Rice  V.  Stearns  (3  Mass.  225),  260. 
Rich  V.    Cockerell  (9  Ves.  69),  62. 
Rich  V.  Errol  (51    N.  H.  350),  135. 
Rich  V.  Starbuck  (51  Ind.  87),  17, 

35,  155,  283. 
Richards  v.   Barton  (1   Esp.  269), 

219. 
Richards  v.  Daily  (34   Iowa,  427), 

295. 
Ricliards  v.  Darst  (51  III.  141),  34. 
Richards  v.  Davis  (7  Am.  Law  Reg. 

483),  304. 
Richards  v.   Doe  (100  Mass.  524), 

492. 
Richards   v.  Fraukum  (9  C.  &  P. 

211),  33,  (9  C.  &  P.  221),  265. 
Richards   v.   Globe   Bk.    (12   Wis. 

692),  511. 
Richards?).  Macey  (14  M.  &  W.  484), 

163. 
Richards  v.   Richards  (2  B.  &  Ad. 

477),  63,  64,  263. 
Richardson  v.   Corastock  (21  Ark. 

68),  174. 
Richardson  v.  Carpenter  (46  N.  Y. 

661),  26. 
Richardson  v.  Daggett  (4  Vt.  336), 

63. 
Richardson  v.  Daniels  (5  U.  C.  Q. 

B.  671), 211. 
Richardson    v.    Ellett    (10  Texas, 

190),   10. 
Richardson  v.  Fenner  (10  La.  Ann. 

599),  215,  216. 

935 


TABLE    OF    CASES    CITED. 


517),  379. 
Richardsou  v.  Saubom  (33  Vt.  75), 

201,213. 
Eicharclsou  v.  Schirtz  (59  III.  313), 

285. 
Ricbardsou  v.    Scobie  (10  B.  Mou. 

12),  292. 
Richardsou  v.  Strong  (13  Ired.  106), 

54. 
Eichert  v.  Keener  (54  111.  306),  295. 
Richie  v.    Bass  (15   La.  Auu.  668), 

84. 
Richie  v.   Bradshaw   (5  Cal.  228). 

443. 
Richie  v.  McCoy  (13  Sm.  &  M.  541), 

355. 
Richmond  Manf.    Co.   v.   Davis  (7 

Blackf.  412),  394. 
Richmond  Pot.  &  Fred.  R.  R.  Co. 

V.  Suead  (19  Gratt.  354),  115,  123. 
Richter  r.  Selin  (8  Serg.  &  R.  425), 

11,  362. 
Richwiue  v.  Heira   (1  Pa.  373),  64. 
Ricketts  r.  Pendleton  (14  Md^.  320), 

273,  327. 
Rickford  v.   Ridge  (2  Camp.  537), 

443. 
Ricklev.   Dow  (39  Mich.  91),  154. 
Ricord     v.     Betteuham    (3    Burr. 

1734),  66. 


Refereuces  are  to  Sections. 

Richardson  v.  French  (4  Met.  577),  i  Ridgway  r.  Farmers  Bk.  (12  Serg. 

101.  I       &  R.  256),  120,  121. 

Richardson    r.    Lincoln    (5  Mete.      Ridley  r.  Taylor  (13  East,  175),  98. 
201),  10,  34,  260.  I  Riegel  v.    Cunningham    (9   Phila. 

Richardson    v.    Mellish    (2    Biug.  177),  295. 

229),  186.'  I  Rigby,  Ex  parte  (19Ves.  402),  447. 

Richardson  v.  Merrill  (82  Vl.  27),  |  Rigby  v.   Norwood    (34  Ala.    129) » 

61.  I       418. 

Richardson     v.     Rice     (  —  Teun.  j  Riggin  v.  Collier  (0  Mo.  586),  3. 

[1878]),  167.  Riggs  r.   Amr.  Tract   Soc.    (95  N. 

Richardsou  v.   Rickmau    (5  T.  R.         Y.  503),  52. 

Riggs  V.  Lindsay  (7  Cranch,  500), 

226,  408. 
Riggs  V.  Waldo  (2  Cal.  485),  270, 

310. 
Riker  v.  Cosby  (2  Pa.  911),  266. 
Riley  v.  Dickens  (19  111.  29  and  30), 

28. 
Riley    v.  Johnson    (8  Ohio,   528), 

168. 
Riley  v.  Schawhacker,  50  Ind.  592), 

295. 
Rindskoff  V.  Barrett  (11  Iowa,  172), 

29,  486. 
Riue  r.  Blake  (59  Texas,  240),  77. 
Ringling  v.  Eobu  (4  Mo.  App.  63), 

473. 
Ripley  v.   Greenleaf   (2  Vt.   129), 

316,  425. 
Risley  V.  Phoenix  Bk.  (18  N.  Y.  S. 

C.  484),  449. 
Ritchie  v.    Moore    (5  Munf.   388), 

266. 
Rittenhouse  v.  Ammerman  (64  Mo. 

197),  146,  147,  170. 
Hitter  v.   Singmaster  (73  Pa.    St. 

400),  379. 
Ritter's  Appeal  (9  Smith  (Pa.  9),  57. 
Rivers  v.    Thomas    (1    Lea,  649), 

270,  271,  272. 
Rivers  r.  Moss  (6  Bush,  600),  185. 


Rideoiit   V.  Bristow   (1  Tyrw.  90),      Rivers  v.  Parmley    (18  Ala.    262), 
146,  (1  Cromp.  &  Jer.  231),  166,  I       327. 
170.  I  Roach  r.   Karr  (18  Kan.  529),    285. 

936 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Roach  V.  Ostler  (1  Man.  &Ry.  120), 

20,  218. 
Roak  V.  Turner  (29   Ga.  458),  292, 

293. 
Robarts  v.  Tucker  (4   Eng.   L.   & 

Eq.  236),  449. 
Robb  V.   Ross  Co.  Bank  (41  Barb. 

580),   127. 
Robbius  V.  Eaton  (IQ  N.  H.  5G1),  50. 
Robbins  v.  Mount   (4  Rob.   (N.  Y.) 

553),  47. 
Robinson  v.  Chemical  Nat.  Bk.  (86 

N.  Y.  407),  77. 
Robinson  v.  Leavitt  (7  N.  H.  100), 

471. 
Roberts  v.  Austin  (26  Iowa,  315), 

5b,  (SWhart.  313),  86,  452. 
Roberts  v.  Bethel  (12  C.   B.  778), 

34,  220. 
Roberts  v.  Bolles  (101  U.    S.  122), 

474. 
Roberts  v.  Bradshaw  (1  Stark.  28), 

348. 
Roberts  v.  Cobb  (31  Hun,  158),  161. 
Roberts  v.  Eden  (1  Bos.  &  P.  398), 

301. 
Roberts  v.  Fisher  (43  N.   Y.  159), 

244. 
Roberts  v.    Hall   (37  Conn.   205), 

294.  _ 
Roberts   v.  Hardy  (3   Maule    &  S. 

533),  66, 
Roberts  v.  Jacks  (31  Ark.  597),  26. 
Roberts  v.  Lane  (64  Me.  108),  295, 

303. 
Roberts  v.  McGrath  (38  "Wis.  52), 

34d,  286. 
Roberts   v.   Manson    (1  Ala.  373), 

314. 
Roberts  v.  Masters  (40  Ind.  463), 

270,  271,  273. 
Roberts  v.  Peake  (1  Burr.  323),  25. 


Roberts  v.  Thompson  (14  Ohio  St. 

1),  304. 
Roberts  v.  Wood  (38  Wis.  60),  34rt', 

286. 
Robertson  v.  Allen  (59  Tenn.  233), 

259. 
Robertson  v.   Banks   (1  Smedes   & 

M.  066),  145. 
Robertson   v.    BurdekLn    (1    Ross 

Lead  Cas.  812),  .508. 
Robertson  v.  Kensington  (4  Taunt. 

30),  267,  268. 
Robertson    r.    Read    (11    Wright, 

115),  241. 
Robertson  v.  Steward  (1  Man  &  G. 

511),  17. 
Robertson  v.    Williams    (5  Muuf. 

381),  158. 
Robins  v.  Bacon  (3Greenleaf,  346), 

5a,  5b. 
Robius   V.   Gibson    (1  Maule   &  S. 

288),  325,  346,  355. 
Robins    V.    Richardson    (2  Bosw. 

253),  301. 
Robinson's  Admr's   v.  Allison  (36 

Ala.  525),  377. 
Robinson,  Ex  parte  (1  Buck.  113), 

86. 
Robinson  v.  Abel  (17  Ohio  St.  36), 

270. 
Robinson  v.  Ames  (20  Johns.  146), 

211,  215,  216,  227,  355. 
Robinson  v.  Bankof  Darien  (18  Ga. 

65),  467. 
Robinson    v.    Bartlett    (11    Minn. 

410),  270. 
Robinson  v.  Bland  (2  Burr.  1077), 

20,  178,  179,  506. 
Robinson  v.   Blen  (20  Maine,  109), 

315. 
Robinson  r.  Crenshaw  (2  Stew.  & 

P.  176),  174,  183. 


Roberts    v.   Roberts  (3    P.   Wms.      Robinson  v.  Gould  (11  Cush.  55), 


66),  192. 


175,  287. 


937 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Robinson  v.  Hamilton  (4  Stew.  &  P. 

91),  342. 
Robinson  v.   Hawks  (9  Q.  B.  52), 

452. 
Robinson  v.  Lair  (31  Iowa,  9),  1G5, 

294,  319. 
Robinson  v.   Lyle  (10  Barb.  512), 

422. 
Robinson  v.  Read  (9  B.  &.  C.  449), 

244,  380,  392. 
Robinson  v.  Reynolds  (2  Q.  B,  196), 

1.54,280. 
Robinson  v.  St.  Louis  (28  Mo.  488), 

481. 
Robinson  v.  Taylor  (4  Pa.  St.  242), 

107. 
Robinson  v.  Weeks    (56  Me.  102), 

4G,  47. 
Robinson   v.   Wilkinson  (38  Mich. 

299),  247. 
Robinson  r.  Yarrow  (7  Taunt.  455), 

77,230,  399. 
RobsoQ  V.  Bennett  (2  Taunt.  410), 

443. 
Robson  V.  Calze  (1  Doug.  228),  193. 
Robson    V.  Curlewis  (Car.   &    M. 

378),  346. 
Robson  V.   Drummond  (2  B.  &  Ad. 

303),  241. 
Rock  Co.  Nat.  Bk.  v.  Hollister  (21 

Minn.  385),  268,  273. 
Rockwell   V.     Elkhorn    Bank     (13 

Wis.  653),  115. 
Rockwell  V.  Charles  (2  Hill,  499) 

196. 
Rodabaugh    v.    Pitkin    (46    Iowa, 

544),  310,  421. 
Rodes  V.  Patillo  (6  Cush.  271),  185. 
Rodney   v.   Wilson   (67   Mo.   123), 

273,  274,  363. 
Roehner  r.  Knickerbocker  Life  Ins. 

Co.  (63  New  York,  163),  316. 
Raffey   v.   Greenwell  (10  A.  &  E. 
222),  25. 

938 


Rogers  v.    Adams   (66  Ala.   600), 

287. 
Rogers   v.  Batchelor  (12  Pet.  229), 

98. 
Rogers  v.  Blackwell  (49  Mich,  192), 

53. 
Rogers  v.  Burlington  (3  Wall.  654), 

134,  480,  481,  482. 
Rogers  v.  Colt  (6  Hill,  322),  265. 
Rogers  v.  Gibson  (15  Ind.  218),  17. 
Rogers  o.  Haqkett  (21  N.  H.  100), 

363. 
Rogers    v.     Huntingdon    Bk.    (12 

Serg.  &R.  73),  497. 
Rogers  v.      Kneeland     (10  Wend. 

218),  157. 
Rogers  v.   Langford    (1    C.  &   M. 

637),  314,  466. 
Rogers  V.  March  (33  Me.  106),  87. 
Rogers    V.   Miller  (4    Scam.  333), 

366. 
Rogers  v.  Posters    (I  Mete.  (Ky,), 

645),  394. 
Rogers  v.    Rogers    (1  Hall,   391), 

203. 
Rogers  v.  Shaw  (59  Cal.  260),  392. 
Rogers  v.  Stephens    (2  T.  R.  713), 

325,  334,  346. 
Rogers    V.    Stephenson  (16   Minn. 

68),  162. 
Rogers  v.  Topp  (Texas,  9),  394. 
Rogers  v.  Ward  (8  Allen,  387),  62. 
Rogers  V.  Ware  (2  Neb.  29),  19. 
Roget  V.  Merritt  (2  Cal.  117),  380. 
Rohde,  Ex  parte  (Mont.  &  M.  430),. 

358. 
Roland  v.  Logan  (18  Ala.  307),  63. 
Rollins  V.  Gilson    (3  Camp.  334), 

346. 
Rolls    V.    Pearce  (L.    R.  5  Ch.  D. 

730),  252. 
Rome  V.  Cabat  (28  Ga.  50),  481. 
Rominger  a.  Keyes    (73  Ind.  376), 
30. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Roof  V.  Stafford  (7  Cow.  179),  49. 
Roosa   V.    Crist   (17  111.    191),  257, 

257a,  508. 
Roosevelt  v.    Woodhull   (2  Anth. 

(N.  Y.)  50),  354. 
Root  V.   rranklin    (3  Johns.  207), 

314. 
Roquette  v.  Overman  (IG  Q.  B.  L. 

R.  525),  507,  509. 
Rosa  V.  Butterfield  (33  N.  Y.  664), 

259. 
Rosa  V.  Brotherton  (10  Wend.  86), 

168. 
Roscoe    V.   Hardy  (12   East,  434), 

373. 
Rose  V.    City    of    Bridgeport   (17 

Conn.  243),  467,  471. 
Rose    V.  Dickson  (7  Johns.   196), 

196. 
Rose  V.  Hurley  (39  Ind.  82),  288. 
Rose   V.  Main  (1   Bing.  N.  C.  356), 

193. 
Rose  V.  San  Antonio  R.  R.  Co.  (31 

Texas,  49),  173. 
Rose   V.    Sims    (1  B.   &    Ad.  521), 

172. 
Rose  V.  Williams  (5  Kan.  489),  422. 
Rosher  v.  Kiernan    (4  Camp.   87), 

335. 
Ross  V.  Bedell  (5  Duer,  462),  355. 
Ross    V.  Drinkard    (35    Ala.  434), 

303. 
Ross  V.  Donald  (29  Ohio  St.  473), 

285. 
Ross  V.  Espy  (66  Pa.  St.  481),  261. 
Ross  V.  Hurd  (71  N.  Y.  14),  365. 
Ross  V.   Planters  Bk.  (5   Humph. 

335),  345. 
Ross  V.  Terry  (63  N.  Y.  613),  244. 
Rossiter  v.  Rossiter  (8  Wend.  494), 
•  77,84. 

Roth  V.  Colvin  (32  Ark.  125),  300. 
Rothschild  v.   Corney    (9  B.   &  C. 

388),  446,  473. 


Rothschild  v.  Crix  (31  Mich.  150), 

270. 
Rothschild  t).  Currie  (41  E.  C.L.  R. 

43),  334,  509. 
Rounds  1-.  Smith  (42  111.  245),  456. 
Routh  V,  Robertson  (11  Smed.&M- 

362),  346. 
Row  V.  Dawson    (1   Ves.  331),  5c, 

452. 
Rowan  v.  Odenheiraer  (5   Smed.  & 

M.  44),  345. 
Rowe  V.  Tipper  (13  C.  B.  249),  335. 
Rowe  V.  Ware  (30  Ga.  278),  75. 
Rowe   V.   Young  (2  Brod.  &.  Bing. 

165),  227,  310,394. 
Rowland  v.  Fowler  (47  Conn.  347), 

289,  300. 
Rowland  v.  Harris    (65   Ga.  141), 

170. 
Rowland  v.  Sprinjett  (14  M.  &  W. 

7),  346. 
Roxborough  v.  Messick  (6  Ohio  St, 

448),  168. 
Royal  V.    Lindsay   (15  Kan.  291), 

424. 
Royce  v.  Allen  (28  Vt.  234),  87. 
Rucker  v.  Conmeyer  (1  Esp.  105), 

75. 
Rucker  v.  Dearing  (18  Gratt.  438), 

375. 
Rucker  v.  Hiller  (16  East,  43 j,  33f, 

355. 
Rucker  v.    Wadlington     (5    J.    J. 

Marsh.  238),  147,  170. 
Rudd  V.  Matthews  r79  Ky.  (1881) 

479),  288,  398. 
Ruddell  V.  Landers  (25  Tex.  238), 

269. 
Rudderow  v.  Huntington  (Z  Sandf. 

252),  203. 
Rudelle   v.    Dillman    (73  Ind.  521), 

285. 
Rudelle  v.    Pharlor    (72   Ind.  533), 

285. 

939 


TABLE    OF    CASKS    CITED. 


References  are  to  Sectious. 


Ruff  ?•.  Webb  (1  Esp.  R.  ll'D),  23. 
Rutlin  V.  Mcbaue  (6  Ired.  Eq.  507), 

123. 
Ruggles  V.  Patten  (8  Mass.  480),  30, 

227,  310. 
Ruiz  V.  Norton  (4  Cal.  355),  88. 
Riiraball  v.  Ball  (10  Mod.  38),  310. 
Rumball  r.  Metropolitan  Bk.   (2  Q. 

B.  Div.  194),  473,  4!)7. 
Ruiusey  v.  Leek  (,">  Wend.  20),  173. 
Ruudel  V.  Keller    (7    Watts,   237), 

46. 
Ruuuion  V.  Crane    (4  Black,  4GG), 

393. 
Runyon    r.    Mountfort    (Bushbee, 

371),  342. 
Russell  u.  Clark  (3  Hill,  504),  174, 

(7  Cranch,  69),  241, 420. 
Russell  V.  Drummond  (6  Ind.  216), 

Russell  V.  Haddock  (8  111.  283),  165, 

289. 
Russell  V.  Hankey  (6  T.R.  12),  45C. 
Russell  V.   Hester    (10    Ala.    535), 

304. 
Russell    V.    Langstafife    (2    Doug. 

514),  282. 
Russell  r.  Lee  (1  Lev.  86),  48. 
Russell  V.  Moseley  (3  B.  &  B.  210), 

418. 
Russell  V.  Phillips  (14  Q.  B.  891), 

209,  227. 
Russell    V.  Russell    (1  McArthur, 

263),  28. 
Russell  V.  Splater  (47  Vt.  273),  168. 
Russell   ;;.   Swan    (16  Mass.  314), 

246,  257,  262. 
Russell  V.  Wiggins  (2  Stoiy,  213), 

220,  226,  500,  507. 
Russell  V.  Whipple  (2  Conn.  536), 

23. 
Rust  r.  Gott  (9  Cow.  169),  188. 
Rustr.  Hanselt  (14  Jones  &  S.  22), 

170. 

940 


Rutland  v.  Brister  (53  Miss.  683), 

156. 
Rutland  Bk.  v.  Buck  (5  Wend.  66), 

301. 
Ryder  r.  Wombwell  (L.  R.  4  Ex. 

32),  46. 
Ryhiuer   v.  Feickert  (92   111.  305), 

77,  262; 
Rylaud   v.   Brown   (2    Head,   273), 

289,  299, 

S. 

Sabine  v.  Bk.  of  Worcester  (21  Me. 

353),  497. 
Sackett  v.  Kellar  (22  Ohio  St.  554), 

288,  300. 
Sackett  v.  Palmer   (25  Barb.  175), 

25. 
Sackett  v.  Spencer  (29  Barb.  180), 

23. 
Sackrider  v.   Brown    (3    McLean, 

481),  324. 
Saco  Nat.  Bk.  v.  Sanborn  (63   Me. 

340),  342,  348. 
Safford  v.  WyckofE   (4   Hill,  442), 

115,  116,  124,  335. 
Sage  V.  Wilcox  (6  Conn.  81),  418. 
St.  Butterfield  v.  Beal  (3  Ind.  203) , 

75. 
St.  John  V.  Homans   (8  Mo.  382), 

443,  449, 
St.  John  V.  Redmond  (9  Port.  428), 

79. 
St.  John  r.  Roberts  (31  N.  Y.  441), 

310,  336,  376. 
St.  Joseph    F.   &   M.    Ins.    Co.   v. 

Hauck  (71  Mo.  465),  175,  424. 
St.  Joseph  Township  v.  Rogers  (16 

Wall.  644),  480,  481,  482. 
Salmon    v.   Grosvenor   (66    Barb. 

160),  296. 
Salmons  v.  Hovt  (.53  Ga.  493),  30. 
Salisbury  v.  Renick  (44    Mo.  554), 

216,  365. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Salter  v.  Burt  (20  Weud.  205),  31G, 

434. 
Saltmarsli    v.   Planters,  etc.,    Bk. 

14  Ala.  668),  292. 
Saltmarsli  v.  Smith  (32  Ala.  404), 

80. 
Saltmarsli  v.  Tuthill  (13  Ala.  390), 

346. 
Salt   Springs   Nat.   Bk.   v.   Burton 

(58  N.  Y.  432),  317. 
Salt  Springs  Bk.  v.  Syracuse  Sav. 

Inst.  (62  Barb.  101),  231. 
Samstag   v.  Conley  (64   Mo.  477), 

28,  2576. 
San  Antonio  v.  Lane  (32  Tex.  405), 

473,  476,  477,  480,481. 
San  Antonio  v.  Meharty  (96  U.  S. 

315),  475,482. 
Sanborn  v.   Little    (3  N.  H.   539), 

242. 
Sanborn  v.  Neal  (4  Minn.  137),  124. 
Sanders  v.  Anderson  (21  Mo.  402), 

12,  123. 
Sanders  v.  Bacon  (8   Johns.  485), 

41,  256. 
Sanders  v.  Blaine    (6  J.  J.  Marsh. 

446),  148. 
Sanders  v.  Vanzeller  (12  L.  J.  Exch. 

497),  491. 
Sanderson  u.  Bowes  (14  East,  500), 

30,  310. 
Sanderson  v.  Colraan  (4  Man.  &  G. 

209),  230. 
Sanderson  v.  Judge  (2  H.  Bl.  509), 

310,  314,  318,341. 
Sanderson  v.  Oakley  (14  La.  373), 

314. 
Sanderson  v.  Reinstadler  (31   Mo. 

483),  340. 
Sands  v.  Clarke  (19  L.  J.  C.  P.  84), 

314. 
Sands  V.  Wood  (21  Iowa,  263),  265. 
Sanford  v.  Mickles  (4  Johns.  224), 

107,  108,  262,  296, 


Sanford    v.  Norton  (14  Vt.   234), 

289,  313. 
Sanford  v.  Sanford  (45  N.  Y.  723), 

63. 
Sanger  v.  Simpson    (8  Mass.  260), 

29,  346. 
Sansome    v.    Bell    (2    Camp.    39), 

416. 
Saratoga  Bk.  v.  King  (44  N.  Y.  87), 

179. 
Sargent  v.  Appleton    (6  Mass.  85), 

423. 
Sargent  v.  Essex  Marine   R.  R.  (9 

Pick.  202),  497. 
Sasscer  v.    Farmers    Bk.    (4   Mo. 

429),  327. 
Saunders  v.  Wakefield    (4  Barn.  & 

Aid.  595),  418. 
Saunderson  v.  Jackson  (2   Bos.  & 

P.  238),  12. 
Saunderson  v.   Piper  (5   Bing.  (N. 

C.)  425),  28. 
Savage  v.  Aldren  (2  Stark.  (2  E.  C. 

L.  R.)  233),  267. 
Savage  17.    King  (17   Me.   301),  63, 

262,  (5  Shep.  301),  262. 
Savage    v.     Merle    (5    Pick.    83), 

375. 
Savage  v.  Rix  (9  N.  H.  263),  124. 
Savage   v.  Walshe  (26   Ala.    619), 

118. 
Savauah  &   Memphis  R.  R.  v.  Lan- 
caster (62  Ala.  563),  473. 
Savings    Bk.   v.    Benton    (2    Met. 

(Ken.)  240),  121. 
Savings  Bk.  v.   Scott  (10  Neb.  83), 

178. 
Sawyer  v.  Allen  (9   Allen,  42),  295. 
Sawyer  v.    Fernald  (59  Me.    .500), 

I.". 
Sawyer    v.     Hoovey    (5   La.    .\nn. 

153),  295. 
Sawyer  v.  Moran  (3  Teun.  Ch.  3(!), 

167. 

941 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Sawyer  v.  Pi-ickett  (19  Wall.  IGfi), 

305. 
Sa^\7er  v.  Taggert  (U  Bush,  730), 

189. 
Sawyer  v.  Wise  well    (9  Allen,  42), 

155. 
Saxtoii  V.  Steveusou  (23  Up.  Can. 

C.  P.  503),  28. 
Say  V.  Barwick  (1  Ves.  &  B.  195), 

57. 
Sayles  v.    Sims    (73  N.    Y.  652), 

422. 
Saylor    v.   Daniels    (37   111.   331), 

1()8. 
Sayre  v.  Frick  (7  Watts,   383),  262. 

336. 
Sayre  v.  Nichols  (5  Cal.  487),  87, 

(7  Cal.  535),  124,  125. 
Sayre  v.  Reynolds  (2   South,  737), 

393. 
Sayre  v.  Wheeler    (31    Iowa,  112), 

34c.    . 
Scaramon  v.   Adams    (11  111.    575), 

273. 
Scarborough    v.   Harris    (1     Bay, 

177),  355, 
Scard  r.  Jackson '(34  L.  T.  R.  65), 

11. 
Scarpelliui  v.   Atcheson  (7  Ad.  & 

El.  (N.  s.)  Q.  B.  847),  63,  64. 
Schaeffer  v.  Bidwell  (9  Nov.  209), 

123. 
Scliepp  V.    Carpenter    (51    N.    Y. 

602),  169,  294,  301. 
Schimmelpeunich  v.  Bayard  (1  Pet. 

264),  209,  226,500. 
Schley   v.    Merritt   (37    Md.   352), 

270. 
Schlussel  V.  Warren    (2   Ore.  18), 

424. 
Schmidt  i'.   Lomehouse  (2  Bailey, 

276),  310. 
Schmidt    v.    Schmaelter   (45    Mo. 

502),  12. 

942 


Schcneco    r.  Meyer    (4    Mo.    App. 

566), 162. 
Schneider  v.  Norris  (2   Maule  &  S. 

286),   12. 
Schneider   v.    Schiffman    (20    Mo. 

571),  270,  272,  273. 
Schnewind    v.     Hacket    (54     Ind. 

248),  394. 
Schocr  V.  Houghlin   (50  Cal.  628), 

280,  293. 
Schofleld  r.  Bayard  (3  Wend.  488), 

216,  228. 
Schofleld   V.  Day  (20  Johns.   102;, 

511. 
Schoharie  Nat.  Bk.  v.  Bevard   (51 

Iowa,  258),  22,  227,  310. 
Scholefield  v.  Eichelberger  (7  Pet. 

586),  354. 
Schofleld  V.  Taylor  (3  Wend.  488), 

310. 
Scholey  v.  Walsby  (Peake  Cas.  24), 

373. 
School  Directors  v.  Fogleman  (76 

111.  189),  138. 
School  Dist.  v.  Sipley  (54  111.  284), 

77. 
School    Dist.    V.   Stough    (4  Neb. 

357),  138 
School  Dist.  V.  Thompson  (5  Minn. 

280),  83. 
School  Town  of  Monticello  r.  Ken- 
dall (72  Ind.  208),  137. 
Schoomaker   v.  Roosa    (17  Johns. 

301),  170. 
Schramm  v.  O'Connor  r98  111.  539), 

57. 
Schryver  v.  Hawkes    (22   Ohio  St. 

308),  283. 
Schuchardt   v.    Hall  (36    Md.    59), 

212.   355. 
Schuff  V.    Ransom    (79   Ind.    458), 

5."). 
Schultz  V.  Astley  (29  E.  C.    L.  R. 

414),  283. 


TABLE    OF    CASES    CITED. 


I 


Schusten  v.  Harden  (34  Iowa,  181), 

295. 
Schuylkill  County  v.  Copely  (67  Pa. 

St.  386),  285. 
Schwalra  v.  Mclntire  (17  Wis.  232), 

394. 
Schwarz  v.  Oppold  (74  N.  Y.  307), 

394. 
Scipio   V.  Wriglit  (101  U.  S.  665), 

480. 
Scott  V.  Balier  (3  West  Va.  285), 

123. 
Scott  V.  Bevan  (2  Barn.  &  Ad.  78), 

410,  511. 
Scott  V.  Colmisnil  (7  J.   J.  Marsh. 

416),  94. 
Scott  V.  First  Nat.  Bk.    (71   lud. 

319),  295,  336. 
Scott  V.  Fisher  (4  T.  B.  Mon.  87), 

377. 
Scott  V,  Gilmore    (3  Taunt.  226), 

179. 
Scott  V.  Greer  (10  Pa.  St.  103),  364. 
Scott  ■».  Hill  (3  Mo.  88),  251. 
Scott  V.  Harris  (76  N.  C.  205),  424. 
Scott  U.Lewis  (2  Conn.  132),  196. 
Scott  V.  Lifford  (9  East,  347),  335. 
Scott    V.    McLellan  (2   Greenleaf, 

199),  78. 
Scott  V.  Meeker  (20  Hun,  163),  366, 

442. 
Scott  17.   Messick  (4  T.    B.  Mon. 

535),  87. 
Scott  V.  Ocean  Bk.  (23  N.  Y.  289), 

165. 
Scott  V.  Searles  (7  Sm.  &  M.  498), 

148. 
Scott  V.  State  Bk.  (9  Ark.  36),  Zid. 
Scott  V.  Turner    (5  La.  Ann.  346, 

305. 
Scott  V.  Waken  (Dudley  (Ga.)  243), 

394. 
Scoville  V.  Landon  (50  N.  Y.  686), 

303. 


References  are  to  Sections. 

Scruggs  V.  Cass  (8  Yerg.  175),  244, 

466. 
Scruggs  V.  Driver  (31  Ala.  274), 80. 
Scudder  v.  Thomas    (35  Ga.   364), 

185. 
Scudder  v.  Union  Nat.  Bk.  (91  U. 

8.  406),  222,  226,  506. 
Scull  V.  Edwards  (6   Eug.  (Ark.) 

24),  20,  266. 
Scull  V.  Mason  (7  Wright,  99),  363. 
Seabury    v.    Hungerford    (2  Hill, 

80),  270,  271. 
Seacord  v.  Miller  (3  Kerr,  55),  362. 
Seaman  v.  Seaman  (12  Wend.  381), 

174. 
Searcy  v.  Vance  (Mart.  &  Y.  225),    • 

29. 
Searle  v.  Galbraith  (73  111.  269),  52. 
Searle  v.  Norton  (2  M.  &  K.  401), 

442. 
Sears  v.  Brink  (3  Johns.  210),  418. 
Sears  v.  Lantz  (47  Iowa,  658),  260, 

265. 
Sears  v.  Wright  (24   Me.  278),  25. 
Seaton    v.  Scoville  (18   Kau.  435), 

28,  337. 
Seaver  v.  Coburn  (10   Cush.  324), 

87,  123. 
Seaver  v.   Lincoln  (21  Pick.  267), 

296,  311. 
Seaver  u.  Phelps  (11  Pick.  304),  62, 

53. 
Sebag  V.  Abithol  (4  M.  &  Sel.  462), 

227. 
Second  Nat.    Bk.    v.    Gaylord  (34 

Iowa,  248),  421. 
Second  Nat.  Bank  v.  McGuire  (33 

Ohio  St.  295),  362. 
Second  Nat.  Bk.    v.  Miller    (60  N. 
.    Y.  639),  62. 
Second  Nat.  Bk.  v.   Walbridge  (19 

Ohio,  419),  499. 
Second  Nat.   Bank  u.  Williams  (13 

Mich.  282),  159,  252. 

943 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Security    Bk.    v.    Cushman      (121 

Mass.  490),  199. 
Security  N.  Bk.  v.  N.  Bk.  (G7  N.  Y. 

458),  436. 
Sedgwick  v.  Lewis  (70  Pa.  St.  221), 

96. 
Sedgwick  V.  Sedgwick  (5  Cal.  213), 

393. 
Segoud  V.  Garhiud  (23  Mo.  547),  62. 
Seldeuridge   v.  Connable    (32   Ind. 

375),  10. 
SeLser  v.  Brock  (3  Ohio  St.  302), 

280. 
Seneca  Co.  Bk.  v.  Neass   (5  Denio, 

329),  327,318. 
Seueca  Co.  Bk.  v.  Schermerhom  (1 

Denio,  133),  196. 
Seniiig  t;.  Ealston  (23  Pa.  St.  137), 

3. 
Seutance  v.  Poole  (3  C.  &  P.  1),  53. 
Seuter  v  Continental  Bk.    (7  Mo. 

App.  532),  452. 
Serle  v.  Norton   (8  M.  &   W.  309), 

11. 
Serle  v.  Waterworth  (4  M.  &  W.  9), 

146,  170. 
Serrell    v.  Derbyshire  R.  R.  Co.  (9 

C.  B.  811),  447. 
Sessions  v.   Mosely   (4  Cush.  87), 

2rj2, 
Seventh  Nat.  Bk.  v.  Cook    (73  Pa. 

St.  483),  451. 
Sewall  V.  Derbyshire  R.  R.  Co.  (9 

C.  B.  811),  124. 
Sewanee   Mining  Co.  v.  McCall  (3 

Head,  619),  77. 
Seybol  v  Nat.  Currency  Bk.  (54  N. 

Y.288),  289,473. 
Seybert  v.    City    of  Pittsburgh  (1 

Wall.  272),  134,  480,  481. 
Seyfert  v.  Edison  (16  Vroom,  393), 

158. 
Seymour  v.  Continental  Life   Ins. 

Co.  (44  Conn.  300),  296,  412.  \ 

944 


Seymour   v.   Farrell    (51    Mo.  95), 

270,  272. 
Seymour  v.   Mickey    (15   Ohio  St. 

515),  270,  272. 
Seymour  v.  Prescott  (69  Me.  376), 

170. 
Shackleford  v.    Hooker  (54  Miss. 

716),  17,  226,  227. 
Shackraan  v.  Little   (87  Ind.   181), 

77. 
Sliafer  v.  Far.  &  Meech.   Bk.  (9  P. 
•  F.  Smith,  144),  271. 
Shaffers   v.  Maddox    (9  Neb.  205), 

442. 
Shambui'gh   v.      Cammagere      (10 

Mart.  (La.)  18),  314. 
Shand  v.  De  Boisson  (L.  R.  18  Eq. 

283),  56. 
Shane   v.  Lowry  (48  Ind.  205),  154. 
Shank  v.  Butsch  (28  Ind.  19),  12. 
Shankland  v.  Corp.  of  Washington 

(5  Pet.  395),  89. 
Slianklin  v.  Cooper  (8  Ind.  42),  508. 
Shannon  v.  Langhorue  (9  La.  Ann. 

526),  172a. 
Sharp  V.  Bailey  (9  B.  &  C.  44),  30, 

355. 
Sharp  V.  Emmett  (5  Whart.  290), 

86. 
Sliarp    V.   Taylor   (2   Plaillips   Ch. 

801),  198. 
Sliarpless  v.  Mayo  (21  Pa.  St.  147), 

481. 
Sliaver  v.  Ehle  (16  Johns.  201),  33. 
Shaver  v.    Ocean   Mining   Co.    (21 

Cal.  46),  123. 
Shaver  v.  Western  Union  Telegraph 

Co.  (57  N.  Y.  461),  5a,  227. 
Shaw  V.  Clark  (49  Mich.  384),  189. 
Shaw   V.  Craft    (Chitty    on  Bills, 

333),  335. 
Shaw  V.  Emery  (38  Me.  484),  74. 
Shaw  V.  Knox  (98  Mass.  214),  261. 
Shaw  V.  Mudd  (8  Pick.  9),  75. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Shaw   V.  Neal   (19  La.    Ann.   15(J), 

354. 
Shaw  V.  E.  R.  Co.  (101  U.  S.  564), 

289,493. 
Shaw  V.   Reed  (12  Pick.  132),  30, 

310,  318,  358. 
Shaw  V.  Spencer  <1  Mass.  382),  145, 

300. 
Shaw  V.  Stone  (1  Cush.  256),  128. 
Shaylorv.  Mix  (4  Allen,  351),  343. 
Sheboygan  Co.  v.  Parker  (3  Wall. 

96),  480,  481. 
Shed  V.  Brett  (1  Pick.  40),  311,  313, 

314,335,345,  347. 
Sheehy  v.   Mandeville    (6   Cranch, 

253),  379. 
Sheets  v.  Pabody  (6  Blackf.   120), 

148. 
Sheffield  v.  Andress  (56  Ind.  157), 

183. 
Sheffield  v.  Larue    (16  Minn.  388), 

84. 
Sheffield  School  Township  v.  An- 

drees  (56  Ind.  157),  117. 
Shelburne  Falls  Nat.  Bk.  v.  Towns- 
ley    (102   Mass.    177),.    337,   338, 

339,  341,  343. 
Shelby  v.  Judd  (24  Kan.  166),  265, 

310,336. 
Sheldon  v.   Benham  (4   Hill,  129), 

316. 
Sheldon  v.  Chapman  (31 N.  Y.  644), 

364. 
Sheldon  v.  Parker  (10  N.  Y.  S.  C. 

(3  Hun)  499),  250. 
Shelton  v.  Braithwaite  (8  M.  &  W. 

252),  342,  346. 
Shelton  v.  Bruce  (9  Yerg.  24),  25, 
Shelton  v.  Carpenter  (60  Ala.  211), 

262. 
Shelton  v.  Darling  (2  Conn.  435), 

125. 
Shelton  v.  Gill    (11  Ohio,  417),  28. 
Shenton  v.  James  (5  Q.  B.  199),  31. 


60 


Shepard  v,  Hawley  (1  Conn.  329), 

816,336. 
Shepherd    v.  Watrous    (3  Caines, 

166),  174. 
Shepherd  v.  Graves  (14  How.  505), 

10. 
Shepherd  v.  Temple  (3  N.  H.  455), 

203. 
Sherer  v.   Easton  Bk.  (33  Pa.  St. 

134),  365. 
Sheridan  v.  Carpenter  (61  Me.  107), 

123. 
Sherman  v.  Comstock  (2  McLean, 

10),  442. 
Sherman  v.  Mclntrye  (14  N.  Y.  S.  C. 

(7  Hun)  592),  153. 
Sherwood  v.  Archer  (10  Hun,  78), 

170,  199. 
Sherwood  v.  Snow  (46  Iowa,  485)* 

96,  98. 
Sherwood  v.  Stone  (14  N.  Y.  267), 

86. 
Shewell  v.  Knox  (1  Dev.  404),  420. 
Shields  v.  Middleton  (2  Cranch  C. 

C.  205),  222. 
Shife?7.  Shiff  (2  La.  Ann.  269),  145. 
Shipley  v.  Carroll  (45  111.  285),  282. 
Shipmau  v.   Cook  (1  Green  (N.  J.) 

251),  834. 
Shipp  V.   Stacker  (8  Mo.  145),  295. 
Shippey  v.   Henderson   (14  Johns. 

178),  162. 
Shipsey  u.  Boweiy  Nat.  Bk.  (59  N. 

Y.  485),  444. 
Shireff  v.  Wilks  (1  East,  48),  98. 
Shirley  v.   Fellows  (9  Port.  300), 

348. 
Shirley  v.  Howard    (53  111.   455), 

154. 
Shirely  v.  Shirely  (9  Paige,  363), 62. 
Shirts  V.  OverJohu   (60  Mo.  315), 

285. 
Shisler  v.   Van   Dyke   (92  Pa.  St. 

449),  398. 

945 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Shiver  v.  Johnson  ('-'  Brev.   397), 

33. 
Shoe  &   Leather  Nat.   Bk.  v.  Doe 

(123  Mass.  151),  124. 
Shoemaker   v.    Goshen  Township 

(U  Oliio  St.  587),  482. 
Shoemaker  v.    Meclianics  Bk.  (59 

Pa.  St.  83),  339. 
Shoemaker's  Bk.  v.  Street  (16  Ohio 

St.  5),  29. 
Short  V.  City  of  New  Orleans  (4 

La.  Ann.  281),  135,  138. 
Shortrede  v.  Cheek  (1  Ad.  &  El. 

57),  418. 
Shotwell    V.    McKown    (2    South. 

828),  123. 
Shrieve   v.  Duckman  (1  Lit.  194), 

347,  443. 
Shriner  v.   Keller    (25  Pa.  St.  61), 

379. 
Shuetze  v.  Bailey  (40  Mo.  69),  75. 
Shumway  v.   Reid    (34    Me.   560), 

380. 
Shuler  v.   Gillette   (19  N.  Y.  S.  C. 

(12  Hun)  280),  394. 
Shute  V.  Robins    (3   C.   &  P.  80), 

216. 
Shuttleworth   v.    Noyes    (8   Mass. 

229),  63. 
Shuttleworth  v.  Stevens  (1  Camp. 

407),  8. 
Sibley  v.  Muskegan  Nat.  Bk.  (41 

Mich.  196),  270. 
Sice  V.  Cunningham  (1  Cow.  397), 

296. 
Siemon  i-.  WUsou  (3  Edw.  Ch.36), 

52. 
Sigerson    v.    Mathews    (20    How. 

496),  364,  365. 
Sigourney  v.  Lloyd  (8  B.  &  C.  622), 

2G8. 
Sigourney   v.   Wetherell    (6    Met. 

563),  421,  425. 
Sill  V.  Leslie  (16  Ind.  236),  272. 
946 


Silver  v.   Jordou  (136  Mass.  319), 

87. 
Simmons  u.  Blackman  (14  Ga.  318), 

201. 
Simmons   v.  Savings    Society    (31 

Ohio  St.  457),  159,  252,452. 
Simmons  v.  West  (2  Miles,  196), 

193. 
Simo  V.  Hammond  (33  Iowa,  368), 

305. 
Simonds  v.  Merritt  (33  Iowa,  537), 

295. 
Simons  v.  Steel  (36  N.  H.  73),  157, 

418. 
Simpson  v.   Clark    (2  C.   M.  &  R. 

342),  293. 
Simpson  v.  Davis  (119  Mass.  269), 

393. 
Simpson  v.  Fullenwilder  (12  Ired. 

335),  292. 
Simpson  v.   Hall    (47   Conn.  417), 

247,  295. 
Simpson  v.  Ingham  (2  B.  &  C.  72), 

377. 
Simpson  v.    Moulders    (3  Caldw 

429),  29. 
Simpson  v.  Nichols   (3   M.  &  W, 

240),  198. 
Simpson  v.  Pacific,  etc.,  Ins.  Co. 

(44  Cal.  139),  443. 
Simpson  v.   Stackhouse    (9  Barr. 

189),  393. 
Simpson  v.  Tumey  (5  Humph.  419), 

337. 
Simpson  v.  White  (40  N.  H.  540), 

327. 
Simpson     College    v.    Bryan     (50 
■  Iowa,  293),  161. 
Simms  V.  Clark  (11  111.  137),  466. 
Simms  v.  Har\-ey  (19  Iowa,  290),  35. 
Sims  V.  Bond  (5  Barn.  &  Ad.  389), 

447. 
Sims  V.  Stillwell  (3  How.  (Miss.) 

176),  146. 


TABLE    OF    CASES    CITED. 


Sinclair  v.  Baggaley   (4  M.  &  W. 

312),  Sib. 
Sinclair  v.  Field  (8  Cow.  543),  84. 
Sinclair  v.  Lynch  (1  Spears,  244), 

346. 
Singleton  v.  Mann  (3  Mo.  464),  74. 
Sistermans  v.  Fields  (9  Gray,  331), 

178,  303. 
Sizer  v.  Heacock   (23  Wend.  81), 

424. 
Skelton  v.  Dunston  (92  111.  49),  273. 
Skidmore  v.  Clark   (47  Conn.  20), 

289. 
Skilbeck  v.  Garbett  (7  Q.  B.  846), 

348. 
Skilding  v.  Warren  (15  Johns.  270), 

299. 
Skillman  v.  Titus  (32  N.  J.  L.  36), 

446. 
Skinner  v.  Church   (36  Iowa,  91), 

273. 
Skinner  v.  Somes  (14  Mass.  107), 

242. 
Skinner  v.  Tinker  (34  Barb.  333), 

510. 
Skowhegan  Bk.  v.  Farrar  (46  Me. 

293),  251. 
Skrine  v.  Lewis  (Ga.  (1882),  32, 

lack  V.  Kirk  (67  Pa.  St.  380),  261. 
Slack  V.  Marysville  R.  R.  Co.  (13 

B.  Mon.  1),  481. 
Slagle  V.  Rust  (4  Gratt.  274),  261. 
Slawson  v.  Loring  (5  Allen,  340), 

87,  124,  125,  263. 
Slaymaker  v.  Gundacker  (10  S.  &  R. 

75),  379. 
Sloan  V.  Union  Bkg.  Co.  (67  Pa.  St. 

479),  154,  178,  303. 
Slocum  V.  Hooker  (12  Barb.  563), 

51. 
Slocum u.  Lizardi  (21  La.  Ann.  335), 

336. 
Slocum  «.  Pomeroy  (6  Cranch,  221), 

508. 


References  are  to  Sections. 

Slocumb  V.  Holmes  (1  How.  (Miss.) 

139),  380. 
Sloman  v.  Bk.  of  England  (14  Sim. 

459),  447. 
Sloman  v.  Cox  (1  C.  M.  &  R.  471), 

379,  392. 
Slotts  V.  Byers  (17  Iowa,  303),  163. 
Small  V.  Clark  (51  Cal.  227),  363. 
Small  V.  Franklin  Mining  Co.  (39 

Mass.  277),  456. 
Small  V.  Owings  (1  Md.  Ch.  363),  75. 
Small  «.  Sloan  (1  Bows.  353),  419. 
Small  V.  Smith  (1  Den.  583),  301. 
Smalley  v.  White  (44  Me.  442),  20. 
Smalley  v.  Wight  (44  Me.  442),  247, 

336. 
Small's    Admr.    v.    Lumpkin    (28 

Gratt.  835),  80. 
Smart  v.  Sanders  (3  C.  B.  380),  80. 
Smallwoodu.  Vern  (1  Strange,  478), 

21,  2576. 
Smead  v.  Trustees  of  Union  Town- 
ship  (8  Ohio  St.  394),  480. 
Smedes  v.  Bk.  of  Utica  (20  Johns. 

372),  335. 
Srailie  v.  Stevens  (39  Vt.  316),  25, 

488. 
Smith  V.  Abbott  (2  Str.  1152),  227. 
Smith  V.  Allen  (5  Day,  337),  23. 
Smith  V.  Alexander   (31   Mo.  193), 

123. 
Smith  V.  American    Coal    Co.   (7 

Lans.  317),  497. 
Smith  V.  Applegate    (3  Jab.  352), 

174. 
Smith  V.  Ayer  (101  U.  S.  320),  299. 
Smith  V.  Bank  of  New  South  Wales 

(L.  R.  41  L.  J.  P.  C.  26),  213. 
Smith  V,  Bean  (15  N.  H.  577),  34c. 
Smith  V.  Beatty  (2   Ired.  Eq.  456), 

52. 
Smith  V.  Beltger  (68  Ind.  254),  379. 
Smith  V.  Boultou  (1  Hurl.  &  W.  3), 

346. 

947 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Smith  V.  Braine  (16  Q.  B.  244;,  154, 

178,  303. 
Smith  V.  Carter  (25  Wis.  283),  273. 
Smith  V.  Case  (2  Ore.  190),  34c. 
Smith  V.  Chester  (1  T.  R.  G54),  230, 

373,  379,  399. 
Smith  V.  Childress  (27   Ark.  328), 

273. 
Smith  V.  Clarli  Co.  (54  Mo.  58),  117, 

481. 
Smith  V.  Clarke  (9  Iowa,  241),  251, 

2G6. 
Smith  V.  Clopton  (4  Tex.  109),  28, 

269. 
Smith  V.  Coleman  (7  Jur.  1053  V. 

C.  B.),  98. 
Smith  V.   Columbia   State    Bk.    (9 

Neb.  34),  178. 
Smith  V.  Curlee    (102   Mass.  141), 

321,  365. 
Smith  V.  Dann  (6  Hill,  543),  420. 
Smith  V.  Dibrell  (31  Tex.  239),  145. 
Smith    V.   Dickinson     (6    Humph. 

261),  75. 
Smith  V.  Ellis  (29  Me.  422),'  25. 
Smith  V.  Elliott  (1  Pat.  &  H.  307), 

52. 
Smith  V.  Eureka  Flour  Mills  Co.  (6 

Cal.  1),  115. 
Smith   V.  Fisher   (24   Pa.  St.   222), 

359. 
Smith  V.  Foley  (6  Wall.  492),  295, 
Smiths.  Gibbs  (2  Smed.  &  M.  479), 

318. 
Smith  V.  Gibson  (6  Blackf .  369),  78. 
Smith  V.  Harper  (5  Cal.  329),  379, 

424. 
Smith  V.  Hawkins    (6   Conn.  444), 

424. 
Smith  V.  Hill  (6  Wis.  154),  327. 
Smith  V.  Hiscock  (14  Me.  449),  280, 

293,  295. 
Smith  V.  Hoagland  (78  Pa.  St.  252), 

168. 

948 


Smith  V.  Hyde  (36  Vt.  306),  424. 
Smith  V.  Ide  (3  Vt.  390),  418. 
Smith  V.  Jay  (23  Vt.  656),  424. 
Smith  V.  Johnson  (71  Mo.  382),  77, 

259. 
Smith  V.  Jones  (20  Wend.  192),  443. 
Smith  V.  Kelly  (13  Met.  309),  46,50. 
Smith  V.  Kendall  (6  T.  R.  143;  s.  c. 

1  Esp.  231),  21,  2576. 
Smith  V.  Kidd  (68  N.  Y.  130),  75. 
Smith  V.  Kittridge  (21  Vt.  238),  160, 

252. 
Smith  V.  Kno-s  (3  Esp.  47),  158,  232, 

423. 
Smith  V.  Law  (21   N.  Y.  296),  115, 

134. 
Smith  V.  Little  (10  N.  H.  826),  321, 

313,  337,  346. 
Smith  V.   Livingston    (HI     Mass. 

342),  289. 
Smith  V.  Lockridge  (8  Bush,  423), 

168,  219,  363. 
Smith©.  Lockwood  (16  Johns.  367), 

381. 
Smith  v.   Lord  (2  Daw.  &  L.  759), 

11. 
Smith  V.  Lounsdale  (6   Ore.  157), 

362,  365. 
Smith  V.  Lloyd  (11  Leigh,  512),  377. 
Smith  V.  Mace  (44  N.  H.  553),  392. 
Smith  V.  Madison  (7  Ind.  86),  133. 
Smith  V.  Marsack  (6  C.  B.  488),  49, 

56,  63,  230, 
Smith  V.  Mayo  (9  Mass.  62),  50. 
Smith  V.  McClure  (5  East,  476),  21, 

34,  346,  221. 
Smith  V.  McNair  (19  Kan.  330),  244, 

399,  400,  474. 
Smith  V.  Mead  (3  Conn.  253),  4,  506. 
Smith  V.  Mercer  (6  Taunt.  83),  259, 

399,  400,  450,  451. 
Smith  V.  Merrill  (54  Me.  48),  261. 
Smith  V.  Miller  (43  N.  Y.  171),  210, 

334,  379,  443,  456. 


i 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Smith  V.  Mingay  (1  Maule  &  S.  87), 

3. 
Smith  V.  Moberly  (10  B.  Mon,  2G9), 

286. 
Smith   V.   Mullett    (3   Camp.  208), 

339. 
Smith  V.  Muncie  Nat.  Bk.  (29  Ind. 

159),  28,  209. 
Smith  V.  Nevliu  (89  111.  193),  269. 
Smiths.  Nightingale  (2  Starli.  375), 

28. 
Smith  V.  Nissen  (1  T.  R.  269),  378. 
Smith. u.  Oliphant  (2  Sandf.  306), 

46.  ' 
Smith  V.  Owens  (21  Cal.  11),  879. 
Smith  V.  Pedley  (Chitty  Jr.  on  Bills, 

1241),  74. 
Smith  V.  Perry  (5  Dutch.  74),  75. 
Smith  V.  Philbrick  (10  Gray,  252), 

314. 
Smith  V.  Pickering  (Peake,  50),  65, 

148. 
Smith  V.  Poillon  (22  Hun,  832),  337. 
Smith    V.    Rawson    (61  Ga.   208), 

257a. 
Smith  V.  Richards  (29  Conn.  232), 

170. 
Smith  V.   Roach    (7   B.   Mon.  17), 

210,  211,  337. 
Smith  V.  Rockwell  (2  Hill,  484),  366. 
Smith  V.  Sac  County  (11  Wall.  139), 

303. 
Smith  V.  Sawyer  (55  Me.  141),  378. 
Smith  V.  Screven  (1  McCord,  368), 

379. 
Smith  V.  Sliaw  (2  Wash.  C.  C.  167), 

410. 
Smith  V.   Sheldon    (35   Mich.  42), 

107,  424. 
Smith  V.  Silvers  (32  Ind.  321),  28. 
.  Smith  V.  Sloan  (37  Wis.  285),  97. 
Smith  V.  Smith  (1  R.  I.  398),  28, 

(30  Texas,  754),  185,  (21  HI.  244), 

188,  252,  394,  434,  511. 


Smith  V.  So.  Royaltou  Bk.  (32  Vt. 

341),  34d. 
Smith  V.  Spinolla  (2  Johns.  198), 

506. 
Smith  V.  Strader  (4  How.  404),  98. 
Smith  V.  Taylor  (39  Me.  242),  164. 
Smith  V.  Terry  (69  Mo.  142),  393. 
Smith  V.  Van  Loan  (16  Wend.  659), 

165. 
Smith  V.  Vertue  (30  L.  J.  C.  P.  56), 

227. 
Smith  V.  Weld  (2  Barr.  54),  394. 
Smith  V.   Whiting   (9  Mass.  334), 

148,  262,  345. 
Smith  V.  Winter  (4  M.  &  W.  454), 

424. 
Smith  V.   Wood    (37  Texas,   620), 

361,  375, 
Smock    V.   Pierson    (68  Ind.   405), 

172,  205. 
Smock  u,  Ripley  (62  Ind.  81),  28. 
Smout  V.  Ilbery  (10  M.  &  W.  1),  80, 

84. 
Snaith  v.  Mingay  (1  M.  &  S.  87), 

346,  506. 
Snead  v.   Coleman  (7  Gratt.  303), 

146. 
Snee  v.  Prescott  (1  Atk.  247),  268. 
Sneed  v.  Mitchell  (1  Haywood,  289), 

262. 
Snell  V.  Northside  Mill  Co.  (89  111. 

582),  270. 
Snevely  v.  Read    (9    Watts,  396), 

162. 
Snively  v.  Johnson  (1  Watts,  309), 

417. 
Snown  V.  Peacock  (2  C.  &  P.  215), 

289. 
Snow   V.    Goodrich    (14    Me.  235), 

124. 
Snow  V.  Perkins  (2  Mich.  238),  345, 

444,  509. 
Snyder  v.   Oatraau  (16   Ind.    265), 

2576,  269,  273. 

049 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Snyder  V.  Reno  (36  Iowa,  321)),  244. 
Snyder  v.  Riley  (fi  Barr.  164),  269. 
Snyder  V.  Studebaker  (19  Ind.  462), 

118. 
Snyder  V.  Van  Doreu  (46  Wis.  602), 

35,  283. 
Snyder  u.  Willcy  (33  Midi. 483),  179. 
Scares   v.  Clyn  (8  Q.  B.  (35   E.  C. 

L.  R.),24),  267. 
Society  For   Savings  v.  New  Lon- 
don (29 Conn.  174),  473,  478. 
Soffe  V.  Gallagher  (3  E.  D.  Smith 

507),  379. 
Solarte  v.   Palmer    (7   Bing.  530), 

346,  347. 
Solomons  v.   Bk.   of   England  (13 

East,   135),  464,  465. 
Solomons  v.  Jones  (3  Brev.  54),  42. 
Solser  V.   Brock  (3   Ohio  St.  302), 

423. 
Somerville  v.  Brown  (5  Gill,  399), 

251. 
Sou^e  V.  Bouney  (37  Me.  128),  183. 
Soule  V.   Shotwell  (52  Miss.  236), 

165. 
South,  Ex  parte  (3  Swanson,  391), 

5c. 
South  Boston  Iron  Co.  v.   Brown 

(63  Me.  139),  155,  170. 
Southall  V.  Riggs  (11  C.  B.  481), 

154,  180,  203. 
Southard  v.  Porter  (43  N.  H.  880), 

248,  295. 
South  Carolina  Bk.  v.  Case  (8  B.  & 

C.  433),  104. 
Southerland  v.  Whitaker  (5  Jones, 

5),  423. 
Souverbye  v.  Arden  (1  Johns.  Ch. 

240),  34d. 
Sowerby  v.  Butcher  (2  C.  &  M.  372) , 

170. 
Spadine  v.  Reed  (7  Bush,  455),  222. 
Spann  v.  Balzell  (1  Fla.  301),  313, 
348. 

950 


Spaulding  v.   Andrews  (48  Pa.  St. 

413),  220,  222,  226. 
Spaulding    v.    Evans    (2   McLean, 

139),  18.> 
Spaulding  v.  Putnam    (128  Mass. 

363),  270. 
Spear  v.  Pratt  (2  Hill,  582),  223. 
Speers  v.  Sewell  (4  Bush,  239),  52, 
Spence  v.  Crockett  (5  Baxt.  576), 

327. 
Spencer  v.  Ballon  (18   New  York, 

331),  301. 
Spencer  w.  Blaisdell  (4  N.  H.  198), 

464. 
Spencer    v.  Bk.   of  Salina  (3  Hill, 

520),  359. 
Spencer    v.    Dearth   (43    Vt.   98), 

373. 
Spencer  v.  Harvey  (17  Wend.  489), 

362,  364. 
Sperry  v.  Horr  (32  Iowa,  184),  28. 
Sperry  v.  Spaulding  (45  Cal.  544), 

178,  303. 
Spies  V.   Gilmore  (1  Comst.  321), 

271. 
Spies V.  Newberry  (2  Doug.  (Mich.) 

495),  346. 
Spitler  V.  James  (32   Ind.  203),  30. 
Spitz   V.   Fourth  Nat.  Bk.  (8  B.  J. 

Lea,  641),  162. 
Spooner  v.  Gardiner  (1  R.    &  M. 

84),  172a,  355. 
Spooner    v.    Holmes'  (102    Mass. 

503),  289,  461,  471,  473. 
Sprague  v.  Graham   (29   Me.  160), 

305. 
Sprague  v.   Tyson  (44    Ala.   340), 

327. 
Sprickill  v.  Martin    (72  N.  C.  92), 

377. 
Sprigg  V.  Bk.  of  Mt.  Pleasant   (10 

Pet.  265),  422. 
Springfield  Bk.  v.  Merrick  (14  Mass. 
322),  41,  197. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Sproat  V.  Mathews  (1  T.  R.  182), 

222.  227,  232. 
Spurgin    v.    McPheeters  (42    Ind. 

527),  26,  154,  158. 
Spurr  V.  Trimble  (1  A.  K.  Marsh. 

278),  75. 
Spyker  v.  Speoce  (8  Ala.  333),  121. 
Staats  V.  Hewlett  (4  Den.  559),  103. 
Stack  V.  Beach  (74  Ind.  571),  273. 
Stacy  V.  Baker  (1  Scam.  417),  606, 

507. 
Stafford  v.  Anders  (8  Fla.  38),  201. 
Stafford  V.  Bacon  (25  Wend.  384), 

162,   (1  Hill,  538),  162. 
Stafford  v.  Fargo  (35  111.  481),  295. 
Stafford  v.  Yates  (18  Johns.  327), 

335. 
Stainback  v.  Bk.  of  Va.   (11  Gratt. 

259),   81,   82,   212,  326,  327,  312, 

337. 
Stainback  v.  Read  (11  Gratt.  281), 

78«,  81. 
Stam  V.  Kerr  (31  Miss.  199),  379. 
Standage  v.  Creighton  (5  Car.  &  P. 

406),  363. 
Stanford  v.  Pruet  (27  Ga.  243),  506. 
Stanford  Bank  v.  Ferris  (17  Conn. 

259),  126. 
Stanton  v.  A.  &  C.  R.  R.  (2  Woods 

C.  C.  523),  471,  498. 
Stanton  v.   Allen  (5  Denio,   434), 
.    190. 
Stanton  v.  Blossom  (14  Mass.  116), 

335,  355. 
Stanwood  v.  Laughlin  (73  Me.  112), 

77. 
Stanwood  v.  Stanwood    (17  Mass. 

57),  64. 
Staples  V.  Franklin  Bk.  (1  Met.  43), 

316,  317.  464. 
Staples  V.  O'Kines    (1  Esp.   332), 

355. 
Star  Line  v.  Van  Vliet  (43  Mich. 

364),  77. 


Star    Wagon  Co.    v.    Swezey    (52 

Iowa,  394),  363. 
Stariu  v.  Town  of  Genoa  (23  N.  Y. 

447),  480,  481,  482. 
Starke  v.  Alford  (29  Texas,  2G0), 

155,  375,  376. 
Starke    v.    Cheeseman    (Carthew, 

509),  20. 
Starr  v.  Richmond  (30  111.  276),  377. 
State  V.  Boise  (2  Fairf.  474),  137. 
State  V.  Cilley  (1  N.  H.  97),  394. 
State  V.  Crisman  (2  Ind.  126),  Sid. 
State  V.  Green  (54  Mo.  540),  481. 
State  V.  Huff  (63  Mo.  288),  138. 
State  V.  Madison  (7  Wis.  688),  480, 

481. 
State  V.  Pilsbury  (30  La.  Ann.  705), 

141. 
State  V.  Polk  (7  Blackf.  27),  394. 
State  Sav.  Bank  v.  Hunt  (17  Kan. 

532),  163. 
State  V.  Stratton    (27  Iowa,  424), 

41,  394. 
State  V.  Sullivan  (51  Mo.  522),  481. 
State  V.  Taylor  (10  Ohio,  378),  28. 
State  V.  Town   of  Clark  (23  Minn. 

423),  481. 
State  V.  Trustees  of  Union  Town- 
ship (8  Ohio  St.  403),  482. 
State  V.  Van  Home    (7  Ohio    St. 

331),  482. 
State  V.   Wappels  (13  Iowa,  388), 

481. 
State   Bk.   v.  Ayres  (2  Halst.  130), 

162,  341. 
State    Bk.   v.   Coquillard    (6    Ind. 

232),  292,  293. 
State  Bk.  v.  Fearing  (ISPick.  533), 

259,  399. 
State  Bk.  v.  Fox   (3  Blatchf.  431), 

127,  310. 
State  Bk.  v.  Hayes  (3  Ind.  400),  3. 
State  Bk.  v.  Hennen  (16  Mart.  226), 

340. 

9.51 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


State  Bk.  V.  Hurd  (12  Mass.  171), 

314. 
State  Bk.  v.  Kain  (1   Breese,  45), 

120. 
State   Bk.   v.  McCoy     (t)9   Pa.    St. 

204),  57. 
State    Bk.   v.    Napier   (6    Humph. 

270),  318. 
State   Bk,  v.  Slau<?hter  (7  Blackf. 

133),  336. 
State  Bk.  v.  Thompson   (42  N.  H. 

369),  11. 
State  Bk.  V.  Wheeler  (21  Ind.  90), 

120. 
State    of  Arkansas  v.   Littlerock, 

etc.R.  R.  (3  Ark.  701),  480. 
State  of  Mo.  v.  Bk.  of  Mo.  (45  Mo. 

528),  136. 
State  Capitol  Bk.  v.  Thompson  (42 

N.  H.  370),  34c. 
State   Savings   Bk.    v.    Shaffer    (9 

Neb.  7),  392,  394. 
Statker  v.  McDonald    (6  Hill,  93), 

169. 
Steadman    v.    Duhamel    (1    C.   B. 

S88),  3. 
Steamboat  Charlotte  v.  Hammond 

(9  Mo.  63),  379,  380. 
Sternes  v.  Barrett  (1    Pick.    443), 

190. 
Stearns  v.  Burnham    (5  Greenleaf, 

261),  506. 
Stebbing  v.  Spicer   (19  L.  J.  C.  P. 

24),  17. 
Stebbins  v.    Phoenix  Ins.    Co.    (3 

Paige,  350,  497. 
Stedman  v.  Gooch  (1  Esp.  4),  340, 

381. 
Stedman  v.  Hart  (1  Kay,  007),  54. 
Steel    V.   Davis  Co.    (2   G.    Green 

(Iowa)  469),  140. 
Steele  v.  Curie  (4  Dana,  381),  506. 
Steele  v.  McElroy  (1  Sneed  (Tenn.) 

341),  87,  124. 

952 


Steele  v.    McDowell  (9   Sra.  &  M. 

193),  147. 
Steele  v.  McKinley  (43  L.  J.  R.  358), 

219. 
Stein  V.  Mobile  (24  Ala.  591),  481. 
Stein   V.   Yglesias    (5  Tyrw.    174), 

220,  269,  295. 
Steinbeck   v.   Treasurer,    etc.    (22 

Ohio  St.  144),  138. 
Steincs  v.   Franklin  Co.    (48    Mo 

167),  480. 
Steiuinger  v.  Hoch  (3  Wright,  263), 

12. 
Steman  v.  Harrison  (42  Pa.  St.  49), 

220,  226. 
Stemliartr.  Boker  (30  Barb.  -284), 

300. 
Stephens  v.  Monongahela  Nat.  Bk. 

(88  Pa.  St.  157),  158,  301. 
Stephens  v.   Spiers    (25  Mo.  386), 

174. 
Stephens  v.  Wilkinson  (2  B.  &  Ad. 

320),  205, 
Stephenson  v.  Dickson  (24  Pa.  St. 

148),  337. 
Stepenson    v.    Primrose    (8    Port. 

(Ala.)  155),  340,  362. 
Sterling  v.   Marietta,  etc.,  Co.  (11 

Serg.  &R.  170),  121,  424,425. 
Stern   v.  Freeman    (4    Met.  (Ky.) 

309),  5C. 
Sterry  v.    Robinson   (1   Day,   11), 

321. 
Stevens    v.    Androscoggin    Water 

Power  Co  (62  Me.  498),  227. 
Stevens  v.  Beals  (lOCush.  291),  63, 

262. 
Stevens  v.  Blount  (7  Mass.  240),  25. 
Stevens  v.  Boston,  etc.,  R.  R.  Co. 

(8  Gray,  262),  492. 
Stevens  r.  Campbell  (13  Wis.  315)-, 

165,  166. 
Stevens  r.   Corn  Ex.  Bk.  (3  Hun, 

150),  1G6. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Stevens  v.  Graham  (7  S.  &  R.  505), 

39-t. 
Stevens  v.  Park  (73  111.  387),  442. 
Stevens  v.  Stevens  (2  Hun,   470), 

252. 
Stevens  v.  Strong  (2  Sandf.  139), 

19. 
Stevenson  v.  Edwards  (27  La.  Ann. 

302),  170. 
Stevenson  v.   O'Neil  (71  111.  314), 

260,  300. 
Stevenson,  u.  Unkefer  (14  111.  105), 

292,  293. 
Stewart  v.  Allison   (6  S.  &  R.  324), 

324. 
Stewart  v.  Anderson  (59  Ind.  375), 

204,  286. 
Stewart  v.  Bramhall  (11  Hun,  139), 

196,  259. 
Stewart  v.  Eden  (2  Caines,  12),  313, 

814,  336,  340,  342,  348,  323,  423, 

424. 
Stewart  v.   Insall  (9  Texas,  397), 

202. 
Stewart  v.  Kennett  (2  Camp.  177), 

334,  335). 
Stewart  v.   Lispenard    (26   Wend. 

299),  52. 
Stewart  v.  Lord  Kirkwall  (3  Mad. 

Ch.  387),  62. 
Stewart  v.  Salamon  (94  U.  S.  434), 

296,  29c. 
Stewart  v.   Small   (2  Barb.    559), 

108. 
Stewart  v.  Smith  (28  111.  397),  269, 

296,  442. 
Stickney  V.   Mohler  (19  Md.  506), 

172a. 
Stiles   V.  Brown  (6   Vt.  563),  3id. 
Stiles   V.  Eastman    (1  Kelly,  205), 

422. 
Stillwell  V.   Aaron   (69  Mo.    539), 

175,  422. 
Stilwell  V.  Craig  (58  Mo.  24) ,  24. 


Stillwell  V.  How  (46  Mo.  589),  261. 
Stimson    v.    Whitney    (130  Mass. 

591),  99,  106,  289. 
Stivers  v.  Prentice  (3  B.  Mon.  461), 

313,  317. 
Stix  V.  Mathews  (63  Mo.  371),  152, 

335,  337. 
Stocken  v.   Collin    (9  C.  P.   653), 

346. 
Stockman    v.    Parr    (11    M.  &  W. 

809),  345. 
Stockman  u.  Riley  (2McCord,  398), 

310. 
Stockwell  V.  Bramble  (3  Ind.  428), 

220,  222. 
Stoddard  v.  Kimball  (6  Cush.  469), 

168,  293,  301,  304. 
Stoessiger  v.  S.  E.  R.  R.  Co.  (3  El. 

&B.  549),  11. 
Stokes  V.  Lewis  (1  T.  R.  20),  162. 
Stone    V.    Chamberlains    (20    Ga. 

259),  107. 
Stone  V.  Clough  (41  N.  H.  290) ,  373. 
Stone  u.Dean  (5N.  H.  502),  251. 
Stone  V.  Dennisou  (13  Pick.  1),  46. 
Stone  v.  Elliott  (11  Ohio  St.  252), 

802. 
Stone  V.  Hudgins  (28  Vt.  617),  136. 
Stone  V.   Marsh  (Ryan  &  M.   364), 

447. 
Stone u.  Metcalf  (1  Stark.  53),  33, 

41. 
Stone  V.  Peake  (16  Vt.  218),  201. 
Stone  V.  Seymour  (15   Wend.   19), 

377. 
Stone  V.  Smith  (6  Munf.  541),   199. 
Stone  V.   Wood   (7  Cow.  453),  87, 

124. 
Stoneman  v.  Pyle  (35  Ind.  103), 28. 
Stonerw.  Ellis   (6    Ind.  161),   393. 
Stoney  v.  American  Life  Ins.  Co. 

(11  Paige,  635),  116. 
Storeru.  Logan  (9  Mass.  55),  222, 

226. 

953 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Storm   V.    Sterling  (3   Ellis    &  B. 

382),  17. 
Story  V.  Perry  (4  C.   &  P.  52r,),  46. 
Stouclenmire    v.    Ware     (48     Ala. 

589),  170. 
Stout  V.  Benoist  (39  Mo.  280),  399. 
Stoutouburg  V.  Lybraud  (13   Ohio 

St.  228),  192. 
Stoutiraore   v.  Clarli  (70  Mo.  477), 

118. 
Stover r.  Hamilton  (21  Gratt.  273),, 

24,  296. 
Straker    v.    Graham   (4   M.    &   W. 

721),  215,  216. 
Strange  v.  Wigney  (6   Bing.   677), 

288,  300. 
Straughan  v.    Fairchild    (80  Ind. 

598),   1G8. 
Staus  V.   Eagle  Ins.  Co.    (5  Ohio 

St.  59),  115. 
Strawbridge  v.  Robinson    (5   Gil- 
man,  470),  3. 
Streatfield  v.   Halliday    (3    T.    R. 

782),  13. 
Strieker  I'.  Tinkham   (35  Ga.  176), 

50G. 
Strickland    v.    Railroad     Co.    (27 

Miss.  209),  481. 
Stringfield  v.    Heiskell    (2     Yerg. 

64G),  241. 
Stroh  V.  Hinchman  (37  Mich.  490), 

79. 
Strohecker   v.    Cohen    (1    Spears, 

349),  222,  226. 
Strong  V.   Foote    (42    Conn.   203), 

46. 
Strong  V.  Foster    (17   C.    B.  201), 

232,  422. 
Strong  v.  Hart    (6   B.  &    C.    160), 

380. 
Strong  V.  Jackson    (123  Mass.  60), 

305. 
Stroud    V.    Marshall    (Cro.    Eliz. 

398),  52. 
954 


Strnthers   v.    Kendall   (41    Pa.  St. 

214),  165. 
Stuber  v.  Shack  (83  HI.  191),  175, 

424. 
Studenbaker  v.   Man.  Co.  (70  Mo. 

274),  300. 
Stults   V.  Silva    (119    Mass.  139), 

25. 
Sturdy  v.   Henderson    (4  B.  &  Aid. 

592),  316,  464. 
Sturges  V.  Miller  (80  111.  241),  247, 

280. 
Sturgis  V.  Bk.   of  Circleville   (11 

Ohio  St,  153),  78,  120. 
Sturgis  i;.  Corp.  (13  Ves.  190),  62. 
Sturgis  V.  Derrick  (Wight,  76),  358, 
Sturgis  V.  Fourth  Nat.  Bk.  (75  111. 

695),  222,  223. 
Sturtevant    v.    City    of    Alton    (3 

McLean,  393),  133,  134,  481. 
Sturtevantu.  Ford  (4  M.  &  G.  101), 

295. 
Sturtevant    v.   Jacques  (14   Allen, 

523),   145. 
Sturtevant  v.  Liberty  (46  Me.  457), 

138,  139. 
Sturtevant  u.  Randall  (53  Me.  149), 

272. 
Succession  of  Weil    (24   La.  Ann. 

139),  256,  259. 
Suckley  u.   Furse  (15  Johns.  338), 

425. 
Suffolk  Bk.  V.  Lincoln  Bk.  (3  Ma- 
son, 1),  464. 
Suffolk     Bk.     V.    Worcherter  Bk. 

(5  Pick.  106),  310.     , 
Sullivan  v.  Collins  (18  Iowa,  228), 

174. 
Sullivan     v.    Deadman     (19    Ark. 

486),  327. 
Sullivan  v.  Morrow    (4  Ind.   425), 

424. 
Summers  v.  Hutson   (48  Ind.  228), 

244. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Summers  v.  Mills  (21  Texas,  77), 

511. 
Sumner    v.   Bowen    (2  Wis.  524), 

327. 
Sumner  v.  Summers  {5i  Mo.  340), 

183. 
Sumter  v.  Welch    (1    Brev.   539), 

202. 
Supervisors     of     Mercer     Co.    v. 

Hubbard  (45  111.  139),  474. 
Supervisors  v.    Schenck  (5  Wall. 

782),  83,  116,  473,  480,  481,  482. 
Surles  V.  Pipkin  (69  N.  C.  513),  54. 
Suse  V.  Pompe  (98  E.  C.  L.  R.  538), 

256. 
Susquehanna  Valley  Bk.  v.  Loomis, 

(85  N.  Y.  207),  259,  357. 
Sussex  Bk.  v.  Baldwin  (2  Harrison, 

487),  311,  314,337. 
Sutcliffe  V.   McDowell    (2  Nott  & 

McC.  251),  355. 
SutlifC  V.    Attwood    (15    Ohio   St. 

186),  379. 
Sutton,  Ex  parte  (2  Cox,  84),  89. 
Sutton  V.  Toomer  (7  B.  &  C.  416), 

394. 
Sutton  V.  Warren  (10  Met.  451),  63. 
Suydam  v.«Westfall  (4  Hill,  211), 

14,  196,  376. 
Swafford  v.  Ferguson  (3  Lea,  292), 

47. 
Swall  ».  Clarke  (51  Cal.  227),  280. 
Swan  V.  Cox  (1  Marsh.  179),  227. 
Swan  V.  Hodges  (3  Head,  251),  317-, 

362. 
Swan  V.  Nesmith  (7  Pick.  220),  86. 
Swanell  v.   Watson    (71   HI.  456), 

285. 
Swansey  v.   Breck  (10  Ala.    533), 

227. 
Swanzer  v.  Mayberry  (59  Cal.  91), 

172. 
Swanzey  v.  Parker  (50  Pa.  St.  441), 

244. 


Swartz  V.  Redfield  (13   Kan.  550), 

310,  336. 
Swazey  t?.  Vanderheyden  (10  Johns. 

33),  48. 
Swayne  v.   Turner    (17   Kan.  629), 

318. 
Swayze  v.   Britton  (17  Kan.    625), 

327,  335. 
Sweat  V.  Hall  (8  Vt.  187),  63. 
Sweeney  v.  Easter    (1  Wall.  166), 

268. 
Sweeney  v.  Thickston  (77  Pa.   St. 

131), 28. 
Sweet  V.  Carver  Co.  (16  Minn.  107), 

142. 
Sweet  w.  Chapman  (14  N.  Y.  S.  C.  (7 

Hun)  576),  292. 
Sweet  V.   County    Commissioners, 

(16  Minn.  107),  138. 
Sweet  V.  McAllister  (4  Allen,  355), 

261. 
Sweet  V.  Titus  (11  N.  Y.  S.  C.  639), 

456. 
Sweeting    v.   Fowler    (1    Starkie, 

106),  17. 
Sweeting  v.   Halse    (9  B.  &  C.  (17 

Eng.  C.  L.  R.)  365),  332. 
Sweetland  v.  Creigh  (15  Ohio,  118), 

29. 
Sweetzerv.  French    (13  Met.  262), 

27,2dd,  (2Cush.  309),  98. 
Swiftu.  Smith  (102  U.  S.  444),  289. 
Swift  V.  Bennett   (10   Cush.    436), 

46. 
Swift  V.  Tyson  (16  Pet.  1),  154,  164, 

165,  166,  289,  294. 
Swift  V.  Whitney  (20  111.  144),  29. 
Swilley  v.  Lyon  (18  Ala.  558),  14. 
Swinyard  v.  Bowes  (5  M.  &  S.  62), 

367,  379,  380. 
Swope  V.  Ross  (40Pa.  St.  186),  209, 

224. 
Sylvester  v.  Downer  (20  Vt.  355), 

270,  272. 

955 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Sylvester  v.  Staples  (U  Me.  490),  31 . 
Syine  v.  Brown  (19  La.  Aim.  147), 

2(;i,  270. 
Syracuse,  etc.,  R.  R.  Co.  v.  Collins 

(3Lans.  29),  442,  443. 

T. 

Tal)er  v.  Cannon  (8  Met.  456),  77. 
Taft  V.  Boyd  (13  Allen,  84),  379. 
Talbot  V.  Bk.  of  Rochester  (1  Hill, 

295),  399,  451. 
Talbot  V.  Dent    (9   B.  Mou.  526), 

481. 
Talbot  u.  Gay  (18  Pick.  535),  421. 
Talbot  V.  Nat.  Bk.  (129  Mass.  67), 

314,  361,  373. 

Tallahassee   Man.    Co.,  In  re    (64 

Ala.  593),  303. 
Talleyrand   v.  Boulanger    (3   Ves. 

Jr.  447),  506. 
Tandy  V.  Mastersou  (1  Bibb,  330), 

48. 
Tapleyu.  McGee  (6  Ind.  56),  47. 
Tapley  v.  Martens    (8  T.  R.  451), 

456. 
Tappauv.  Ely  (15  Wend.  363),  41. 
Tappan  v.  RedBeld   (1  Halst.  Ch. 

339),  75. 
Tarbell  v.  Sturtevant  (26  Vt.  513), 

304. 
Tardy  v.  Boyd  (26  Gratt.  632),  354, 

365. 
Tarleton  v.  Southern  Bk.  (44  Ala. 

229),  66,  185. 
Tassel  v.  Lewis  (1  Ld.  Raym.  743), 

315,  316. 

Tassey  v.  Church    (4   Watts   &  S. 

346),  146. 
Tate  V.    Hilbert  (2  Ves.   Jr.    Ill), 

159, 252,  448. 
Tater.  Sullivan  (30  Md.  464),  327. 
Tatlock  V.  Harris  (3T.  R.  174),  19. 
Tatum  V.  Kelly  (25  Ark.  209),  184, 

198. 

956 


Taunton  Bk.  v.  Richardson  (5  Pick. 

436),  348,  364. 
Taup  V.  Drew  (10  How.  218),  375. 
Taylor    v.   Allen    (36    Barb.  294), 

167. 
Taylor  v.  Bk.  of  HI.    (7  T.  B.  Mon. 

676),  326. 
Taylor  v.  Beck  (3  Rand.  316),  178, 

280. 
Taylor    v.  Binney    (7  Mass.   481), 

419. 
Taylor  r.  Bowles  (28  La.  295),  280. 
Taylor  v.  Briggs  (Moody  &  M.  28), 

244,  380. 
Taylor  v.  Bruce  (Gilmer,  42),  292. 
Taylor  v.  Burgess  (5  H.  &  N.  1), 

422. 
Taylor  v.  Chicago,  etc.,  R.  R.  Co. 

(74  111.  8G),  77. 
Taylor  u.  Craig  (2  J.  J.  Marsh.  449), 

286. 
Taylor  •«.  Croker  (4  Esp.  187),  49, 

230,  262. 
Taylor  v.   Curry  (109    Mass.    36), 

300. 
Taylor  v.  Dansby  (42  Mich.  84),  51, 

174. 
Taylori?.  Dobbins  (1  Strange,  399), 

12. 
Taylor  v.    Drake  (4  Strobh.  431), 

222. 
Taylor  v.  French  (2  Lea,  560),  272, 

273,  362,  363,  364. 
Taylor  v.  Hillyer  (3  Blackf.  433), 

98. 
Taylor  v.  Jacoby  (2  Pa.  St.  495), 

316. 
Taylor   v.  Mathews    (3  T.    R.  83), 

205. 
Taylor  r.  McCune  (11  Pa.  St.  460), 

310. 
Taylor  V.  Page    (6  Allen,  86),  305. 
Taylor  v.  Reese  (44  Miss.  89),  247. 
Taylor  v.  Ross  (3  Yerg.  330),  418. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Taylor  v.    Sauford  (7  Wheat.  13), 

376,  377. 
Taylor  v.  Shelton  (30  Coun.  122), 

84,   145. 
Taylor  v.  Sip  (1  Vroom,  284),  434, 

442. 
Taylor  u.  Snyder  (2  Deu,  145),  314, 

358,  359. 
Taylor  u.  Starkey  (59  N.  H.  142), 

77. 
Taylor  ».  Surgit  (14  Him,  116),  148. 
Taylor  v.   Thomas  (13  Kan.  217), 

34d. 
Taylor  v.  Wetmore  (10  Ohio,  490), 

420, 500. 
Taylor  w.   Williams   (24  Md.  199), 

314,  456. 
Taylor  v.    Young  (3  Watts,  339), 

356,  343. 
Teed  v.  Elworth  (14  East,  210),  49. 
Teel  V.  Otis  (66  Me._329),  84. 
Temple   v.    Turner    (65  Mo.    696), 

270. 
Ten  Eyck  v.  Vanderpoel  (8  Johns. 

93),  147,  170. 
Tenney  v.  Prince  (4  Pick.  385),  151, 

157,   (7   Pick.  24S),  157,  266,  270, 

417. 
Ten-ell  v.   Branch    Bank  (12   Ala. 

502),  121. 
Terry  V.  Allis  (16  Wis.  478),  247. 
Terry  v.  Farago  (10  Johns.  114), 78. 
Terry  w.Hazlewood  (1  Duval,  101), 

392. 
Terry  v.   Parker  (6  Ad.  &  E.  502), 

348,  355. 
Terry  v.   Kagsdale  (33  Gratt.  348), 

455. 
Texas  v.  Hardenberg  (10  Wall.  58), 

295. 
Thackeray  v.  Blockett    (3  Camp. 

164,  355. 
Thackeray  v.  Hanson  (1  Col.  365), 

123. 


Thatcher    v.   Dinsmore    (5   Mass. 

299),  87,  145,  170,  379. 
Thatcher    v.    Stevens     (48    Conn. 

561),  270,  272. 
Thatcher  v.   West  Kiver  Nat.  Bk. 

(19  Mich. 196),  158,  301. 
Thayer  v.  Elliott  (16  N   H.  102),  4, 

506. 
Thayer  v.  Montgomery  Co.  (3  Dil- 
lon C.  C.  389),  475. 
The  Governor  v.  Dailey    (14  Ala. 

469),  73. 
The  Hampton  (5  Wall.  372),  66. 
The  Julia  (8  Crauch,  131),  66. 
The  Kimball  (3  Wall.  45),  379. 
The  Olbers  (3Binu.   148),  492. 
The  Oriflamme(l  Saw.  176),  492. 
The  Prize  Cases  (2  Black,  635),  66. 
The   Sally  Magee    (3  Wall.    457), 

492,  493. 
The  Thames  (14  Wall.  98),  492. 
The  Venice  (2  Wall.  258),  66. 
The  William  Bagaley  (5  Wall.  377), 

66,  354. 
Thiedemann  v.  Goldsmith  (1  DeGex, 

F.  &  J.  4),  154,280. 
Thiel  V.  Conrad  (21  La.  Ann.  214), 

227,  310. 
Thing  V.  Libbey  (16  Me.  55),  50. 
Third  Nat.   Bk.   v.   Allen   (59  Mo. 

310),  31,  400,  451. 
Third  Nat.   Bk.  v.   Blake  (73  New 

York,  260),  175. 
Third  Nat.  Bk.  v.  Clark  (23  Minn. 

263),  273. 
Third  Nat.   Bk.  v.  Lange  (51  Md. 

138),  145,  270,  300. 
Third- Nat.  Bk.  v.  Nat.  Bk.   (102  U. 

S.  663),  268. 
Thomas  v.   Bishop    (Chitty,    Jr., 

278),  125,  227. 
Thomas  v.  City  of  Richmond  (12 

Wall.  354),  479. 
Thomas  v.  Dike  (11  Vt.  273),  47. 
957 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Thomas  v.  Kinsey  (8  Ga.  421),  295. 
Thomas  v.  Jennings  (13  Miss.  627), 

271. 
Thomas  v.  Marsh  (2  La.  Ann.  353), 

317. 
Thomas  v.  Mayo  (56  Me.  40),  363. 
Thomas  v.  Miles  (3  Ohio  St.  274), 

190. 
Thomas  v.  Port  Huron  (27   Mich. 

320),  481. 
Thomas   v.  Ruddell  (66  Ind.  326), 

285. 
Thomas  v.   Roberts    (16   M.  &  W. 

778),  47. 
Thomas  v.  Shoemaker  (6  "Watts  & 

S.  179),  315,  316. 
Thomas  v.  Thomas  (2  Q.  B.  851), 

151,  (7  Wis.  476),  154. 
Thomas  v.  Todd  (6  Hill,  340),  244, 

464,  466. 
Thomas  v.  Watkins  (16  Wis.  478), 

256. 
Thomason  v.  Lee  Co.  (3  Wall.  320), 

133,  475. 
Thompson  v.     Armstrong  (7   Ala. 

256),  303. 
Thompson!?.  Bank  of  British  North 

America  (82  N.  Y.  1),  77. 
Thompson  v.  Brown  (Moody  &  M. 

40), 377. 
Thompson  v.  Cummings  (2  Leigh, 

321),  321. 
Thompson  v.  Davenport  (9  B.  &  C. 

78),  87. 
Thompson  v.   Downing    (14   L.  J. 

Exch.  320),  48,  491. 
Thompson   v.    Field  (38  Mo.  325), 

305. 
Thompson  v.    Flower     (13    Mart. 

(La.)  301),  312. 
Thompson  v.  Gray  (63   Me.   228), 

166,  167,  170,425. 
Thompson  v.   Hamilton  (12   Pick. 

425),  47. 

958 


Thompson  v.  Houston,  (31  Texas, 

610),  25. 
Thompson  v.    Ketchum   (8  Johns. 

189),  24,  314,  315,  506. 
Thompson  v.  Lay  (4  Pick.  48),  50. 
Tliompsonv.  Lee  Co.  (3  Wall.  327), 

471,473,   475,  476,  477,  378,  480, 

481. 
Tliompson  v.  Maugh  (3  Iowa,  342), 

147,170. 
Thompson  v.  Pickel  (20  Iowa,  490), 

412. 
Thompson  v.   Pitman    (Fost.  &  F. 

N.  p!  339),  455. 
Thompson    v.    Posten    (1   Duvall, 

41.5),  301. 
Thompson  v.  Powles  (2  Sim.  194), 

511. 
Thompson  v.    Shelby  (3  Sm.  &  M. 

296),  251. 
Thompson    v.   Shepherd    (12   Met. 

311),  295. 
Thompson  v.  Sloan  (23  Wend.  71), 

29?>. 
Thompson  v.  Thompson  (4  B.  Mon. 

502),  172. 
Thompson  v.  Toland  (48  Cal.  99), 

497. 
Thompson    v.    Wharton    (7   Bush, 

563),  173. 
Thompson    v.  Wheeler  Manf.   Co. 

(29  Kan.  476),  203. 
Thompson  v.      Williams  (14  Cal. 

162),  336,  344,  345,  346. 
Thompson  v.  Wilson  (27  Ind.  370), 

380. 
Thorington  v.  Smith  (8  Wall.  12), 

296,  29c. 
Thorn  v.  Rice  (15  Me.  263),  339. 
Thornton  v.  Appleton  (29  Me.  298), 

52. 
Thornton  v.  Dick  (4  Esp.  270),  221. 
Thornton  v.  lUiugworth    (2  Barn. 

&C.  824),  50. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Thornton  v.  Maynard  (10  Cora.  PL 

L.  R.  695),  376. 
Thornton  v.  Rankin   (19  Mo.  193), 

145. 
Thornton  v.  Wynn  (12  Wheat.  183), 

864,  365. 
Thorp  V.    Boothe    (R.  &  M.    389), 

211. 
Thorp  V.  Craig  (10  Iowa,  461),  506, 

509. 
Thorpe  v.  Peck  (28  Vt.  127),  317. 
Thrall  v.  Norton    (44  Vt.  386),  201, 

300. 
Thrall  v.  Newell  (19  Vt.  202),  244. 
Thrash  v.  Ely  (2  Sm.  &  M.  147),  3, 

420. 
Thrasher  v.  Everhart  (3  Gill  &  J. 

319),  506. 
Thruppu.  Fielder  (2  Esp.  628),  50. 
Thurlow  V.  Gilmore  (40  Me,  378), 

50. 
Thurman  v.  Van  Brunt    (19  Barb. 

409),  455. 
Thurston    v.     Munn      (1     Greene 

(Iowa)  231),  87. 
Ticknor  v.    Roberts    (11   La.  14), 

326. 
Ticonic  Bk.  v.  Smiley  (2  Me.  225), 

260. 
Ticonic  Bk.   v.  Stackpole    (41  Me. 

302),  3,  321,  327. 
Tidmarsh    v.  Grover   (1   Maule  & 

S.  735),  374. 
Tiernan  v.  Jackson  (5  Pet.  580),  5, 

209. 
Tift  V.  Phoenix  Ins.  Co.    (6   Lans. 

198),  204. 
Tilden  v.  Barnard   (43  Mich.  376), 

87,  123,  303. 
Tiller  v.  Spradley  (39  Ga.  35),  85. 
Tillinghast    v.    Wheaton    (8  R.  I. 

536),  252. 
Tillotson  V.  Grapes  (4  N.  H.  444), 

204. 


Timmins  v.  Gibbons  (18  Q.  B.722), 

4G6. 
Tirams  v.  Delisle    (5  Blackf.  447), 

339,343. 
Tindal  v.  Brown  (1  I.  R.  167),  335, 

344,  347. 
Tinker  v.  McCauley  (3  Mich.  188), 

273,  419. 
Tisdale  v.  Maxwell  (58  Ala.  40),  18, 

153,  379. 
Titcomb  v.   Thomas  (5  Me.  282), 

247,  248. 
Titus  V.  Great  Western  Turnpike 

Co.)  5  Lans.  253),  438. 
Titus  V.  Kyle    (10    Ohio  St.  404), 

124. 
Tobey  v.   Barber    (5    Johns.    68), 

379,  380,  381. 
Tobey  v.  Berly  (26  111.  426),  348. 
Tobey  v.  Chipman  (13  Allen,  133), 

288. 
Tobey  v.  Lennig  (14  Pa.    St.  483), 

345. 
Todd  V.  Ames  (60  Barb.  462),  62. 
Todd  V.  Bank  of  Kentucky  (3  Bush, 

606),  394,  506,  507. 
Todd  V.  Lee  (16  Wis.  480)  61,  (15 

Wis.  365),  62. 
Todd  V.    Neal's  Admr.    (49     Ala. 

266),    3,  322,  347,  348,  509. 
Todd  V.  Shelburne  (15  N.  Y.  S.  C. 

(8  Hun)  512),  293. 
Todd  V.  Wick   (36  Ohio   St.  387), 

155,  295,  303. 
Toledo  Iron    &    Agr.     Works    v. 

Heisser  (51  Mo.  128),  85. 
Tolman  v.  Harahan  (44  Wis.  133), 

105,  219. 
Tombeckbee    Bank  v.   Dumell    (5 

Mason,  56),  107. 
Torabeckbee  Bank    v.  Stratton    (7 

Wend.  429),  423. 
Tompkins   v.    Ashby    (6    B.  &  C. 

541),  23. 

959 


TABLE   OF   CASES    CITED. 


References  are  to  Sections. 


Tompkins  v.  Woodward  (5  W.  Va. 

229),  98. 
Took  17.  Tuck  (4  Biug.  224),  193, 
Toomer  v.  Rutland  (57  Ala.  379), 

392,  397. 
Tooting  V.  Hubbard  (3  Bos.  &  Pul. 

291),  218. 
Tootle  Ex  parte  (4  Ves.  372),  25. 
Torbett  v.  Worthy  (1  Hcisk.  107), 

199, 
Torrey  v.  Baxter  (13  Vt.  452),  379. 
Torrcy  v.  Dustin  Monument  Assn. 

(5  Allen,  327),  122. 
Torrey  v.  Fo.ss  (40  Me.  74),  355. 
Torrey  v.  Hadley   (27  Barb.  196), 

379. 
Tower  v.  Appleton  (3  Allen,  387), 

467. 
Towle  V.  Dresser  (73  Me.  252),  47. 
Town  V.  Culver  (19  Wall.  84),  471. 
Town  of  Cicero  v.  Clifford  (53  Ind. 

191),  477. 
Town  of  Coloma  v.  Eaves  (92  U.  S. 

484),  480,  482. 
Town  of  Eagle  v.  Kohn  (84  111.  292), 

178,  280,  374,  480. 
Town  of  East  Lincoln  v.  Davenport 

(94  U.  S.  801),  480,  482. 
Town  of  Genoa  v.  Woodruff  (92  U. 

S.  502),  482. 
Town  of  Middleport  v.  ^tna  Life 

Ins.  Co.  (82  111.  562),  482. 
Town  of  New  Athens  v.  Thomas 

(82  111.  259),  117. 
Town  of  Queensbury  v.  Culver  (19 

Wall.  84),  481. 
Town  of  South  Ottawa  v.  Perkins 

(94  U,  S.  262),  480,  482, 
Town  of  Venice  v.  Murdock  (92  U. 

S.  490),  482. 
Towne  v.  Rice  (122  Mass.  67),  20, 

123,  145. 
Townsend  v.  Bk.  of  Racine  (7  Wis. 

185),  244,  466. 
960 


Townsend  v.  Corning  (1  Barb.  627), 

190. 
Townsend  v.  Derby  (3  Mete,  263), 

31,  152, 
Townsend  v.   Lorain  Bk.  (2  Ohio 

St,  355),  346,  347. 
Townsend  v.  Star  Wagon  Co.  (10 

Neb,  615),  394. 
Township  of  Burlington  v.  Beasley 

(94  U.  S.  314),  481. 
Township  of  East  Oakland  v.  Skin- 
ner (94  U.  S.  257),  482. 
Township  of  Pine  Grove  v.  Talcott 

(19  Wall,  666),  481. 
Townsley  v.  Samrall  (2  Pet,  170), 

164,  210,  215,  222,  220,  326,  327. 
Tracy  v.  Talmage  (14  N.  Y.  162), 

116,  198. 
Trabue  v.  Short  (5  Cold.  293),  508. 
Trafford  v.  Hall  (7  R.  I.  104),  295. 
Train  v.  Jones  ril  Vt.  44),  420. 
Tramwell  v.  Hudmon  (56  Ala.  237), 

408. 
Trask  v.   Martin   (1  E.  D.  Smith, 

505),  315. 
Travers  v.  Crane  (15  Cal.  12),  80, 
Treadwell  v.  Commiss  (II  Ohio  St. 

190),  480,  482. 
Treadway  v,  Nicks  (3  McCord,  195), 

305. 
Treanor  v.  Tingling  (37  Md.  491), 

424, 
Trebilock  v.  Wilson  (12  Wall.  687), 

375. 
Trego  V.  Lowery  (8  Neb.  238),  155. 
Treuttel    v.    Barandon    (8  Taunt. 

100),  82,  268. 
Trickey  v.  Lame  (6  M.  &  W.  278), 

200,  203. 
Trieber  v.  Commercial  Bk.  (31  Ark". 

128),  34c. 
Trigg  V.  Taylor  (27  Mo.  245),  397. 
Trimbey  v.  Vignier  (1  Bing.  N.   C. 

159),  506,  508. 


TABLE    OF    CASES    CITED. 


Keferences  are  to  Sections. 


Trimble  v.  Thora  (16  Johns.  152), 

305,  415. 
Triplette.  Huut  (3  Daua,  126),  335. 
Tripp  V.    Curtiuus  (36  Mich.  494), 

486,  487,  488. 
Tritt  V.  Colclwell  (31  Pa.  St.  228), 

63. 
Trotter  v.  Curtis  (19  Johus.  160), 

196. 
Troy  City  Bk.  v.  Laumau  (19  N.  Y. 

477),  227,  314,  394. 
True  V.  Fuller  (21  Pick.    140),  419. 
True  V.  Thomas  (16  Me.  36),  442, 

445,  453,  454. 
Trueblood  v.   Trueblood    (8    Incl. 

195),  47. 
Trumbull    v.    Nicholsou     (27    111. 

149),  80. 
Trull  t?.  Menetou  (Cowp.  544),  162. 
Trullinger  v.    Kofolk    (7  Oregon, 

228),  377. 
Trumball?;.  Tilton  (21  N.  H.  129), 

162. 
Trunday  v.  Farrar   (32   Me.   225), 

83. 
Trust  Co.   V.  Nat.  Bk.   (101  U.    S. 

70), 419. 
Trustees    of    Orphan    School     v. 

Fleming  (10  Bush,  234),  161. 
Trustees  of  Schools  v.  McCormick 

(41  111.  323),  83. 
Trustees  of  University  v.  Moody 

(62  Ala.  389),  117. 
Tryon  v.  Oxley  (3  Iowa,  289),  146, 

447. 
Tucker  v.  Bradley    (33   Vt.    325), 

34a. 
Tucker  v.    Fairbanks     (98    Mass. 

101),  123,  124,  125. 
Tucker  v.  Justices   (13    Ired.   L. 

434),  136. 
Tucker  v.   Roberts  (16  Q.  B.   560), 

230. 
Tucker  v.  Rouk  (43  Iowa,  80),  174. 


CI 


Tucker    v.   Shorter   (17  Ga.   620), 

1.36. 
Tucker  v.  Wilson  (1  P.  W.   M.  S. 

261),  304. 
Tuckerman  v.  French  (7  Me.  115), 

420. 
Tuckerman  v.  Hartwell    (3  Green- 
leaf,  147),  41a. 
Tullett  V.  Armstrong  (4  My.  &  Cr. 

377),  62. 
Tunno  v.  Lague  (2  Johns.  Cas.  1), 

354. 
Tupper  V.  Caldwell  (12  Met.  559), 

46. 
Turber  v.   Caverly   (42  N.  H.  74), 

363. 
Turk  V.  Richmond  (13  Barb.  533), 

198. 
Turnau  v.  Temke  (84  111.  286),  80. 
Turnbull  v.   Block    (31    Ohio    St. 

649),  175. 
Turnbull  v.  Bowyer  (40  N.  Y.  456), 

259,  357. 
Turnbull  v.   Thomas   (1     Hughes, 

172),  12. 
Turner  v.  Armstrong  (9  Yerg.  412), 

251. 
Turner  v.   Bank  of  Fox  Lake   (3 

Keys,  425),  456. 
Turner  v.   Billagrara  (2   Cal.   523), 

392. 
Turner  v.  Browden  (5  Bush,  216), 

. 155,  230. 
Turner  v.   Gaither  (83  N.  C.  357), 

50. 
Turners.  Hulme  (4  Esp.  11),  162. 
Turner  v.    Keller    (66  N.  Y.   66), 

259. 
Turner  v.  Leach  (4  B.  «&  Aid.  451), 

335,  337,  373. 
Turner  v.  P.   &.  S.   R.   R.  Co.  (95 

111.  134),  26,  498. 
Turner  v.  Rogers  (8  Ind.  140),  327. 
Turner  v.  Rusk  (53  Md.  65),  52,55. 
961 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Turner  v.   Sampson    (2  Q.  B.    Div. 

23),  355. 
Turner  v.  Stones    (1    Dow.  &    L. 

122),  4G6. 
Turner  v.  Tredway  (53  N,  Y.  650), 

1G8. 
Turpin  v.  Thompson  (2  Met.  (Ky.) 

420), 252. 
Tuttle    V.    Bartholomew    (12  Met. 

454),  419. 
Tuttle  V.  Fowler  (22  Conn.  58),  64. 
Twopenny  v.  Young  (3  Barn.  &  C. 

208),  425. 
Tye  17.  Gwynne  (2  Campb.  346),  200, 

201,  203. 
Tyler  v.  Gould  (48  N.  Y.  682),  209, 

452. 
Tyson  v.  Oliver  (43  Ala.  608),  339, 

342. 

u. 

Ubsdell    V.    Cunningham   (22  Mo. 

124),  25. 
Uhl  V.  Harvey  (78  Ind.  26),  106. 
Ulrich  V.  McCormick  (66  Ind.  246), 

106. 
Ulster    Co.    Bk.    v.  McFarland  (5 

Hill,    432),  226,   (3  Denio,  553), 

226,  500. 
Underhill  v.  Gibson  (2  N.  H.  352), 

123. 
Underhill  v.  Phillips  (10  Hun  (N. 

Y.  S.  C.)  591),  31,  152. 
Unger  v.  Boas  (1  Harris,  601),  259. 
Union  Bk.  v.  Beirue  (1  Gratt.  226), 

78a. 
Union  Bk.  v.  Coster  (3  N.  Y.  214), 

500. 
Union  Bk.  v.  Ellicott  (6  Gill  &  J. 

363),  464. 
Union  Bk.   v.   Fowlkes  (2   Sneed, 

555),  213,  326,327. 
Union  Bk.  v.  Hyde  (6  Wheat.  572), 

321,  327,  363. 
962 


Union  Bunk  v.  Jacobs  (6  Humph. 

515),  115. 
Union  Bk.  v.  Laird  (2  Wheat.  390), 

497. 
Union  Bk.  v.  Magruder  (7  Pet.  287), 

363. 
Union     Bk.     v.    Middlebrook    (33 

Conn.  95),  327. 
Union  Bk.  v.  Smiser  (1  Sneed,  501), 

39,  379. 
Union  Bk.  v.  Warren  (4  Sneed,  171), 

467. 
Union  Bk.  v.  Willis  (8  Met.  504), 

157,  212,  270,  313,  336. 
Union  Ins.  Co.  v.  Greenleaf  (64  Me. 

123),  25. 
Union  Nat.  Bk.  v.  Barber  (56  Iowa, 

559),  303. 
Union  Nat.  Bk.   v.    Carr    (15  Fed. 

Rep.  438),  189. 
Union  Nat.  Bk.  v.  Ocean  Co.    Bk. 

(80  111.  212),  452. 
Union  Nat.  Bk.  v.  Roberts  (45  Wis, 

373),  304,  392,  394. 
Union  Nat.   Bk.  v.   Underhill   (21 

Hun  (N.  Y.)  178),  98. 
Union  Trust  Co.  v.  Chicago  R.  R. 

Co.  (7  Fed.  Rep.  513),  26,  498. 
Union  Trust  Co.  v.  Monticello,  etc., 

R.  R.  (63  N.  Y.  314),  471. 
U.  S.  V.  Bank  of  Columbus  (21  How. 

356),  120. 
U.  S.  V.  Bank  of  Georgia  ( 10  Wheat. 

333),  464,  466. 
U.  S.  V.  Bk.  of  Metropolis  (15  Pet. 

377),  132,  154,  227. 
U.  S.  V.  Barker  (1  Paine  C.  C.  156), 

66,  (4  Wash.  C.  C.  464),  211,  321, 

337. 
U.  S.  V.  Boyce  (2  McLean,  352),  137. 
United  States  v.  Buford  (3  Pet.  12, 

30),  241. 
U.    S.  V.  Central  Nat.  Bk.  (6  Fed. 

Rep.  134),  132. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


United  States  v.  Fort  Scott  (99  U. 

S.  152),  133. 
U.  S.  v.  Grossmeyer  (9  Wall.  72), 

80,  354. 
U.  S.  V.  Hodge  (6  How.  279),  425. 
U,  S.  V.  January  (7  Cranch,  872), 

377. 
U.  S.  V.  Kirkpatrick  (9  Wheat.  720), 

377. 
XJ.  S.  V.  Lapiue  (17  Wall.   G02),  80. 
U.  S.  V.  Nat.  Park  Bk.  (6  Ired.  Rep. 

852),  399,  400. 
U.  S.  V.  Spalding  (2  Mason,  478), 

392. 
U.  S.  «.. White  (2  Hill,  154),  20. 
U.  S.  Bk.  V.  Binney  (5  Mason,  176), 

96,  104. 
Updegraft  v.  Edwards    (45   Iowa, 

515),  305. 
Upham  V.   Prince    (12  Mass.    13), 

260,  419. 
Upton  V.  Archer  (41  Cal.  85),  35. 
Usher  v.  Dauncey  (4  Camp.  97),  35, 

109. 
Usher  v.  Dewolf  (13   Mass.  290), 

241. 
Uther  V.  Rich  (10  Ad.  &  El.  784), 

289. 

V. 

Vacarro  v.  Toof  (9  Heisk.  194),  94. 
Valentine  v.  Foster  (1  Mete.  520), 

162. 
Valentine  v.   Holloman  (63  N.  C. 

475), 148, 263. 
Valentine  v.  Packer  (5  Penn.  338), 

82. 
Valentine  v.  Piper  (22    Pick.  85), 

77. 
Valette  v.  Mason  (1  Smith  (Ind.) 

89),  304. 
Valk  V.  Gaillard  (4  Strob.  99),  336. 
Valk  V.  Simmons  (4   Mason,  113), 

355,  444. 


Vallett  V.  Parker  (6  Wend.  615),  98, 

178,  198,  280,  286,  303. 
Van  Allen  v.   American  Nat.   Bk. 

(52  N.  Y:.  4),  452. 
Vanbibben  v.  Bk.  of  Louisiana  (14 

La.  Ann.  481),  452. 
.  Van  Brunt  v.  Singley  (85  111.  281), 

285. 
Van  Brunt  v.  Vaughn    (47  Iowa, 

145),  34,  339. 
Vance  v.  Collins  (6  Cal.  535),  338. 
Vance    v.   McLaughlin    (8     Gratt. 

289),  64. 
Vance  v.  Wells  (6  Ala.  737),  59. 
Vanderpool  v.  Brake  (28  Ind.  130), 

288. 
Vandewail  v.  Pyrrell    (1  Moody  & 

M.  87),  378. 
Vandeusen  v.  Sweet  (51  N.  Y.  378), 

52. 
Van  Doren  v.  Tjader  (1  Nev.  380), 

270,  310. 
Van  Etta  v.  Evauson  (28  Wis.  33), 

35. 
Van  Duzer  v.  Howe  (21  N.  Y.  531), 

230,  283,  397. 
Van  Epps  v.  Dillaye  (5  Barb.  244), 

381. 
Van  Keuren  v.   Parmelee    (2  N.  Y. 

525),  107,  (2  Comst.  523),  110. 
Van  Patton  v.  Beals  (46  Iowa,  63), 

53,  168. 
Van  Patton  v.  Marks  (46  Iowa,  63), 

54. 
Van  Reimsdyck  v.  Kane  (1  Gall.  C. 

C.  633),  222. 
Van  Riper  v.    Baldwin    (19    Hun, 

344),  247. 
Van  Schaack  v.   Stafford  (12  Pick. 

565),  292. 
Van  Schaick  v.  Edwards  (2  Johns. 

Cas.  35.5),  506,  511. 
Van   Steenburgh   v.    Hoffman    (15 

Barb.)  28),  59. 

963 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

McCuUoch    (2    Hilt.   I  Vinton  ».  King  (4  Allen,  502),  297. 
Vinton  v.  Peck  (15  Mich.  287),  34c. 


Wilding    (45  Mo.  89), 


Van  Trot   » 

272),  210. 
Van    Vechten  v.   Pruyn    (3  Kern. 

549),  340,  341,  342. 
Van  Wart  v.    WooUey  (3  B.  &  C. 

439),  215,  307,  421. 
Van  Wickle  v.   Downing   (19  La. 

Ann.  83),  310. 
Vanzant  v.  Arnold    (31    Ga.   210), 

500. 
Varuer  v.  Nobleborough  (4  Green- 
leaf,  120),  140,  379. 
Varuuin  a.  Meserve  (8  Allen,  158), 

80. 
Varnnm  v.    Milford    (4    McLean, 

93),  299. 
Vastine  v, 

480 
Vater  v.  Lewis   (30   Ind.  293),  17, 

(30  Ind.  291),  118,  126. 
Vathir  v.  Zane    (6  Gratt.  246),  303. 
Vattei-lien    v.    Howell    (4    Sneed, 

441),  105. 
Vaughn  v.   Ferrall  (57   Ind.   182), 

288. 
Vaughn  v.   Fuller    (2   Stra.    1246), 

365. 
Veal  V.  Veal  (27  Beav.  303),  252. 
Veazie  v.   Carr  (3  Allen,  14),   415, 

424. 
Veazie  Bk.  v.   Paulk  (40  Me.    109), 

292. 
Veazie  Bk.  v.  Winn  (40  Me.iiO),  443. 
Veeder  v.   Town  of  Lima   (19  Wis. 

291),  480,  482. 
Vere  v.  Lewis  (3  T.  R.  298).  19. 
Vernon  17.  Manhattan  Co.  (22  Wend. 

183),  100. 
Verplank  v.  Sterry  (12  Johns.  536), 

173. 
Vickory  v.  Pratt  (7  Kan.  238),   172. 
Vidal  V.  Thompson  (11  Mart.  (La.) 

23),  510. 
Vilas  V.  Jones  (10   Paige,  76),  424. 

964 


Violelt  V.   Patton  (5   Cranch,  142), 

158,  282,  418,  508. 
Violett  V.  Powell  (10  B.  Mon.  347), 

87. 
Va.  V.  Ches.  &  Ohio   Canal  Co.  (32 

Md.  501),  473,  470,  477. 
Va    &    Tenn.    R,  R.    Co.    v.    Clay 

(Daniel's  Neg.  Inst.  1489),  471. 
Visert;.  Rice  (33  Texas,  130),  35. 
Vogle  V.  Ripper  (34  111.  100),  392. 
Voltz  u.  Harris  (40  111.  159),  421. 
Vore  V.  Hurst  (13  Ind.  551),  270. 
Vose  V.  Dolan  (105  Mass.  159),  35. 
Voss  V.   Robinson  (18  Gratt.  338), 

482,  493. 


w. 


parte     (5    Ves. 


(35 


Wackerbath,    Ex 

574),  228,  229. 
Waddill  V.  Alabama  R.  R.  Co. 

Ala.  323),  118. 
Wade  V.    Killough    (3  Stew.  &  P. 

31),  202,  204. 
Wade   V.  New  Orleans  Canal,  etc., 

Co.  (8  La.  142),  407. 
Wade  V.  Staunton  (5  How.  (Miss.) 

631),  425. 
Wade  V.  Wade  (12  111.  89),  306. 
Wadley  v.   Develing    (1   Broadw. 

590),  203. 
Wadliugton   v.    Covert    (51   Miss. 

631), 20. 
Wadsworth  v.  Allen  (8  Gratt.  174), 

420,  421. 
Wadsworth  v.  Sharpsteen  (4  Seld. 

388),  52. 
Wagman  v.  Hoag    (14  Barb.  233), 

424. 
Wagner  v.  Kenner    (2    Rob.  (La.) 

120),  316. 
Wagner  v.  Simmons  (61  Ala.  143), 

90,  168. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Wailing  v.  Toll  C9  Johns.  141),  4G. 
Wain  V.  Walters  (5  East,  10),  418. 
Wainwright    v.    Webster    (11  Vt. 

576),  244,  4G6. 
Wait  V.   Pomeroy    (20  Mich.  425), 

41,  394,  397. 
Waithmau  v.  Elzel  (1  C.  &  K.  35), 

23. 
Wakefield  v.   Greenhoocl  (29   Cal. 

600),  222,  226. 
Wakeman  v.  Gocly  (10  Bosw.  208), 

304. 
Walbridge  v.  Harron  (18  Vt.  448), 

162. 
Walden  v.   Sherbo.urn   (15  Johns. 

409),  107. 
Waklo  Bk.    v.  Lambert    (16    Me. 

416),  100. 
Waldron  v.   Young  (9  Heisk.  777), 

35,  283. 
Wales  V.  Webb  (5  Conn.  154),  196, 

199. 
Walker  v.  Bk.   of  Augusta  (3  Kel. 

486),  343. 
Walker    v.  Bk.   of    Mo.  (13  Barb. 

636),  227,  343,  394. 
Walker  v.   Bk.  of  N.  Y.  (9  N.   Y. 

682),  123,124,  125,394. 
Walker    v.    Christian     (21    Gratt. 

297),  136. 
Walker  v.    Dement  (42   111.    272), 

305. 
Walker   v.  Ebert   (29    Wis.    196), 

285. 
Walker  v.   Forbes   (25   Ala.   139), 

420. 
Walker  v.   Hamilton  (ID.  F.  &J. 

502),  408. 
Walker  v.  Jeffries  (45  Miss.  160), 

184. 
Walker  v.  Johnson  (3  Cranch  C.  C. 

203),  198. 
Walker  v.   Kee  (14  S.  C.  142),  100, 

249,  289. 


Walker  v.  Ude  (1  Rich.  249),  222. 
Walker  v.  McDonald  (2Exch.  527), 

266. 
Walker  v.  Patterson  (36  Me.  273), 

146. 
Walker  v.  Roberts  (Car.  &  Marsh. 

590),  24. 
Walker  v.  Rogers  (39  111.  279),  365. 
Walker  v.  Sherman  (11  Met.  170), 

170. 
Walker    v.    Stetson  (19    Ohio   St. 

400),  211,342,  348. 
Walkers.  Tunstall  (3 How.  (Miss.) 

259),  327,342. 
Walker   v.  Turner  (2  Gratt.  536), 

327,  318. 
Walker  v.  Waite  (50  Vt.  668),  123. 
Walker  v.   Walker  (29  N.  Y.  375), 

173,  362. 
Walker  v.   Warfleld    (6  Met.  466), 

33. 
Walker  v.  Woollen    (54  Ind.  164), 

25,  28,  29c. 
Walker  v.  Wills  (5  Ark.  166),  310. 
Wall    V.   Bry    (1   La.    Ann.    312), 

362. 
Wall  V.  County  Monroe  (103  U.  S. 

77),   138. 
Wallace    v.  Agry  (4   Mason,  336), 

211,215,216,  346. 
Wallace  v.  Branch  Bk.  (1  Ala.  565), 

82,  292. 
Wallace  v.  Costan  (9  Watts,  137), 

62. 
Wallace    v.    Hardacre   (1    Campb. 

45),  183. 
Wallace  v.   Harmstad    (44  Pa.  St. 

492),  392. 
Wallace  v.  Jewell  (21  Ohio"  St.  163), 

394. 
Wallace  v.  Jose  (29  Cal.  188),  4-82. 
Wallace  v.  Lewis  (4  Ilarr.  75),  47. 
Wallace  v.  Loomis  (97  U.  S.  147), 

475. 

965 


TAIII.K    OF    CASKS    CITED. 


References  are  to  Sections. 


Wallace  v.  Mayor  of  Sau  Jose  (29 

Cal.  188),  480. 
Wallace  v.  McCouuell  (13  Pet.  13G) 

30,  227,  310,  415. 
Wallace  u.  Wallace   (8  Bradw.  G9) 

310. 
Waller   v.  Tate  (4   B.   Mou.  529) 

249. 
Wallcy   V.    Moutgomery   (3    East 

58.5),  492. 
Wallis  V.  Littell  (14  C.  B.  3G9),  273 
Waliiisley  v.  ChUd  (1  Ves.  Sr.  341) 

243. 
Walnut  V.  Wade   (103  U.  S.  695) 

473,  476,  478,  482. 
Walpole  V.  Pulteney  (1  Douglass 

248),  232. 
Walrad  v.  Petrie    (4   Wend.  576) 

18,  152. 
Walsh  V.   Bailey  (10  Johns.   180) 

4,  500. 
Walsh  V.   Batchley    (6  Wis.  422) 

216,217. 
Walsh  V.  Dart  (23  Wis.  334),  216 

315. 
Walsh  V.  Lennou  (98   111.  27),  379 
Walsh  V.  Whitcorab  (2  Esp.  565) 

80. 
Walters  v.   Brown    (15  Md.    292) 

339. 
Walters  w.  G.   H.   &   Co.  (1  Tex 

App.  753),  222. 
Walters  v.    Short    (5  Gilm.   252) 

393. 
Walton  V.    Bemiss    (16  La.    140) 

379. 
Walton  V.  Hastings  (4  Camp.  223) 

294. 
Walton  V.   Henderson  (Smith  (N 

H.)  168),  310. 
Walton    V.   Mascall    (13    Mees.   & 

Wels.453),  166,  310. 
Walton  V.  Williams  (44  Ala.  347), 

20,  228. 

966 


Walwyn  v.    St.  Quintin  (1  B.  &  P. 

652),  376. 
Walz   V.  Alback  (37  Md.  404),  270, 

272. 
Wambole  v.  Foote  (2  Dak.  1),  47. 
Wamsley  v.   Lindenberger  (2  Eau. 

478),  48,  51. 
Wanger  v.   Tupper  (8  How.  234), 

321. 
Wapples  V.  Hastings  (3  Harr.  403), 

47. 
Wardu.  Allen  (2  Met.  .53),  222,  223, 

230. 
Wardu.  Bk.  of  Ky.  (7  Mou.  93),  77. 
Ward  V.  Bourne  (4  M.  &  W.  548), 

195,  379. 
Ward  V.  Churn  (18  Gratt.  801),  34. 
Ward  V.  Evans  (12  Mod.  521),  456, 

466. 
Ward  V.  Johnson  (95  HI.  215,  238), 

115. 
Ward  V.  Lewis  (4  Pick.  520),  34(Z. 
Ward  V.  Northern  Bk.  (14  B.  Mon. 

351),  318. 
Ward  V.  Perrin  (54  Barb.  89),  342. 
Ward   V.    Smith  (7  Wall.   447),  66, 

80,  310. 
Ward  V.  The  Little  Red  (8  Mo.  358), 

47. 
Ward  V.   Turner  (2  Ves.  Sr.    431), 

252. 
Warden  v.  Howell  (9  Wend.  173), 

169,  301. 
Warden  v.  Hughes  (3  Wend.  416), 

22. 
Wardner  v.  Arell  (2  Wash  (Va.) 

298),  3. 
Wardner  v.  Tucker  (7  Mass.  449), 

355. 
Wardrop  v.  Dunlop  (8  N.  Y.  S.  C. 

(I  Hun)  325),  83,  247,  312. 
Ware   v.  Adams  (24  Me.  177),  157. 
Ware  v.  Morgan  (67  Ala.  461),  84. 
Ware  v.  Street  (2  Head,  609),  244. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Waring  v.  Smyth  (2  Barb.  Ch.  119), 

392. 
Waruer  v.  Martin  (11  How.  (U.  S.) 

309),  89. 
Warner  v.  Spencer  (7  J.  J.  Marsh. 

340),  394. 
Warner  v.   Whitney  (24  Me.  561) 

162. 
Warren  v.  Brown   (64  N.  C.  381) 

29. 
Warren  v.  Caapnian  (105  Mass.  87) 

179. 
Warren  v.  Coombs  (20  Me.  139) ,  3 

411. 
Warren  v.  Durfee  (126  Mass.  338) 

160,  252. 
Warren  v.   Oilman   (17  Me.   360) 

339,  347,  373. 
Warren  v.  Gordon  (10  Wis.  499) 

200. 
Warren   v    Haight  (65  N.  Y.  171) 

295. 
Warren  v.  Layton  (3  Harring.  404) 

392,  393. 
Warren  v.  Lynch    (5  Johns.  239) 

32,  506. 
Warren  v.  Scott  (32  Iowa,  22),  21 

243. 
Warrington  v.   Early   (2  El.  &  BI 

763),  41,  394,  397. 
Warrington    v.    Furbor    (8    East 

245),  310. 
Warwick  v.  Bruce  (2  M.  &  S.  205) 

46,  47,  49. 
Warwick  v.   Nairn  (10  Exch.  762) 

203. 
Warwick  v.  Noakes  (Peake's  N.  P. 

68),  86. 
Washburn  v.  Picot   (3  Dev.  390), 

201. 
Washington  Bank  v.  Farmer's  Bank 

(4  Johns.  Ch.  62),  161. 
Washington  Co.  Mut.   Ins.  Co.  v. 

Miller  (26  Vt.  77),  24. 


Waterman  v.  Vase    (43  Me.   504), 

394. 
Waters  v.  Bk.  of  Georgia  (Charlt. 

193),  467. 
Waters  v.  Brown  (15  Md.  285),  359. 
Waters   v.   Tazewell    (9  Md.  291), 

62. 
Watervleit  Bk.  v.  White  (1  Denio, 

613),  127,  243. 
Watkins  v.  Crouch  (5  Leigh,  522), 

30,  310,  355,  362. 
Watkins  v.  Halstead  (2  Sandf .  311), 

59. 
Watkins  v.  Hill  (8  Pick.  822),  379. 
Watkins  v.  Maule  (2  Jack.  &  W. 

237),  65,  148,  248,  262. 
Watson  V.  Evans  (I  Hurl.  &  Colt. 

662),  262. 
Watson  V.    Flanagan    (14    Texas, 

354),  154,  269,  295. 
Watson  V.   Hensel  (7  Watts,  344)^ 

46. 
Watson  V.   Hoag   (40  Iowa,  143), 

288. 
Watson  V.  Hurt  (6  Gratt.  633),  270. 
Watson  V.  King  (4  Camp.  272),  80. 
Watson  V.   Loring  (3  Mass.  557), 

321 
Watson  V.  Tarpley  (18  How.  517), 

210. 
Watson  V.  Templeton  (11  La.  Ann. 

137),  314. 
Watson's    Exrs.     v.   McLaren   (19> 

Wend.  566),  600. 
Watt  V.  Hock  (25  Pa.  St.  411),  377. 
Watt  V.  Riddle  (8  Watts,  545) ,  408. 
Wattrous  v.  Hallbrook  (39  Texas, 

572),  15. 
Way  V.  Batchelder  (129  Mass.  361), 

41. 
Way  V.    Butterworth     (108  Mass. 

508),  270,  272,  314. 
Way  V.  Lamb  (15  Iowa,  79),  295. 
Way  V.  Smith  (111  Mass.  523),  25. 
967 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Way  V.  Sperry  (G  Cush.  238),  1G2. 
Waydell  v.  Luer  (5  Hill,  U8),  379. 
Waymau  v.  Bend  (1  Campb.  175), 

243. 
Wayraell  v.  Reed  (5  T.  R.  599),  198. 
Weakly   v.    Bell  (9  Watts,    273), 

359,  379. 
Weare  V.  Gove    (U  N.  H.  196),  84. 
Weatherwax    v.    Paine    (2     Mich. 

555),  270. 
Weavers.  Barden  (49  N.  Y.  286), 

299. 
Weavers.  Border  (49  N.  Y.  293), 

165. 
Weaver  v.   Camall  (35  Ark.  198), 

85,  89. 
Weaver,  In  re  (21  Ch.  D.  615),  54, 
Webb  V.  Fairmauer   (3  M.   &  W. 

473),  315. 
Webb  V.   Hazletou    (4  Neb.   308), 

305. 
Webb  V.  Hears  (9  Wright,  222),  218. 
Webber  v.   Williams    College    (23 

Pick.  302),  77. 
Webster  v.   Calden  (56   Me.   204), 

269. 
Webster  i;.  Cobb  (17  111.  459),  270, 

419. 
Webster  v.  Lee  (5  Mass.  334),  269. 
Webster  V.   Hunger  (8  Gray,  584), 

198. 
Webster  v.  Van  Streenburgh  (46 
'     Barb.  312),  169. 
Webster  v.  Woodford  (3  Day,  90), 

52. 
Weed  V.  Bond  (21  Ga.  195),  178. 
Weggersloffe    v.    Kerne    (1    Stra. 

222),  310. 
Weinstock  v.  Bellwood  (12  Bush, 

189),  5a. 
Weisser  v.  Dennison  (10  N.  Y.  68), 

80,  400. 
Weismer  v.   Village   of  Douglass 

(11  N.  Y.  S.  C.  211),  481. 
968 


Weith  V.  City  of   Wilmington   (68 

N.  C.  341),  461,473. 
Welch  V.  Allington  (23  Cal.  322), 

379. 
Welch  V.  B.  C.  Taylor  Manf.  Co. 

(83  111.  581),  355. 
Welch  V.  First   Div.  St.  P.  &  P.  R. 

R.  (25  Minn.  320),  478. 
Welch  V.  Goodwin  (123  Mass.  71), 

39,  400. 
Welch  V.  Lindo    (1  Cranch,  159), 

260,  312. 
Welch  V.  Sage  (47  N.  Y.  147),  289. 
Weld  V.  Gorham    (10  Mass.   366), 

318. 
Wellington  v.  Jackson  (121  Mass. 

157),  398. 
Wells  V.  Brigham  (16  Cush.  6),  21, 

222,  227. 
Wells    V.  Evans  (20  Wend.   251), 

100. 
Wells  V.  Hopkins  (5  M.  &  W.  7), 

201. 
Wells  V.   Jackson  (6  Blackf.  40), 

271,  272. 
Wells  V.  Masterman  (2  Esp.  731), 

105,  219. 
Wells  V.  Supervisors   (102    U.   S. 

625),  480,  482. 
Wells  V.  Tucker  (3  Binn.  366),  255. 
Wells    V.    Whitehead    (15    Wend. 

527),  3,  4,  346. 
Welsh  V.  Barrett  (15   Mass.  380), 

348. 
Welsh  V.   German    American  Bk. 

(73N.  Y.  424),  400. 
Welton  V.  Adams  (4  Cal.  38),  467, 

486. 
Wemple  v.  Dangerfield  (2  Smed.  & 

M.  445),  337. 
Wennell  v.  Adney  (3 Bos.  &P.  249), 

162. 
Werner's  Appeal  (10  Norris,  222), 

46. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


West  Boston  Sav.  Inst.  v.  Thomp- 
son (124  Mass.  506),  299,  376. 
Westu.  Brown  (6   Ohio   St.  542), 
314,  337. 

West  V.  Cavins  (74  Ind.  265),  159. 

West  V.  Forman  (21  Ala.  400),  26. 

West  V.  Penny  (16  Ala.  186),  47, 
48,  50. 

Westr.  Russell  (48  Mich.  74),  52. 

West  Branch  Bk.  v.  Fulmer  (3  Pa. 
St.  399),  356. 

West  St.  Louis,  etc.,  Bk.  v.  Shaw- 
nee, etc.,  Bk.  (95  U.  S.  557),  116, 
120. 

Western  Boatman's  Benev.  Assn. 
V.  Wolfe  (45  Mo.  104) ,  270, 272, 310. 

Western  Cottage  Organ  Co.  v. 
Reddish  (51  Iowa,  55),  115. 

Westfall  V.  Braley  (10  Ohio  St. 
188),  244,  466. 

Westminster  Bk.  v.  Wheaton  (4  R. 
I.  30),  434. 

Westmoreland  v.  Foster  (60  Ala. 
448),  145,  300. 

Weston  V.  Chamberlain  (7  Cush. 
404),  261. 

Weston  V.  Hight  (17  Me.  287),  252. 

Wetherall  v.  Claggett  (28  Md.  565), 
327. 

Wetherell  v.  Joy  (40  Me.  325),  377. 

Wethey  v.  Andrews  (3  Hill,  582), 
296. 

Wetumpka,  etc.,R.  R.  Co.  v.  Bing- 
ham (5  Ala.  657),  114,  124,  128. 

Wexel  V.  Cameron  (31  Texas,  614), 
10. 

Whaley  v.  Houston  (12  La.  Ann. 
585),  327,  313,  445. 

Wharton  v.  Morris  (1  Dallas.  124), 
29. 

Wharton  v.  Walker  (4  B.  &  C.  163), 
209. 

Whatley  v.  Tricker  (1  Camp.  35), 
232. 


Wheat  V.  Arnold  (36  Ga.  480),  393. 
Wheat  V.   Kendall    (6  N.  H.  504), 

422. 
Wheatley  v.  Strobe  (12  Cal.  97),  56. 
Wheaton  v.  Wilmarth  (13  Met.  422), 

170,  346. 
Wheeler  v.  Field  (6  Met.  290),  314, 

348,358,359 
Wheeler  v.   Guild  (20  Pick.  545), 

373. 
Wheeler  v.  Knaggs  (18  Ohio,  169), 

80. 
Wheeler  v.  Newbold  (16  New  York, 

392),  304. 
Wheeler  v.  Nevins  (34  Me.  54),  75. 
Wheeler  v.  Slocum   (16  Pick.  62). 

166,  175. 
Wheeler  v.  Stone  (4  Gill,  47),  56. 
Wheeler  v.  Webster  (1 E.  D.  Smith, 

3),  15,  (1  E.D.  Smith,  1),  219,  223. 
Wheeler  v.  Wheeler  (9  Cow.  34), 

148. 
Wheelock  v.  Barney  (27  Ind.  462), 

200. 
Wheelock    v.    Freeman    (13  Pick. 

165),  392. 
Whelpdale's  Case  (5  Rep.  119),  63, 

287. 
Whilden   v.    Merchants,  etc.,  Bk. 

(64  Ala.  1),  222,  225. 
Whilden  v.  M.  &  P.  Nat.  Bk.  (64 

Ala.  30),  226. 
Whiuston  v.  Stodder  (8  Mart.  (La.) 

95),  506. 
Whistler  v.  Foster  (14  C.  B.  (n.  s.) 

248),  247,  248,  434. 
Whitaker  v.  Brown  (16  Wend.  505), 

96,  101.    . 
Whitaker  v.  Edmunds  (1  Mood.  & 

R.  366),  154. 
Whitaker  v.  Hartford,  etc.,  R.  R. 

Co.   (8  R.  I.  47),  476. 
Whitaker  v.  Morrison  (1  Fla.  25), 
365. 

969 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Whitakcr  v.  Pope  (48  Ga.  13),  377. 
Whitakcr    v.    Whitaker   (G  Johns. 

112),  <i+,  (52  N.  Y.  3r,8),  IGO. 
Whitcomb  v.  Whiting  ( —  Douglass, 

652),*110. 
White  V.  Canfiekl  (7  Johns.  117), 

50G. 
White  V.  Continental  Nat.  Bk.  (64 

N.  Y.  316),230,  259,  399. 
White  17.  Cox  (2  Ilayw.  79),  57. 
White  V.  Haas  (32  Ala.  430),  393, 

394. 
White  V.  Ileylmau  (34  Pa.  St.  142), 

242. 
White  V.  Hopkins    (3  Watts  &  S. 

101),  422. 
Whiter.  Howard  (1  Sandf.  81), 380. 
White  V.  Ledwig  (4  Doug.  427),  31. 
White  V.   Madison  (26  New  York, 

11G),84. 
White  V.  McNett  (33  N.  Y.  371),  62. 
White  V.  Nat.  Bk.  (102  U.  S.  658), 

268. 
White  V.  Palmer  (4  Mass.  147),  374. 
White  V.  Richmond  (16  Ohio,  5) ,  29. 
White  V.  Skinner  (13  Johns.  307), 

84. 
White  V.  Smith  (77  HI.  351),  24. 
White  V.  Springfield  Bk.  (3  Sand. 

(S.  C.)  222),  IGG,  169,  172a,  304. 
White  V.  Stoddard  (11  Gray,  528), 

311,  335,  3G0. 
White  V.  Tudor   (24  Texas,  641), 

107,  108. 
White  V.  Vt.,  etc.,  R.  R.  Co.    (21 

Howe,  575),  35,  117,  472,  473,  474. 
White  V.  Wardwell  (1  Root  (Me.) 

309),  162. 
White  V.  Weaver  (41  HI.  409),  269, 

270. 
Whiteford  v.  Burckmeyer  (1  Gill, 

127),  338. 
Whitehead  v.  Lord  (7  Exch.  691), 

80. 

970 


Whitehead  v.  Walker  (9  M.  &  W. 

50G),  295. 
Whitehouse  v.  Hansen  (42  N.  H.  9), 

273. 
Whiteman  v.  Childress  (6  Humph. 

303),  29,  2576. 
White's  Bank  v.  Toledo,  etc.,  Ins. 

Co.  (12  Ohio  St.  601),  115. 
Whiteside  v.  Northern  Bk.  (10  Bush, 

501),  394. 
Whiteside  v.  U.  S.  (93  U.  S.  257), 

136. 
Whitesides  t>.  Cannon  (23  Mo.  457), 

62. 
Whitford  v.  Laidler  (94  N.  Y.  145), 

117. 
Whitfield  V.  Savage  (2  Bos.  &  Pul. 

277),  355. 
Whiting  V.  Dewey  (15  Pick.  428). 

87. 
Whitlock  V.  Underwood  (2  B.  &  C. 

157),  24,  315. 
Whitman  v.  Farmers  Bk.   (8  Port. 

(Ala.)  258),  335. 
Whitman  i'.  Leonard  (3  Pick.  177), 

106,  107. 
Whitmer  v.  Frye  (10  Mo.  349),  392, 

394. 
Whitmore  v.  Ellison  (72  111.  301), 

424. 
Whitmore  v.  Nickerson  (125  Mass. 

49G),  13. 
Whitney  v.  Abbott  (5  N.  H.  378), 

364. 
Whitney  v.  Allaire  (4  Denio,  554), 

203. 
Whitney  v.   Bunnell    (8  La.  Ann. 

429),  230. 
Whitney  v.  Dutch  (14  Mass.  457), 

47,  50. 
Whitney  v.  Esson  (99  Mass.  110), 

4.5G. 
Whitney  v.  Goring  (20  N.  H.  354), 

425. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Whitney  v.  Nat.  Bk.  (45  New  York, 

305),  244. 
Whitney  v.  Snyder   (2  Lans.  477), 

285. 
Whitney  v.  Wyman  (101  U.  S.  392), 

84. 
Whitridge  v.  Rider   (22  Md.  558), 

359. 
Whittaker  v.  Kuhn  (52  Iowa,  315), 

295. 
Whittier  v.  Eager   (1  Allen,  499), 

172a. 
Whittier  v.  Graffam  (3  Greenleaf, 

32),  358,  359. 
Whitwell  V.  Crehore   (8  La.  540), 

295.    . 
Whitwell   V.    Johnson     (17    Mass. 

449),  318. 
Whitworth  v.  Adams  (5  Rand.  342), 

158,  292. 
Whywall    v.    Champion    (2    Stra. 

1083),  46. 
Wickersham  v.  Jarvis  (2  Mo.  App. 

280),  373. 
Wickham  v.  Wickham    (2   Kay  & 

Johns.  475),  86. 
Wicks  V.  Mitchell  (9  Kan.  80),  62. 
Widgery  v.  Monroe  (6  Mass.  449), 

318,  358. 
Widoe  V.  Webb  (20  Ohio  St.  431), 

179. 
WifEen  v.  Roberts  (1  Esp.  261),  293. 
Wiggin   V.   Bush  (12  Johns.  306), 

193,  289. 
Wightman  v.  Townroe  (1  M.  &  S. 

412),  146. 
Wiggin  V.  Damrell    (5  N.  H.  69), 

242. 
Wiggins  V.  Keiser   (6  Ind.  252), 

162. 
Wigglesworth  v.  Steers  (1  Heming. 

&  M.  154),  57. 
Wilbur  V.  Jernegau  (11  R.  I.  113), 
379. 


Wilbur  V.  Lynde  (49  Cal.  290),  82. 
Wilbur  t'.  Seldeu  (G  Cow.  162),  348. 
Wilbur  V.  Turner  (5  Pick.  526),  243. 
Wilburn  v.  Greer  (6  Ark.  255),  29. 
Wilburn  v.  Larkin   (3  Blackf.  55), 

85. 
Wilcox  V.  Aultman    (64   Ga.  544), 

373. 
Wilcox  V.   Draper  (12  Neb.  138), 

420. 
Wilcox  V.  Howlin    (23  Pick.  167), 

175. 
Wilcox  V.  Jackson  (51  Iowa,  208), 

57. 
Wilcox «.  Roath  (12  Conn.  550),  50, 

336. 
Wilcoxen  v.  Reynolds  (46  Ala.  529), 

296. 
Wild  V.  Bk.  of  Passamaquoddy  (3 

Mason,  505),  78,  120,  262. 
Wilda  V.    Armsly    (6    Cush.    314), 

393. 
Wilde  V.  Sheridan  (2  L.  J.  R.  Q.  B. 

260),  507. 
Wilder  v.  Cowles  (100  Mass.  487), 

245. 
Wilder  v.  De  Wolf  (24  111.  190),  20 

257,  257a. 
Wilder  v.  Weekley  (34   Ind.  181), 

53. 
Wilders  v.   Stevens    (15  M.  &  W. 

208),  170. 
Wildes    V.  Nahant    Bk.    (20  Pick. 

352),  464. 
Wildes  V.  Savage  (1  Story,  22),  220, 

226,  420,  421. 
Wiley  V.  Knight  (27  Ala.  336),  299. 
Wiley  V.  Moor  (17  Serg.  &  R.  438), 

35. 
Wilkenson  v.  JefEers  (30  Ga.  153), 

295. 
Wilkes  V.  Jacks  (Peake,  202),  355. 
Wilkie  V.  Roosevelt  (3  Johns.  Cas. 
66),  178,  196. 

971 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Wilkins  v.  Casey  (7  T.  R.  711),  220. 
Wilkius    V.    Com.   Bk,     (fi     How. 

(Miss.)  217),  33G. 
Wilkiusou  V.  Adams  (1  Ves.  &  B. 

466),  340. 
Wilkiuson  v.  Johnson   (5  Dowl.  & 

Ry.  408),  221,  230,  231,  232,  378. 
Wilkinson  v.  Lutwidge  (1  Strange, 

648),  230. 
Willard  v.  Stone  (7  Cow.  22),  47. 
Willets  r.   Phoenix   Bk.    (2   Dner, 

121),  43G. 
Willett  V.  Shepherd  (34  Mich.  106), 

393. 
Will-ey  V.  Greenfield  (30  Me.  452), 

142. 
"Williams    v.   Ayres    (3   App.   Cas. 

133),  20. 
Williams  v.  Bacon  (2  Gray,  387),  87. 
Williams  v.  Banks    (11   Md.  198), 

172a. 
Williams  v.  Bk.  of  U.  S.  (2  Pet.  96), 

338,  340,  342,  359. 
Williams  v.  Brashear  (19  La.  370), 

355. 
Williams  v.  Bossom  (11  Ohio,  66), 

158. 
Williams  v.  Brobst  (10  Watts,  111), 

363. 
Williams  v,   Brown   (34  Me.  594), 

48. 
Williams  v.  Cheney  (3  Gray,  215), 

280. 
Williams  v.  Crutcher    (6  Miss.  71), 

35. 
Williams   v.  Drexel    (14  Md.  566), 

230,  399. 
Williams  v.  Everett  (14  East,  582), 

6. 
Williams  v.  Floyd  (11  Pa.  St.  499), 

33. 
Williams  v.  Gait  (65  111.  172),  34. 
Williams    v.  Germaine    (7  B.  &  C. 

468),  228,  313. 

972 


Williams    v.  Gety   (7  Casey  (Pa.), 

4(!1),  81. 
Williams  v.    Harrison    (11    S.    C. 

412),  47,  48. 
Williams  v.  Haynes  (27  Iowa,  551), 

506. 
Williams  v.   Hoogewerft    (25  Md. 

128),  314. 
Williams  v.  Inabne  (1  Bailey,  343), 

57. 
Williams  v.   James  (15   Ad.  &  El. 

(X.  s.)  499),  376. 
Williams  v.  Jones    (13  East,  439), 

506. 
Williams  v.   Lewis  (69    Ga.   762), 

363. 
Wilfiams  v.  Mathews  (14  La.  Ann. 

11),  106,  310,  311,  336,  348. 
Williams  v.    Moore    (11  M.  &  W. 

266),  48. 
Williams  v.  Nicols    (10  Gray,   83), 

170. 
Williams   v.   Potter  (72  Ind.  354), 

268. 
Williams  v.  Perkins    (21  Ark.  18), 

157. 
Williams  v.  Price    (1    Sim.  &  St. 

581),  423. 
Williams  v.  Putnam  (14  N.  H.  540), 

321,  327. 
Williams  v.  Bobbins  (16  Gray,  77), 

85,  87. 
Williams  v.  Second  Nat.  Bank  (83 

Ind.  237),  123. 
Williams  v.    Smith  (2  Hill,    301), 

163,    1G9,  (48  Me.   135),  261,  293, 

304,  466,  467. 
Williams  v.  Storm  (2  Duer,  52) ,  292. 
Williams  v.  Tishomingo  Sav.  Inst. 

(57  Miss.  63.3),  259. 
Williams  v.  Urmston  (35  Ohio  St. 

296),  62. 
Williams    v.    Wade    (1  Mete.  82), 

508. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Williams  v.  Walker  (18  S.  C.  577), 

170. 
Williams  v.  Wallbridge  (3  Wend. 

416),  98. 
Williams  v.   Weutworth  (5  Beav. 

325),  54. 
Williams  V.  Williams  (67  Mo.  661), 

167,  184,  417. 
Williams  v.    Winos  (2   Green  (N. 

J.)  339),  220,  222. 
Williamson  v.  Beckham  (8  Leigh, 

20),  62. 
Williamson   v.  City  of  Keokuk  (44 

Iowa,  88),  482. 
Williamson  v.  Doby  (36  Ark.  689), 

295. 
Williamson  v.    Hanley    (6     Bing. 

299),  194. 
Williamson  v.  Johnson   (1  B.  &  C. 

146),  103,  265,  447. 
Williamson  v.  New  Albany  &  Salem 

K.  E.  Co.  (9  Am.  Ry.  Times,  37), 

477. 
Williamson  v.   Smith  (1  Cold.  1), 

29c. 
Williamsport     v.     Commonwealth 

(84  Pa.  487),  134. 
Willing  V.   Peters   (12  Serg.  &  R. 

177),  162. 
Willis  V.  Barrett  (2  Starkie,  29),  17. 
Willis  V.  Green   (5  Hill,  232),  212, 

313,  336. 
Willis  V.  Johnson  (38  Texas,  303), 

185. 
Willis  V.  Twombly  (13  Mass.  204), 

242. 
Willison  V.  Pattisou  (7  Taunt.  439), 

66,  256. 
Willoughby  v.  Moulton    (47  N.  H. 

245),  12. 
Willoughby  v.  Willoughby  (6  N.  H. 

245),  18. 
Wilmington    Bank  v.    Houston  (1 

Harr.  227)    264. 


Wilmington,   etc.,    R.    R.  v.  King 

(91  U.  S.  3),  29c. 
Wilson  V.   Black    (6   Blackf .  509), 

273. 
Wilson  V.   Briggs    (7  Watts  &    S. 

Ill),  57. 
Wilson  V.   City  of  Shreveport  (29 

La.  678),  480,  482. 
Wilson  V.  Clements   (3  Mass.  10), 

226. 
Wilson    V.    Codman's      Exrs.     (3 

Cranch.  192),  260.     • 
Wilson  V.  Edmonds    (4   Fost.  (N. 

H.)  617),  80. 
Wilson  V.  Forder  (20  Ohio  St."  89), 

107. 
Wilson  V.  Hayward  (2Fla.  27),  305. 
Wilson  V.  Holmes   (5  Mass.    543), 

268. 
Wilson  u.  Lazier  (11   Gratt.   478), 

154,  303,  506. 
Wilson  V.  Mechanic's  Sav.  Bk.  (45 

Pa.  St.  494),  295. 
Wilson  V.  Mitchell  (4  (Miss.)  How. 

272),  335. 
Wilson  V.  Mullen  (3  McCord,  236), 

257b. 
Wilson  V.  Powers  (130  Mass.  127), 

424. 
Wilson  V.  Senier  (14  Wis.  380),  362. 
Wilson  V.  Stubbs  (Hobart,  330),  17. 
Wilson  V.   Swabey   (1   Stark.  34), 

335. 
Wilson  V.  Troup  (2  Cow.  242),  305. 
Wilson  V.  Wilson    (37  Mo.  1),  189. 
Wilson    Sewing    Machine    Co.    v. 

Moreno  (U.  S.  C.  C.  Oregon,  29 

Am.  Rep.  406),  28. 
Winchell  v.  Cai-ey  (115  Mass.  560), 

34c. 
Windliam  v.  Doles    (59  Ga.   266), 

199. 
Windham  v.  Norton  (22  Conn.  213), 

315,  348,  354. 

973 


TABLE   OF    CASES    CITED. 


References  are  to  Sections, 

Windham  Co.  Bk.  v.  Kendall  (7  R.  ]  Wolf  v.  Van  Metre  (23  Iowa,  397), 

I.  77),  98. 
Windtleld  v.  Hudson  (28  New  Jer- 

.sey  L.  255),  117. 
Wing  V.  Terry  (5  Hill,  160),  14. 
Winn  V.   City  of    Macon    (21  Ga. 

275), 481. 
Wiuship  V.  Bk.   of  U.    S.    (5  Pet. 

529),   100. 
Winslow  u.  Wood  (70  N.   C.  405), 

205. 
Winstead  Bk.   v.   Webb  (39  N.  Y. 

325),  379. 
Wintermute  v.  Post  (4  Zab.  420), 

227,  232. 
Wiuter.smith  v.  Post  (4  Zab.  420), 

221. 
Wiuthrop  V.    Jarvis    (3   La.  Ann. 

434),   14G. 
Winthrop  V.  Pepoon  (1  Bay,  468), 

321. 
Wintle  V.  Crowther  (1  Tyrw.  215), 

94. 
Wiutons    V.    Westfeldt     (22    Ala. 

566),  302. 
Wisdon  V.  Becker  (52  111.  342),  146. 
Wtse  V.  Charlton  (4  A.  &  E.  788), 

26, 
Wise   V.  Rogers    (24   Gratt.    169), 

463. 
Wiseman    v,    Chapella    (23    How. 

363),  314. 
Wisuer  v.  Bardwell  (32  Mich.  278), 

179. 
Withersoou     v.    Musselman      (14 

Bush,  814),  28. 
Witte  V.  Derl)y  (2  Conn.  200),   123. 
Witte  V.   Williams  (8  S.   C.  290), 

289,  294. 
Wittenberger  v.  Spalding  (33  Mo. 

421),  324. 
Wolf  V.  Koppel  (5  Hill,  558),  86. 
Wolf  V.  .Jewett  (lO  La.  (o.  s.)  614), 

86,  (10  La.  383), 213, 368. 
974 


62. 
Wolleuleber  v.  Ketterlinus  (17  Pa. 

St.  389),  355. 
Wood  V.  Bodwell  (12   Mass.  289), 

379. 
Wood  V.   Bullens    (6  Allen,   518), 

376. 
Wood   V.  Corl  (4   Met.    203),    315, 

342,  511. 
Wood  V.  Dowry  (ILd.  Raym.  734), 

33. 
Wood  V.  Gibbs  (35  Miss.  559),  355, 

507. 
Wood  V.  Jefferson  Co.  Bk.  (9  Cow. 

194),  415,  424. 
Wood  V.  Mullen  (3  Rob.  (La.)  299), 

316. 
Wood  V.  Myttou    (10   Q.    B.   805), 

20. 
Wood  V.  Newkirk   (15  Ohio,  295), 

424. 
Wood  V.  Pugh  (7  Ohio  St.  II.  156), 

228. 
Wood  V.  Steele  (6  Wall.  80),  394. 
Wood  V.  Trask  (7  Wis.  566),  305. 
Wood  V.  Watson  (53  Me.  300),  345. 
Wood  V.  Wood  (1  Har.  429),  336. 
Woodbridge  v.  Spooner  (3  B.  &  Aid. 

235),  159,  160. 
Woodbury  v.   Moultou    (47  N    H. 

11),  85. 
Woodcock  V.  Houldsworth  (16  M. 

&  W.  126),  341. 
Woodford  u.  Dorwiu  (3  Vt.  82),  10, 

34,  34ft,  (8  Vt.  82),  109. 
Woodhull   V     Holmes    (10   Johns. 

231),  178,  303. 
Woodin  V.  Foster    (16  Barb.   146), 

318. 
Woodin   V.  Frayze  (38  N.  Y.  S.  C. 

190),  445. 
Woodman  v.  Boothy  (66  Me.  389), 

270. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 

Woodman  v.   Chapman    (1    Camp. 

189)   60. 
Woodman u.  Churchill  (::2  Me.  58;, 

295. 
Woodman  v.  Eastman    (10  N.  H. 

359),  362. 
Woodman    %.    Thurston   (8   Cush. 

157),  363. 
Woodruff  V.  Hayne  (1  0.  &  P.  600), 

163. 
Woodruff  V.  Heniman  (11  Vt.  592), 

179. 
Woodruff  V.  Hill   (116  Mass.  310), 

506. 
Woodruff  V.  Leonard  (8  N.  Y.  S.  C. 

(1  Hun)  632),  271. 
Woodruff    V.  McGhee   (30  —  158), 

288. 
Woodruff  V.     Merchants    Bk.    (25 

Wend.  673),  315,  421,  430,  431. 
Woodruff  V.  Munroe  (33  Md.  158), 

288,  398. 
Woodruff    V.   Trapnall    (10    How. 

203),  451,  463. 
Woods  ».  Armstrong  (54  Ala.  150), 

178. 
Woods   V.  Lawrence  Co.  (1  Black, 

360),  474,  475. 
Woods  V.  North  (84  Pa.  St.  410),  28. 
Woods  V.  Pindall    (Wright  (Ohio) 

507), 57. 
Woods  V.  Ridley  (11  Humph.)  194), 

20. 
Woods  V.  Schroeder  (4  'Har.  &  J. 

276),  439. 
Woods  V.  Sherman  (71  Pa.  St.  100), 

377. 
Woods  V.  Viozca  (26  La.  Ann.  716), 

292. 
Woods  V.  Wilder  (43  N.  Y.  164),  66. 
Woods  V.  Woods  (127  Mass.  141), 

270,  379. 
Woodson    V.    Moody    (4    Humph. 

303),  421. 


Woodthorpe   v.  Lawes  (2  M.  &  W. 

109),  325,  335,  345,  346. 
Woodward    v.    Drennon  (3   Brev. 

189),  310. 
Woodward  v.     Foster    (18   Gratt. 

205),  273. 
Woodward  v.   Severance  (7  Allen, 

340),  261. 
Woodwiv'-d  V.  B'k  of  America  (19 

Johns.  3b!),  41,394. 
Woodworth  v.   Baruett   (43  N.  Y. 

273),    i98. 
Woodworth  v.  Huutoon    (40    111 

131),  295. 
Wookey  v.  Pole  (4  B.  &  Aid.  1),  1, 

473. 
Woollen  r.  Ulrich  (64  Ind.  120),  2=^. 
Woollen  V.  Whitacre  (73  Ind.  201), 

285. 
Woollen  V.  Wise  (73  Ind,  201),  285. 
Woolley -y.   Clements  (11  Ala.  220), 

316. 
Woolley  V.  Constant  (4  Johns.  60), 

35. 
Woolley    V.   Sergeant   (3  Halsted, 

362),  23. 
Woolley  u.  Crawford  (2  Camp.  445), 

408. 
Wooster  v.  Jenkins  (3  Denio,  187), 

172a. 
Wooten  V.  Maulsby  (69  N.  C.  462), 

269. 
Worcester    Co.   Bk.      Dorchester, 

etc.,Bk(10    Cush.  488),  289,  303, 

464. 
Worcester  Co.   Bk  v.  Wells  (8  Met. 

107),  22'5,  507. 
Worcester   Ins.,  etc.,  v.  Davis  (13 

Gray,  531),  420. 
Worcester  Nat.     Bk  v.  Cheney  (87 

111.  602),  165,  166,  167. 
Worden  v.  Dodge   (4  Denio,  159), 

26. 
Worden  v.  Salter  (90  111.  160),  272. 
975 


TABLE    OF    CASES    CITED. 


Work  V.  Tatrnau  (2  Iloust.  (Del.) 

304),  434. 
Workman  v.  Wright  (33  Ohio  St. 

35),  288,398. 
Works  V.   Hershey  (35  Iowa,  340), 

25,  296. 
Wormer  v.  Lowry  (1  Humph.  4G8), 

105. 
Worsall    V.     Muun  (6  N.  Y.  229), 

Md. 
Worrall  17.  Gheen  (3  Wright,  388), 

397. 
Worsham  v.   Goar    (4  Port.  (Ala.) 

441),  424. 
Worteudyke  v.    Mechan     (9  Neb. 

221),  178,  303. 
Worthingtou  v.  Cowles  (112  Mass. 

30),  244,  245. 
Worth  V.  Case   (42  N.  Y.  302),  25, 

160,  200. 
Wren  v.   Hoffman    (41    Miss.  616), 

170. 
Wren  o.  Pearce    (4   Sm.  &  M.  91), 

418. 
Wright  V.  Andrews  (70  Me.  86) ,  355. 
Wright  V   Brosseau    (73   HI.  381), 

100. 
Wright  u.   Dyes  (48  Mo   526),  421. 
Wright  V.  Hart  (44  Pa.  St.  454),  29. 
Wright  V.  Irwin  (33  Mich.  32),  26, 

(35  Mich.  347),  173. 
Wriglitu.  Laiug  (3  B.  &   C.    165), 

377. 
Wright  V.  Maidstone  (1  R.  &  J.  701), 

300. 
Wright  V.  McFall  (8  La.  Ann.  120), 

4. 
Wright  V  Morse  (9  Gray,  337),  273. 
Wright  V.  Reed  (3  I.   R.  554),  404. 
Wright  V.  Showcross  (2  B.  &   Aid. 

501),  337. 
Wright  15.  Solomon  (19  Cal.  64),  82. 
Wright  V.   Steele  (2  N.  H.  51),  48, 
50. 

976 


Refereuces  are  to  Sections. 

Wright  V.  Wheeler  (1  Campb.  165), 

190. 
Wright  V.  Wright  (1  Cow.   598), 

160,  173,  242,  252,  366. 
Wrightsou  v.  Pullan  (1  Stark.  375), 

107. 
Wyant  v.  Pattorf  (37  Ind.  612),  28. 
Wyattt;.  Evans  (52  Ala.  285),  185. 
Wyck  V.  Brasher  (81   N.  Y.  260), 

57. 
Wyer  v.  Dorchester,  etc.,  Bk.  (11 

Cush.  51),  289,  464. 
Wyke  B.   Rogers  (1  De  G.  M.  &  G. 

408),  424. 
Wylie  V.  Brice  (70  N.  C.  425),  227. 
Wyly  V.  Collins  (9  Ga.  223),  62. 
Wyman  v.  Adams  (12   Cush.  210), 

357. 
Wyman  v.   Fiske    (3    Allen,   238), 

189. 
Wyman  v.  Yeomans  (84  111.   403), 

394. 
Wynn  v.   Alden   (4  Dev.  163),  345, 

346. 
Wynne  v.  Callander  (1  Russ.  293), 

180. 
Wynne  v.  Jackson  (2  Russ.  251), 

510. 
Wynne  v.  Raikes  (5  East,  513),  220, 

225,  226. 
Wynne  v.  Whesenant  (87  Ala.  46), 

179,  183. 


I 


Yale  V.  Dederer  (18  N.  Y.  269),  62. 
Yale  V.  Wood  (30  Texas,  17),  3. 
Yangerv.  Skinner  (1  McCart.  389), 

52. 
Yarnell  v.  Anderson  (14  Mo.  619), 

379. 
Yates  V.  Bell  (3  B.  &  Aid.  643),  5. 
Yates   V.  Dalton    (28  L.   J.   Esch. 

€9),  98. 


TABLE    OF    CASES    CITED. 


References  are  to  Sections. 


Yates  V.  Doualdsou  (5  M.  D.  389), 

232,  422. 
Yates  V.  Freckleton  (2  Douglass, 

623),  89. 
Yates  V.  Hall  (1  T.  R.  73),  66. 
Yates  V.  Shepardsou  (39  Wis.  173), 

455. 
Yeager  v.  Farwell    (13   Wall.  12), 

364. 
Yeates  u.  Groves  (1  Ves.  Jr.  281), 

5c. 
Yeatraan  v.  CuUeu  (5  Blackf.  241), 

506,  508. 
Yeatman  v.  Mattisou  (59  Ala.  382), 

155. 
Yeaton    v.    Bk.    of    Alexander    (5 

Cranch,  49),  158. 
Yeaton  v.  Berney  (62  111.  61),  227, 

310. 
Yerby  v.  Griggsby  (9  Leigh,  387), 

75. 
Yocum   V.  Smith  (63  111,  321),  283, 

397. 
York  Co.  Bank   v.   Stein    (24   Md. 

447),  81., 
York  V.  Pierson  (63  Me.  587),  166, 

170,  425. 
Youghiogheny    Iron,  etc.,    Co.    v. 

Smith  (16  Smith  (Pa.)  340),  87. 
Yorkshire  Banking  Co.  v.  Beatson 

42  L.  T.  R.  455;,  104. 
Young  w.  Adams  (6  Mass.  18-2),  29, 

244,  466. 
Young  V.  Bell  (1  Cranch  C.  C.  342), 

48. 
Young   V.   Bennett   (7  Bush,  477), 

326. 


Young  V.   Bryant  (6  Wheat.   146), 

321,  327. 
Young  V.  Cole    (3  Biug.  N.  C.  724), 

244. 
Young   V.  Glover  (3  Jurist  (x.  s.) 

637),  264. 
Young  V.  Grote  (64  Me.  12),  11,  19, 

185,  230,  282,  397. 
Young  V.  Harris  (14  B.  Mon.  556), 

506. 
Young    V.    Lehman    (63   Ala.  519), 

230,  397,  399,  400. 
Young  V.  Ward  (6  Heisk.  33),  287, 

288, 
Youngs  V.  Lee  (12  N.  Y.  551),  166, 

294,  304,  345,  346. 
Yowell  V.  Dodd  (3  Bush,  581),  124. 

z. 

Zachary  v.  Gregory  (32  Texas,  452), 

145. 
Zabriskie  v.  Cleveland,  etc.,  R.  R. 

Co.  (23  Hovi-.  381),  116. 
Zelle  V.  Gei-.  Sav.  Inst.  (4Mo.App. 

401),  452. 
Zimmerman   v.  Anderson    (67  Pa.' 

St.  421),  29c. 
Zimmerman  v.   Rote    (75    Pa.    St. 

188),  397. 
Zimplimanu.  Veeder  (7  Heisk.  153), 

153. 
Zolloman  v.  San  Prancisco  (20  Cal. 

102),  83. 
Zwinger  v.  Samuda  (6  Wheat.  146), 

221,  234. 

62  977 


J 


INDEX. 


References  are  to  Sections. 

ACCEPTANCE  (of  bills  of  exchange), 
form  of,  by  agent  of  corporation,  125, 
object  and  eflfect  of,  209. 
effect  of  failure  to  accept,  210. 
what  bills  must  be  presented  for,  211. 
presentment  by  whom  and  to  whom,  212,  324. 
presentment,  at  what  place,  213. 
time  of  day  for  presentment — business  hours,  214. 
presentment,  within  what  time,  215. 
what  is  a  reasonable  time  for  presentment,  216. 
form  and  manner  of  presentment  for,  217 
when  acceptance  may  be  dispensed  with,  21S. 
who  may  accept,  219. 

at  what  time  acceptances  may  be  made, 220. 
when  acceptance  may  be  revoked,  221. 
verbal  and  written,  222. 
what  words  amount  to  an,  223. 
implied, — detention  and  destruction  of  bills, 224. 
oa  separate  paper,  225. 
agreements  to  accept,  226 
conditional  and  qualified,  227 
for  honor  or  supra  protest,  228. 
protest  for  better  security,  229. 
admits  what,  230. 

admissions  of  acceptor  for  honor,  230. 
how  acceptor's  liability  may  be  waived,  232. 
by  whom  presentment  should  be  made  in  preparation  for  protest, 

324. 
bill  drawn  without  right  to  expect,  355. 
whether  acceptor  liable  for  re-exchange  or  damages,  408. 
by  what  law  liability  of  acceptor  is  governed,  507. 
what  law  governs  presentment,  protest  and  notice,  509. 
relation  of  drawee  before  acceptance,  after,  209. 
where  two  or  more  drawee's,  each  must  accept,  15. 
married  women  as  acceptor,  59. 
authority  of  partners  to  accept,  95. 
of  corporation  ^warrants  implies  what,  142. 

979 


INDEX. 

References  jirc  to  Sections. 

ACCEPTANCE— Continued. 

impossible  for  personal  representatives  to  bind  estate  by,  146. 

existing  debts  as  consideration  for,  165. 

forbearance  good  consideration  for,  170. 

necessary  to  a  complete  transfer  of  title,  256. 

negotiation  of  paper  by  acceptor,  whether  is  in  usual  course  of 
business,  294. 

never  necessary  to  make  presentment  for  payment  to  hold  ac- 
ceptor, 310. 

acceptor  has  whole  day  in  which  to  make  payment,  317. 

protest  for  non.    See  Protest. 

certitication  as  the  equivalent  of,  436. 

ACCEPTANCE  (of  guaranties), 
notice  of,  420. 

ACCEPTOR,    See  Acceptance. 

ACCIDENT, 

as  excuse  for  non-presentment,  protest  and  notice,  360. 

ACCOMMODATION  PAPEE, 

liability  of  partners  on,  98. 
in  the  hands  of  bona  fide  indorsees,  82,  99,  116. 
in  relation  to  questions  of  consideration,  158. 
constructive  notice  in  respect  to,  301. 

concealed  sureties  as  accommodation  parties — nature  of  their  lia- 
bility—admissibility  of  parol  evidence  to  prove  real  character,  422. 
cashier  cannot  bind  bank  as  party  to,  120. 

when  in  hands  of  original  parties  cannot  be  enforced  anywhere,  151. 
may  be  pledged,  158. 
diversion  with  respect  to,  301. 
received  by  holder  when  overdue,  295. 

ACKNOWLEDGMENT, 

of  consideration,  SI- 
ACTIONS, 

on  bonds  and  coupons,  478. 

ADDRESS, 

of  drawee,  15,  16. 

inability  to  discover  as  excuse  for  want  of  presentment,  protest  and 

notice,  358. 
of  party  entitled  to  notice  of  dishonor,  341,  342. 
of  drawee  in  check,  455. 

ADMINSTRATORS.    See  Personal  Reprhsentatives. 
980 


INDEX. 

References  are  to  Sections. 

ADMISSIONS, 

implied  from  acceptance,  230. 
or  acceptor  for  honor,  231. 

ADOPTED  NAMES, 
in  bills  and  notes,  19. 
as  used  by  agent,  85. 

ADOPTION, 

of  forged  signature,  effect  of,  398. 

ADVANCES, 

future,  as  a  consideration,  1G3. 

ADVICE, 

words  of,  27. 

AFTER  SIGHT, 

time  of  payment,  24. 

paper  payable,  must  be  presented  for  acceptance,  211. 

AGENCY.    See  Agents. 

AGENTS, 

general  principle  of  agency,  72. 

capacity  of  persons  to  become  agents,  73. 

married  women  as  husbands'  agents,  74. 

manner  of  creating  agency — express  authority,  75. 

implied  authority,  76. 

authority  implied  from  express  authority,  77. 

authority  implied  from   appointment  to   particular  clerkship  or 

office,'78. 
of  infants,  47. 
coupled  with  interest,  80. 
no  particular  form  of  authority  necessary  to  constitute,  unless  to 

execute  sealed  instrument  when  authority  must  be  under  seal,  75. 
form  of  signature  of,  of  private  corporations,  123,  124. 
distinction  between  private  and  public,  136, 137. 
form  of  signature  by  public,  137. 
notice  to,  in  law  notice  to  principal,  299. 
may  make  presentment  for  payment,  311. 
whether  possession  by,  is  prima  facie  evidence  of  right   to  make 

presentment  for  payment,  312. 
may  give  and  receive  notice  of  dishonor,  335,  336. 
may  make  waiver  of  presentment  and  notice,  363. 
may  make  and  receive  payment,  372,  374. 
responsible  for  checks  they  receive,  456. 

981 


INDEX. 

References  are  to  Sections. 

AGEISTTS— Continued. 

cannot  receive  anytlaing  but  money  in  liquidation  of  debt,  375. 

who  may  be,  to  accept,  212,  21!t. 

within  what  time  must  agent  malve  presentment  for  acceptance,  215. 

authority  implied  from  previous  recognitions  or  ratifications  of 
agency, 79. 

revocation  of  authority — presumed  continuance  of  authority,  80. 

eflect  of  special  instructions  upon  general  authority,  81. 

signature  by  procuration,  Sla. 

implied  limitation  of  agent's  authority  to  act  for  the  benefit  of  prin- 
cipal, 82. 

ratification  of  unauthorized  acts,  83. 

liability  of  agent  for  unauthorized  acts,  84,  13G. 

form  of  signature  by  agent,  85. 

exceptions  to  liability  of  agents,  80. 

liability  of  principal  on  paper  executed  in  the  agent's  name,  87. 

action  by  principal  on  paper  made  payable  to  agent,  88. 

cannot  delegate  authority,  89. 

of  corporations,  119, 127,  135, 137. 

AGREEMENTS, 

controlling  the  operation  of  bills  and  notes,  40,  43. 

kinds  of,  40. 

memoranda,  41. 

eflect  of  memoranda,  41a. 

collateral,  42. 

to  renew,  43. 

for  delay,  as  considerations,  167. 

to  render  service,  as  consideration  for  commercial  paper,  173. 

to  suppress  evidence  illegal,  173. 

failure  by  non-performance  of,  as  effecting  consideration,  204. 

to  accept,  226. 

for  waiver  of  presentment  and  notice,  363. 

ALIEN  ENEMIES, 

as  parties,  66. 

contracts  with,  as  a  consideration,  184. 

as  agent,  principal,  80. 
ALLONGE, 

place  for  indorsements,  264. 
ALTERATIONS.    See  Forgery. 
ALTERNATIVE, 

drawees,  16. 

payees,  18. 
982 


INDEX. 

References  are  to  Sections. 

AMBIGUOUS  INSTRUMENTS, 

construction  of,  S. 
AMOUNT, 

to  be  paid,  certainty  as  to,  28. 

any  alteration  in  principal  and  interest  material,  394, 

in  coupon  bonds  must  be  certain,  475. 

ANTECEDENT  OR  EXISTING  DEBT, 
as  a  consideration,  164. 

ANTE-DATING, 

of  bills  and  notes,  11. 

APPROPRIATION, 
of  payments,  377. 

ASSIGNMENT, 

of  corporate  drafts  or  warrants,  139. 

of  choses  in  action  in  general,  241. 

of  non-negotiable  paper — subject  to  what  defenses,  242. 

of  negotiable  instruments  payable  to  bearer,  243,  244,  245. 

of  negotiable  paper  payable  to  order,  247. 

effect  of  indorsement  of  paper  payable  to  order  after  an,  248. 

of  negotiable  paper,  equitable  or  implied,  249. 

title  to  commercial  paper  passes  without  delivery,  250. 

transfer  by  legal  process,  251. 

transfer  by  donatio  mortis  causa,  252. 

as  applied  to  bills  of  exchange,  5,  5a,  56,  5c. 

right  of,  by  corporation,  118. 

right  of  personal  representatives  to  make,  148. 

partial  indorsement  operates  as,  258. 

of  debt  secured  by  mortgage,  whether  it  operates  as  assignment  of 

mortgage,  305. 
guaranty  may  be  assigned,  419. 
as  applied  to  checks,  452. 

ASSIGNORS, 

of  negotiable  instruments  payable  to  bearer,  liability  of,  244. 

AT  SIGHT,  24. 

paper  payable,  whether  entitled  to  grace,  315. 
paper  payable,  when  overdue,  295. 

ATTACHMENT, 

of  commercial  paper,  251. 

ATTESTATION, 

in  bills  and  notes,  33. 

983 


INDEX. 

References  are  to  Sections. 

ATTORNEY'S  FEES, 

whether  agreement  for,  impairs  negotiability  of  note  or  bill,  286. 
whether  usurious  to  include  charge  for,  190. 

AU  BESOIN, 

payment,  what  it  means,  16. 


B. 

BANK  BILLS  OR  NOTES, 

payment  in,  29a. 

or  post-notes,  explained,  464. 

Avhen  overdue — statute  of  limatitions,  465. 

liability  of  transferer  of,  466. 

lost  or  destroyed,  467. 

national,  468. 

paper  payable  in,  non-negotiable,  375. 

BANKRUPT  AND  INSOLVENT  PAYEE.  65. 

BANKS  AND  BANKING.    See  Bank  Bills. 

violation  of  banking  acts  as  affecting  consideration,  197. 

implied  powers  of  the  cashier,  120. 

form  of  indorsement  by  cashier,  127. 

implied  powers  of  the  president,  121. 

checks  drawn  on  bank  or  banker,  432. 

checks  certified  by  bank,  436,  437,  438. 

right  of  check-holder  to  sue  bank,  452. 

right  of  bank  to  offset  amount  due  by  check-holder,  453. 

checks,  evidence  of  Avhat  in  hands  of  bank,  455. 

BEARER 

paper  payable  to,  how  transferred,  243. 

liability  of  assignors  of  instruments  payable  to,  244. 

indorsement  of  instruments  payable  to,  257rt. 

possession  of  instruments  payable  to,  prima  facie  proof  of  bona  fide 

ownership,  303. 
checks,  payable  to,  transferable  by  delivery,  440. 

BILLS  OF  CREDIT,  463 

BILLS  OF  EXCHANGE,    See  Acceptanc: . 
defined,  2. 

foreign  and  inland,  3. 
sets  of  foreign,  4. 

984 


INDEX. 

References  are  to  Sections. 

BILLS  OF  EXCHANGE Continued. 

effect  of,  5,  5c. 

for  a  part  of  a  fund,  5a. 

for  whole  of   fund,  56. 

not  drawn  on  a  particular  fund,  5c. 

drawn  without  right  to  expect  acceptance  and  payment,  355. 

with  bill  of  lading  attached,  effect  of  drawing,  494. 

authority  of  agent  to  draw,  82. 

implied  authority  of  cashier  or  president  to  draw,  120, 121. 

forbearance  good  consideration  for  acceptance  of,  170. 

donor  cannot  make  gift  of  his  own,  252. 

protest  of.    See  Protest. 

notice  of  dishonor  of.    See  Notice  of  Dishonor. 

BILLS  OF  LADING, 

definition  and  nature  of,  491. 
form  and  contents  of,  492. 
transfer  of,  —  their  negotiability,  493. 

effect  of  attaching  bill  of  lading  to  draft  on  vendee  for  the  purchase 
money,  494. 

BILLS  AND  NOTES, 

requisites  and  component  parts  of,  10,  35. 
the  date,  10. 

ante-dating  and  post-dating,  11 
name  of  drawer  or  maker,  12. 
form  and  place  of  signature,  12a 
joint  and  several  notes,  13. 
two  or  more  drawers,  14. 
name  of  the  drawee,  15. 
address  to  drawees  in  alternative,  16 
designation  of  the  payee,  17. 
joint  and  alternative  payees,  18. 

fictitious  or  non-existing  parties  —  adopted  names,  19. 
same  person  as  different  parties,  20. 
words  of  negotiability,  21. 
note  made  negotiable  at  particular  bank,  22. 
a  distinct  obligation  to  pay,  23. 
time  of  payment,  24. 
payment  must  be  unconditional,  25,  25d. 
payment  out  of  a  particular  fund,  26. 
words  of  advice,  27. 

certainty  as  to  amount  to  be  paid,  28,  286. 
payment  in  money  only,  29,  29e.  ( 

place  of  payment,  30. 

private  corporations  as  parties.    See  Private  Corporations. 

985 


INDEX. 

References  are  to  Sections. 

BILLS  AND  NOTES— Continued. 

government  and  municipal  corporations  as  parties.    See  Muxicipal 

AND  Public  Corporations. 
consideration  in.    See  Consideration. 
acknowledgment  of  consideration,  31. 
sealed  instruments  not  commercial  paper,  32. 
attestation  by  witnesses,  33. 
delivery,  34,  34rf. 
executed  in  blank.  35. 
agreements  controlling  the  operation  of,  40,  43. 

kinds  of,  40. 

memoranda,  4L 

effect  of  memoranda,  41<i. 

collateral,  42. 

to  renew,  43. 
in  capacity  of  parties,  46,  66. 

infants,  4G,  51. 

lunatics,  52,  56. 

drunken  persons,  57. 

all  persons  under  guardianship — spendthrifts,  58. 

of  married  women,  59,  G4. 

of  bankrupt  and  insolvent,  65. 

alien  enemies,  G6. 
law  of  agency,  in  application  to.    See  Agents. 
partners  as  piirties.     See  Partners. 

receivable  after  dissolution  of  partnership,  how  indorsed,  108. 
executed  before  and  Issued  after  dissolution  of  partnership,   109. 
payment  by,  379,  382. 
protest  of.     See  Protest. 

notice  of  dishonor  of.    See  Notice  op  Dishonor, 
Insufficient  description  of,  in  giving  notice  of  dishonor,  345. 
forgery  and  alteration  of.     See  Forgery. 
rights  of  bona  fide  holder  of  altered,  397. 
BLANK, 

bills  and  notes  executed  in,  35. 

instruments  intrusted  to  another,  and  wrongfully  filled  up,  283. 
signature,  instruments  written  over,  284. 
in  bills  of  lading,  492. 
indorsement  in,  226. 

possession  of   paper  indorsed  in,  prima  facie  proof  of    bo7ia  fde 
ownership,  303. 

BONA  FIDE  IIOLDEES, 

accommodation  paper  in  the  hands  of,  82,  99,  116. 
986 


INDEX. 

References  are  to  Sections. 

BONA  FIDE  HOLDERS— Continued. 

of  paper  issued  by  corporation  ultra  vires,  116. 

effect  of  illegality  of  consideration  on,  178. 

general  statement  in  respect  to  the  rights  of,  279. 

what  defenses  will  prevail  against,  2S0. 

cases  of  forgery,  2S1. 

instruments  void  for  want  of  delivery  by  maker  or  drawer,  282. 

blank  instruments  intrusted  to  another  and  wrongfully  filled  up,  283. 

instruments  written  over  blank  signatures,  284. 

instruments  executed  by  mistake  or  under  false  representations,  2S5. 

instruments  delivered  in  violation  of  instructions,  286. 

instruments  executed  under  duress,  287. 

bona  fide  transferees   of  money  and   negotiable  instruments  not 

subject  to  same  rule  as  such  transferee  of  chattels,  1. 
bills  of  exchange  purporting  on  its  face  to  be  respectively  foreign 

or  inland,  cannot  be  shown  to  be  otherwise  in  hands  of,  3. 
party  entitled  to  bill  of  exchange  can  compel  delivery  to  him  of  all 

of  its  parts,  even  in  the  hands  of,  4. 
of  paper  delivered  on  Sunday  bearing  different  date,  34c. 
speciallimitationsupon  authority  of  partners  not  binding  upon,  100. 
the  transferee  of  bill  or  note  payable  to  order,  by  assignment  or 

delivery  not,  247. 
protected  from  defenses  by  estoppel,  288. 
what  is  meant  by  bona  fides,  289. 
valuable  consideration  must  be  paid  by,  290. 
when  price  conveys  notice  of  fraud,  291. 
indorsement  for  less  than  face  value,  when  usurious,  292. 
amount  of  recovery  against  maker  and  indorser,  293. 
usual  course  of  business,  294. 
before  and  after  maturity,  295. 

instruments  payable  on  demand,  or  at  sight  when  overdue,  296. 
transfer  when  installment  of  principal  or  interest  is  overdue,  297. 
transfer  on  last  day  of  grace,  298. 
must  be  purchaser  without  notice,  299. 
actual  and  constructive  notice,  300. 

constructive  notice  in  respect  to  accommodation  paper,  301. 
lis  pendens — garnishment  and  trustee  process — public  records,  3j2. 
burden  of  proving  character  as,  303. 
pledgees  of  commercial  paper  as,  165,  304. 
of  commercial  paper,  secured  by  mortgage,  305. 
of  altered  bill  or  note,  rights  of,  397. 
of  coupon  bonds,  rights  of.  473. 
of  municipal  bonds,  what  defenses  may  be  set  up  against,  482. 

987 


INDEX. 

References  are  to  Sections. 

BONA  FIDE  HOLDERS— Continued. 

want  of  delivery  as  defense  against,  109. 

accomuiodation  paper  of  corporations  in  hands  of,  116. 

accommodation  paper  issued  by  casliier  valid  in  hands  of,  120. 

no  one  can  be,  who  has  notice  of  defenses,  134. 

paper  in  which  original  payee  was  designated  as  trustee  or  guar- 
dian in  hands  of,  145. 

want  of  consideration  no  defense  against,  154. 

indorsee  of  paper  in  discharge  of  existing  debts  not,  165. 

whether  pledgee  is,  1G.5, 

of  collateral  security,  166. 

usurious  instrument,  unless  usurious  character  appears  on  face  of 
it,  enforceable  in  hands  of,  196. 
BOXA  FIDES.    See  Bona  Fide  Holders. 

defined,  289,  289,  305. 
BONDS.    See  Coupon  Bonds. 
BRIBERY, 

as  aflecting  consideration,  186. 
BROKER, 

liability  of,  in  sale  of  paper  payable  to  bearer,  245. 
BURDEN  OF  PROOF,    See  Proof. 

as  to  bona  fide  ownership,  303. 

when  illegality  of  consideration  constitutes  no  defense  against  bona 
fide  holder,  the  burden  of  proof  on  plaintiff  to  show  he  took 
paper  iu  good  fi^ith,  178. 

as  to  time  of  alteration,  393. 

C. 
CALENDAR  MONTH, 

used  in  computation  of  time  of  payment,  31G. 
CAPACITY.     See  Incapicity  of  Parties. 

of  indorsers  warranted  by  maker,  49,  50,  63,  65,  118. 
of  drawer  warranted  by  acceptor,  230. 
of  payee  warranted  by  acceptor,  230. 
CASHIER, 

implied  powers  of,  120. 
form  of  indorsement  by,  127. 
•    has  implied  power  to  certify  checks,  438. 

bank  bills  and  coupon  bonds  usually  required  to  be  signed  by,   464, 

475. 
implied  authority  to  execute  and  negotiate  negotiable  instruments, 

78. 
implied  powers  of,  do  not  always  extend  to  assistants,  120. 

988 


INDEX. 

References  are  to  Sections. 

CERTAINTY, 

as  to  amount  to  be  paid,  28,  286. 

payable  with  exchange,  28a. 

stipulations  to  pay  costs  for  collection,  286. 
CERTIFICATES, 

United  States  silver  and  gold,  462. 
CERTIFICATES  OF  DEPOSIT, 

origin  and  natui-e  of,  485. 

transfer  and  negotiability,  486. 

overdue,  487. 

necessity  for  demand — statute  of  limitations,  488 

payment  by  transfer  of,  489. 
CERTIFICATES  OF  PROTEST, 

what  they  contain,  326. 
CERTIFICATES  OF  RECEIVERS,  498. 
CERTIFICATES  OF  STOCK, 497. 
CERTIFICATION  OF  COMMERCIAL  PAPER, 

certified  notes,  233. 

certified  checks,  234,  436. 

form  of,  437. 

who  may  certify  for  the  bank,  438. 

what  checks  may  be  certified  and  when,  439. 
CHAMPERTY,  - 

maintenance  and,  as  consideration,  194. 
CHARITY, 

subscriptions  to,  as  a  consideration,  161. 
CHECKS, 

definition,  430. 

payable  to  order,  431. 

are  drawn  on  bank  or  banker,  432. 

apparently  and  presumptively  drawn  against  a  deposit,  433. 

payable  on  demand  without  grace,  434. 

form  and  f6rmalities,  435. 

certification  of,  234,  436. 

form  of  certification,  437. 

who  may  certify  for  the  bank,  438. 

what  checks  may  be  certified  and  when,  439. 

negotiability  and  transfer  of,  440. 

memorandum  checks,  441. 

presentment,  notice  and  protest  of,  442. 

within  what  time  there  must  be  presentment  of,  443. 

whether  presentment  can  be  made  by  mail,  444. 

excuses  for  failure  or  delay  in  demand  and  notice  of  dishonor,  445. 

989 


INDEX. 

References  are  to  Sections. 

CHECKS— Continued. 

when  considered  stale  or  overdue,  44G. 

right  to  draw  against  deposits — how  must  check  be  executed,  447. 

whether  death  revokes,  448. 

conditions  wliich  the  bank  may  exact,  before  honoring,  449. 

order  of  payment,  450. 

forgeries  and  alterations,  451. 

right  of  checkholders  to  sue  bank,  452. 

right  of  bank  to  offset  amount  due  by  checkholder,  453. 

overchecks,  454. 

actual  and  presumptive  rights  and  liabilities  of  drawer  of,  455. 

payment  by,  456. 

implied  authority  of  cashier,  or  president  to  draw,  120,  121. 

held  in  Louisiana,  drawer  or  maker  can  make  absolute  gift  of,  160. 

whether  donor  can  make  gift  of  his  own,  252. 

CHOSE  IN  ACTION.    See  AssiGNiyrENT. 

not  assignable  at  common  law,  rule  gradually  disappeared,  21, 32,  48. 

reduction  of,  to  possession  by  husband,  04. 

the  assignability  in  general  of,  241. 

whether  they  may  be  levied  upon  by  execution,  251. 
CIRCULAR  NOTES,  500. 
CIRCUMSTANCES  WHICH  EXCUSE  WANT  OF  PRESENTMENT, 

PROTEST  AND  NOTICE.    See  Excuses  for  want  of  Puesext- 

JIENT,  ETC. 

CLERK, 

of  notary  public  cannot  make  presentment  for  payment,  324. 

COLLATERAL  AGREEMENTS, 

in  bills  and  notes,  42. 
COLLATERAL  OBLIGATIONS, 

in  bills  and  notes,  29e. 
COLLECTION, 

stipulation  to  pay  costs  for,  286. 

indorsement  for,  26S. 

indorsers  for,  must  have  notice  of  dishonor,  336. 
COMITY  OF  NATIONS.    See  Conflict  of  Laws. 
COMMERCIAL  PAPER, 

origin  and  functions  of,  1-24. 

commercial  paper  defined,  1-4. 

bills  of  exchange  defined,  4-6. 

foreign  and  inland  bills,  G-8. 

sets  of  foreign  bills,  8-10. 

990 


INDEX. 

References  are  to  Sections* 

COMMERCIAL  PAPER— Continued. 

effect  of  bills  of  exchange,  10-19. 

promissory  note,  what  is,  19,  22. 

indorsement,  transfer  by,  22,  23. 

ambiguous  instruments,  construction  of,  23,  24. 

requisites  and  component  parts  of  bills  and  notes.  See  Bills  and 
Notes. 

agreements  controlling  operation  of  bills  and  notes.  See  Agree- 
ments. 

persons  incapacitated  to  become  parties  to.  See  Incapacity  of 
Parties. 

law  of  agency  in  application  to.    See  Agents. 

partners  as  parties.    See  Partners. 

private  corporations  as  parties.    See  Corporations,  Private. 

municipal  or  public  corporations  as  parties.  See  Municipal  Cor- 
porations. 

trustees,  guardians,  and  personal  representatives,  145-148. 

the  law  of  consideration  applied  to.    See  Consideration. 

as  collateral  security,  166. 

transfer  of,  as  a  consideration,  172a, 

transfer  of,  in  general.  See  Transfer  of  Commercial  Paper  in 
General. 

transfer  of,  by  indorsement.     See  Transfer  by  Indorsement. 

the  law  of  bona  fide  holders  applied  to.     See  Bona  Fide  Holders. 

protest  of.     See  Pkotest. 

notice  of  dishonor  of.    See  Notice  of  Dishonor. 

forgery  and  alteration  of.    See  Forgery. 

COMPONENT  PARTS  OF  BILLS  AND  NOTES.    See  Bills  and  Notes- 

COMPOUNDING  OF  CRIMES, 
as  a  consideration,  183. 

COMPROMISE, 

as  a  consideration,  174. 

COMPUTATION, 

of  time  of  payment,  316. 

CONDITIONAL  AND  ABSOLUTE  INDORSEMENT,  267. 

CONDITIONAL  AND  QUALIFIED  ACCEPTANCES,  227. 

CONFEDERATE  CURRENCY.    See  Currency. 
as  a  consideration,  185. 

CONFLAGRATION, 

as  excuse  for  want  of  presentment,  etc,  354. 

991 


INDEX. 

References  are  to  Sections. 

■CONFLICT  OF  LAWS, 

what  law  determines  liability  for  re-exchange,  409. 

general  principles,  r)06. 

what  law  governs  liability  of  maker,  drawer  and  acceptor,  507. 

what  law  governs  liability  of  indorsers,  50S. 

what  law  governs  formalities  in  respect  to  presentment,  protest  and 
notice,  509. 

law  applicable  to  stamps  on  commercial  paper,  510. 

law  relating  to  payment,  interest  and  damages,  511. 

foreign  bill  of  exchange  interpreted  and  construed  by  law  at  place  of 
payment,  3. 
COXSI  DERATION, 

acknowledgment  of,  31. 

what  necessary  to  bind  personal  representatives,  147. 

the  necessity  of,  151. 

what  instruments  import,  152. 

what  liabilities  presumed  to  be  included  in,  153, 

between  whom  question  may  be  raised  as  to,  147, 154. 

real  and  apparent  relation  of  parties,  155. 

to  whom  consideration  must  be  given,  156. 

when  one  consideration  answers  for  another,  157. 

accommodation  paper,  158. 

kinds,  good  and  valuable,  159. 

donatio  mo?-tis  causa  of  one's  own  paper,  160. 

subscriptions  to  charitable  objects,  101. 

moral  obligations,  when  sufficient,  162. 

money, — contemporary  loans  and  future  advances,  163. 

existing  debts  as,  104. 

for  indorsement  of  commercial  paper,  existing  debts  as,  165. 

commercial  paper  as  collateral  security,  106. 

when  agreement  for  delay  may  be  implied  as  the,  167. 

every  pledge  of  commercial  paper  founded  upon  sufficient,  168. 

the  New  York  decisions,  169. 

debt  of  another  as,  170. 

valuable,  other  than  money,  171. 

transfer  of  property — contingent  and  equitable  interest,  172. 

transfer  of  commercial  paper,  172a. 

contract  for  services,  173. 

release  of  legal  liabilities — compromises,  174. 

forbearance  and  extension  of  time  of  payment,  175. 

indemnity  as,  176. 

illegal,  177. 

eflfect  of  illegality  on  bona  fide  holders,  178. 

992 


I 


INDEX. 

References  are  to  Sections. 

CONSIDERATION— Continuefl. 

partial  illegality  of,  179. 

effect  of  renewal  on  illegal,  ISO. 

equitable  relief  to  maker  on  account  of  illegal,  181. 

what  are  illegal  considerations,  182. 

compounding  of  crimes  and  misdemeanors,  183. 

contracts  with  alien  enemies  and  in  aid  of  rebellion,  184. 

Confederate  currency,  185, 

bribery,  186. 

lobbying,  187. 

wagers,  188. 

option  contract,  when  illegal,  189. 

contracts  in  restraint  of  trade,  190. 

contracts  in  restraint  of  marriage,  191. 

contracts  for  procurement  of  marriages  and  divorces,  192. 

contracts  in  fraud  of  creditors,  193. 

maintenance  and  champerty,  194. 

offenses  against  morality  and  religion,  195. 

usury,  196. 

violations  of  the  banking  acts,  197. 

other  illegal  considerations — knowledge  of  illegal  intent,  198. 

how  illegal  considerations  may  be  purged,  199. 

inadequacy  of,  200. 

failure  of,  total  and  partial,  201. 

failure  in  title,  202. 

failure  in  value,  203. 

failure  by  non-performance  of  agreement,  204. 

failure  of,  after  its  delivery,  205. 

valuable,  must  be  paid  by  bona  fide  holder,  290. 

paid  to  corporation  for  invalid  bond,  when  recoverable,  479. 

of  guaranties,  417. 

executed,  cannot  support  subsequent  contract,  157. 

promise  as,  157,  161, 173,  183. 

oral  contract  invalid  by  statutes  of  fraud  sufficient  consideration  for 

promissory  note,  162. 
loss  suffered  by  depreciation  of  confederate  currency,  not  sufficient 

consideration  for  promissory  note,  162. 
antecedent  debt  of  bankrupt  sufficient,  for  promissory  note.  162. 
arbitrators  award  sufficient,  for  promissory  note,  163. 
any  alteration  in,  material,  394. 

is  it  necessary  that  guaranty  should  contain  acknowledgement  of,  418 
CONTEMPORARY, 

loans,  as  a  consideration,  163. 

63  993 


INDEX. 

References  are  to  Sections. 

CONTENTS, 

of  certificate  of  protest,  326. 
of  bill  of  lading,  492. 

CONTRACT, 

for  services,  as  a  consideration,  173. 

of  infants,  4G,  47,  48,  50. 

of  lunatics,  52,  53,  54,  55. 

of  drunken  persons,  57. 

of  niarried  women,  61,  62. 

executory,  cannot  be  enforced  unless  supported  by   valuable  con- 
sideration, 151. 

good  consideration   insufficient  to  support    executory,  except  in 
deeds  under  statute  of  uses,  159. 

with  alien  enemies  and  in  aid  of  rebellion,  184. 

option  when  illegal,  189. 

bills  of  lading  as,  491. 

entered  into  under  false  representations,  285. 

law  governing  contract.     See  Conflict  of  Laws. 

in  restraint  of  trade,  as  consideration,  190. 

in  restraint  of  marriage,  as  consideration,  191, 

for  procurement  of  marriages  and  divorces,  as  consideration.  192. 

in  fraud  of  creditors,  as  consideration,  193. 

assignor  of  instrument,  payable  to  bearer,  warrants  parties  <  om- 
petent  to,  244. 
CONTEIBUTION, 

liability  of  indorsers  for,  261. 

when  co-sureties  liable  for,  426. 
COPARTNERSHIP.    See  Partners. 
CORPORATIONS,  MUNICIPAL   OR  PUBLIC.     See  Municipal   ok 

Public  Corporations. 
CORPORATIONS,  PRIVATE, 

power  to  issue  commercial  paper,  115. 

bona  fide  holders  of  paper  issued  ultra  vires — accommodation  paper, 
116. 

commercial  paper  under  senl,  32,  117. 

power  to  be  payees  and  indorsees,  118. 

power  to  appoint  agents  to  execute  their  commercjal  paper,  119. 

implied  j^owers  of  cashier,  120. 

implied  powers  of  president,  121. 

implied  power  of  other  officers,  122. 

form  of  signature  by  agents  of,  123.  124. 

form  of  acceptance  by  agents  of,  125. 

994 


INDEX. 

References  are  to  Sections. 

CORPORATIONS,  PRIVATE— Continued, 
form  of  indorsement  by  agents  of,  126. 
exceptions  as  to  cashiers  of  banks,  127. 

drafts  or  warrants  of  one  corporate  officer  upon  another,  128. 
may  ratify  unauthorized  acts  of  agent,  83. 
in  whom  power  of  is  vested,  119. 

CORPORATIONS,  PRIVATE  AND  PUBLIC,  114. 

COSTS, 

for  collection,  stipulation  to,  286. 

COUPON  BONDS, 

definition  and  nature  of,  471. 

who  may  execute,  472. 

negotiability  of, — rights  of  holder,  473. 

to  whom  payable, — transfer  by  indorsement  and  delivery,  474. 

the  formal  parts  of  bond  and  coupon — seal  not  necessary,  475. 

presentment  of  coupons  for  payment,  476. 

interest  and  exchange  on  bond  and  coupon,  477. 

actions  on  bonds  and  coupons,  478. 

when  consideration  paid  to  corporation  for  invalid  bond  may  be  re- 
covered, 479. 

when  municipal  corporation  has  power  to  issue  negotiable  coupon 
bonds,  4S0. 

for  what  object  may  municipal  corporations  be  empowered  to  issue 
bonds,  481. 

what  defenses  may  be  set  up  against  bona  fide  holders  of  municipal 
bonds,  482. 

COURSE  OF  BUSINESS, 

usual,  what  is  meant  by,  294. 
COVERTURE,  DISABILITY  OF.    See  Married  Women. 
CREDIT,  LETTERS  OF,  500. 

notice  of  acceptance  necessary  where  guaranty  takes  form  of,  420. 
CREDITORS, 

contracts  in  fraud  of,  as  consideration,  193. 

CROSS-NOTES  AND  ACCEPTANCES, 
consideration  for  each  other,  172a, 

CURRENCY, 

payment  in,  stipulated  for,  29a. 

depreciation  of  confederate  currency  not  sufficient  consideration 

for  promissory  note,  162. 
paper  payable  in.  non-negotiable,  375. 
paper  money  or,  460. 

995 


I 


INDEX. 

References  are  to  Sections. 
D. 

DAMAGES.    See  Exchange  axd  Re-bxchange. 

in  lieu  of  re-exchange,  40G. 
when  indorsers  liable  for,  407. 
by  what  law  governed,  511. 

DATE, 

of  bills  and  notes,  10. 
ante-dating  and  post  dating,  11. 
delivery  presumed  to  have  been  made  on,  34a. 
holder  may  require  that  date  of  acceptance  be  written  in  bill,  220. 
place  of.  prima  facie  place  of  payment,  314. 
in  computation  of  time  of  payment,  day  of,  is  excluded,  316. 
If  not  given  or  impossible  one,  computation  made  from  day  of  de- 
livery, 31 G. 
court  will  take  judicial  notice  of,  on  which  holidays  fall,  316. 
notarial  certificate  must  contain  date  of  presentment,  326. 
misdating  as  excuse  for  non  presentment,  360. 
any  change  in  date  of  instrument,  but  not  in  date  of  indorsement 

material  alteration,  394.  ■ 

of  checks,  435. 
DAYS.    See  Grace,  Days  of. 

in  computation  of  time  of  payment,  316. 
in  computation  of  time  of,  for  presentment,  214. 
DEATH, 

revokes  agency,  80. 

dissolves  partnership,  106. 

of  drawer,  whether  it  revokes  bill  or  check,  34. 

of  party  as  excuse  for  non-presentment  and  failure  of  notice,  360. 

whether  revokes  check,  448. 

of  accommodating  party  before  negotiation  of  paper  operates  as 

revocation  of  authority,  158. 
does  not  affect  title  of  bona  fide  holder  having  notice  of  it,  unless 

he  knew  paper  was  accommodation  paper,  300. 
of  maker  or  accepter,  no  excuse  for  want  of  presentment,  protest 

and  notice,  366. 
DtBTS, 

existing,  as  consideration,  164,  165. 

of  another,  as  considerations,  170. 

barred  by  statute  of  limitations,  sufficient  consideration,  for  promis-  ' 

Bory  note,  162. 
of  married  women  cannot  be  made  consideration  of  notes,  executed 

by  them  after  their  husband's  death,  162. 
'  996 


INDEX. 

References  are  to  Sections. 

DEBTS— Continued. 

antecedent  of  bankrupt,  sufficient  consideration  for  promissory 
note,  162. 

indorsee  of  paper  in  discharge  of  existing  debt,  not  bona  fide  hol- 
der, 1G5. 

when  notes  given  in  discharge  of,  operate  as  absolute,  when  con- 
ditional payment,  379, 

DEFAULT, 

in  presentment  and  notice,  what  excuses.  See  Excuses  for  Want 
OF  Presentment,  etc. 

DEFENSES, 

what  will  prevail  against  bona  Jide  holders,  2S0.  See  Bona  Fide 
Holders, 

forgery,  281. 

instruments  void  for  want  of  delivery,  282. 

blank  instruments  intrusted  to  another  and  wrongfully  filled  up,  283. 

instruments  written  over  blank  signatures,  281. 

instruments  delivered  in  violation  of  instructions,  286. 

instruments  executed  by  mistake  or  under  false  representa- 
tions, 285. 

instruments  executed  by  under  duress,  287. 

barred  by  estoppel  as  against  bo7ia  Jide  holders,  288. 

failure  of  consideration  as,  201,  202,  203,  204,  205. 

transferee  of  non-negotiable  paper  subject  to  what,  242. 

the  indorsee  of  overdue  paper  takes  it  subject  to  what,  295. 

assignee  of  non-negotiable  instruments  of  indebtness  secured  by 
mortgage  takes  both  subject  to  equitable,  305. 

DELAY, 

in  receipt  of  paper,  as  excuse  for  want  of  presentment,  etc,  S31. 

when  agreement  for,  may  be  implied  as  consideration,  167. 

on  part  of  holder  to  proceed    against  acceptor  will  not  operate  as 

discharged,  232. 
excuse  for,  in  demand  and  notice  of  dishonor  of  checks,  445. 
collaterals  given  for  security  of  overdue  paper  implied   agreement 

for  delay,  167. 

DEL  CREDERE, 

agent  acting  under  commission  of,  how  bound,  86. 

DELEGATION, 

of  authority  by  agent,  89. 
DELIVERY, 

of  bills  and  notes,  34-34d. 

997 


i 


1 


INDEX. 

References  are  to  Sections, 

DELIVERY— Continued. 

to  whom,  34a. 

time  of,  346. 

on  Sunday,  34c. 

as  an  escrow,  34d. 

title  to  commercial  paper  passes  by  sale  without  delivery,  250. 

included  in  the  definition  of  indorsement,  2')G. 

want  of,  as  a  defense  against  bona  fide  holder,  109,  282. 

transfer  by,  as  security,  when  excuse  for  want  of  presentment,  etc, 
367. 

delivery  of  bills  and  notes  of  firm  after  disolution  does  not  bind 
firm,  109. 

where  payee  indorsed  bill  or  note  before  death,  personal  representa- 
tives cannot  pass  title  simply  by,  148. 

failure  of  consideration  after  its,  205. 

acceptance  not  complete  without,  221. 

what  negotiable  instruments  may  be  transfered  by,  243. 

liability  of  broker  in  transfer  of  negotiable  paper  payable  to  bearer 
by,  245. 

in  violation  of  instructions,  2S6. 

computation  of  time  made  from,  where  date  is  not  given,  316. 

essential  to  passing  title  of  coupon  bonds,  474.  } 

bank  notes  usually  transferred  by,  466.  j 

essential  to  pass  title  by  bill  of  lading,  493. 

DEMAND.    See  Prksentment  foi?  Pay.ment. 
checks  are  payable  on,  without  grace,  434. 

DEMAND.    See  Protest. 

instruments  paj'able  on,  when  overdue,  296. 

what  the  payor  can,  373. 

necessity  for,  in  respect  to  certificates  of  deposit,  488. 

in  respect  to  sureties  and  grantors,  421. 

paper  payable  on,  not  entitled  to  days  Of  grace,  315. 

excuses  for  delay  in,  demand  and  notice  of  dishonor  of  dhecks,  445. 

DEPOSIT, 

checks  as  apparently  and  presumptively  drawn  against  a,  433. 
right  to  draw  against,  447. 

DEPOSIT,  CERTIFICATES  OF.    See  Certificates  of  Deposit. 

DESTRUCTION, 

of  bill  as  an  implied  acceptance,  224. 
DETENTION, 

and  destruction  of  bill,  as  an  implied  acceptance,  224. 

998 


INDEX. 

References  are  to  Sections. 

dilige:n^ce, 

what  is  due,  in  making  inquiries  after  parties,  359. 
in  presentment  for  payment  and  giving  notice  of  dishonor,  382. 
in  preventing  alteration,  395. 

in  discovering  address  of   parties  entitled    to  presentment  and 
notice,  358. 

DISABILITY,     See  Incapacity  op  Pakties. 

DISCHARGE, 

of  guarantors  and  sureties,  423,  424. 

of  drawer  and  indorser,  3M  et  aeq. 

failure  of  holder  to  make  presentment  does  not  operate  as,  of 

sureties  and  guarantors,  310.  ' 

when  failure  of  demand  and  notice  operates  as,  of  guarantors,  421. 
of  drawer  and  indorsers  by  certification  of  checks,  436. 

DISEASE,  EPIDEMIC, 

as  excuse  for  non-presentment,  354. 

DISHONOR, 

noting  of,  and  extending  protest,  325. 
notice  of.    See  Notice  of  Dishonor. 

DISSOLUTION, 

of  partnership,  effect  of,  what  notice  required,  106. 
what  powers  implied  in  authority  to  close  up  business,  107. 
Indorsement  of  firm's  bills  and  notes  receivable  after,  108. 
bills  and  notes  executed  before  and  issued  after,  109. 
power  of  ex-partners  in  respect  to  paper  barred  by  statute  of  limi- 
tations, 110. 

DISTURBANCES,  POLITICAL  AND  SOCIAL, 
as  excuse  for  non-presentment,  etc,  354. 

DIVERSION.     See  Bona  Fide  Holder. 

whether  it  shifts  burden  of  proof  on  plaintiff  to   show   bona  fide 

ownership,  301. 
when  will  preclude  purchaser  from  being  bona  fide  holder,  301. 
what  amounts  to,  in  respect  to  accommodation  paper,  301. 
any  diversion  of  paper  from  its  intended  use  will  discharge  surety, 

423. 

DIVORCE, 

contract  for  procurement  of,  192. 

DONATIO  MORTIS  CAUSA,  252. 
of  one's  own  paper,  160. 

999 


INDEX. 

References  are  to  Sections. 

DRAFTS, 

or  warrants  of  one  corporation  officer  upon  another,  128,  138. 

indorsement  or  assignment  of  corporate,  139. 

presentment  for  payment,  140. 

payable  out  of  a  particular  fund,  141. 

signed  by  commissioners  as  such  bind  them  individually,  145. 

eftect  of  attaching  bill  of  lading  to  draft  on  vendee,  494. 

DRAWEES, 

name  of,  15. 

address  to,  in  the  alternative,  16. 

time  he  has  in  which  to  accept  bill,  217. 

when  may  be  bound  as  guarantor  if  not  acceptor,  219. 

whether  can  designate  place  of  payment  in  accepting  bill,  394. 

what  they  guarantee  in  instruments,  399. 

DRAWER, 

and  maker,  name  of,  12. 

form  and  place  of  signature,  12a. 

two  or  more  drawers,  14.  ' 

liability  of,  by  what  law  governed,  507. 

of  check,  actual  and  presumptive  rights  and  liabilities,  455, 

married  woman  as,  59. 

when  the  right  to  expect  the  bill  to  be  honored  by  drawee,  355. 

not  entitled  to  presentment  or  notice,  if  paper  issued  for  his 

accommodation,  or  he  is  provided  with  means  for  taking  up  bill  or 

note  by  acceptor,  355. 
what  they  guarantee  in  instrument,  399. 
hy  what  law  liability  of,  for  re-exchange  is  determined,  409. 
certification  of  checks  discharge  drawer,  436. 

DRAWING  BILL  WITHOUT  RIGHT  TO  EXPECT  ACCEPTANCE 
AND  PAYMENT,  AS  EXCUSE  FOR  WANT  OF  PRESENTMENT, 
ETC,  355. 

DRUNKEN  PERSONS, 
as  parties,  57. 

DUE  BILL, 

when  negotiable,  23. 

DURESS, 

instruments  executed  under,  287. 

if  surety  has  been  induced  to  sign  by,  he  will  be  discharged  as  lo 
guilty  parties,  423. 

1000 


I 


INDEX. 

References  are  to  Sections. 

E. 

EFFECTS, 

bill  drawn  without,  effects  in  hands  of  drawee,  when  fraud,  whether 
drawer  can  expect  notice,  if  bill  is  drawn  without,  355. 
ELECTIOX, 

right  of  in  holder  to  treat  ambiguous  instrument  as  bill  or  note,  8. 

of  law  of  place  as  to  interest,  511 
EPIDEMICS, 

as  excuse  for  want  of  presentment,  etc,  354, 
EQUITABLE  ASSIGNMENT.    See    Assignjient    axd    Transfer    in 
General. 

whether  bill  of  exchange  is  an,  5-5c. 

whether  check  is  an,  — . 

of  paper  payable  to  order,  by  delivery,  247. 

of  commercial  paper  in  general,  249. 

by  sale  without  delivery,  250. 
EQUITABLE  EELIEF, 

to  maker  on  account  of  illegal  considerations,  181. 
ERASURES,  EFFECT  OF.    See  Forgery,  Alteration,  Spoliation. 
ESCROW, 

delivery  as,  34rf. 

ESTOPPEL, 

bona  fide  holders  protected  from  defenses  by,  288. 

when  parties  estopped  from  denying  genuineness  of  another's 
signature,  399. 

where  cashier  represents  to  parties  secondarily  liable  that  indebted- 
ness has  been  liquidated,  bank  estopped  by  representations  of 
cashier,  120. 

corporation  estopped  to  deny  authority  of  president  to  sign  com- 
mercial paper  by  his  continued  exercise,  121. 

drawee  estopped  by  acceptance  to  deny  he  has  funds  of  drawer  in 
his  possession,  where  bill  has  passed  into  hands  of  bona  fide 
holder,  222. 

acceptor  estopped  from  showing  drawer's  signature  to  be  a 
forgery,  230. 

to  whom  must  representations  be  made  and  at  what  time  in  order 
to  operate  as,  288. 

EVIDENCE, 

of  what  is  protest,  327. 

admissibility  of  parol,  in  respect  to  indorsements,  272-274. 
parol,  admissible  to  control  or  vary  terms  of  the  paper,  42. 

1001 


INDEX. 

References  are  to  Sections, 

EVIDENCE— Continued. 

parol,  admissible  to  show  who  undisclosed  principal  is.  87,  88. 

may  show  want  of  consideration  between  original  parties,  154. 

when  admissible  to  show  real  relation  of  parties,  155. 

admissibility  of  parol,  to  prove  real  character  of  concealed  sureties, 
422. 

parol,  admissible  to  show  from  what  time  an  undated  paper  was 
intended  to  operate,  10. 

parol,  admissible  to  show  mistake  in  date,  10. 

parol,  admissible  to  explain  uncertainty  as  to  drawee,  15. 

parol,  admisgible  to  show  that  term  "currency"  was  used  in  sense 
of  money,  29a. 

adoption  of  different  names  may  be  proved  by  parol,  85. 

parol,  admissible  to  explain  signature  of  agent  when  it  is  doubtful 
whether  personal  or  corporate  obligation  was  intended,  123. 

parol,  admissible  to  show  who  real  principal  is,  123. 

may  show  by  parol  that  drawer  instead  of  acceptor  is  primary 
debtor,  155. 

want  of  consideration  cannot  be  proved  by  pecuniary  condition  of 
payee,  159. 

agreement  to  suppress  illegal,  183. 

where  drawee  accepts  in  different  name  from  that  by  which  he  is 
designated  in  bill,  parol  evidence  admissible  to  show  that  both 
names  describe  one  and  the  same  person,  219. 

parol,  admissible  to  explain  uncertain  and  ambiguous  terms  in  con- 
ditional acceptances,  227. 

place  of  payment  may  be  proved  by  parol,  unless  there  be  designa- 
tion of  place  in  body  of  instrument,  314. 

parol,  not  admissible  to  show  that  an  ordinary  check  was  intended 
to  be  a  memorandum  check,  441. 

check  in  hands  of  drawer  evidence  of  what,  in  hands  of  bank,  455. 

EXCHANGE, 

stipulation  to  pay  note  or  bill  with,  28a. 

and  re-exchange  explained,  405. 

statutory  damages  in  lieu  of  re-exchange,  406. 

indorsers  liable  for  re-exchange  or  damages,  407. 

is  acceptor  liable  for  re-exchange,  408. 

what  law  determines  liability  for  re-exchange,  409. 

re-exchange  and  damages  upon  promissory  notes,  410. 

effect  of  part  payment  on  claim  for  re-exchange,  411. 

interest — what  rate  recoverable,  412. 

on  bond  and  coupon,  477. 

1002 


INDEX. 

References  are  to  Sections. 

EXCHANGE— Continued. 

not  usiirious  to  provide  for  the  payment  of,  196. 
EXCHANGE,  BILLS  OF.    See  Bills  of  Exchange. 
EXCUSES  FOR  WANT   OF    PRESENTMENT,    PROTEST    AND 
NOTICE, 

war,  political  and  social  disturbances,  pestilence,  conflagration, 
floods,  etc,  354, 

drawing  without  right  to  expect  acceptance  and  payment,  355. 

what  relations  between  parties  will  serve  as,  356. 

when  the  note  is  void,  357. 

inability  to  discover  address  of  parties,  358. 

what  is  due  diligence  in  making  inquiries  after  parties,  359. 

sickness  and  death  of,  or  accident  to,  the  holder,  360. 

delay  in  receipt  of  the  paper,  361. 

when  party  has  received  security  for  his  secondary  liability,  362. 

waiver  of  presentment  and  notice,  363. 

waivers  made  after  execution  and  before  maturity  of  paper,   364. 

waivers  after  maturity,  365. 

what  wiU  not  constitute,  366. 

transfer  by  delivery  as  security,  367. 

for  failure  or  delay  in  demand  and  notice  of  dishonor  of  checks,  445. 

EXECUTION,  FORM  OF, 

of  checks,  447. 
EXECUTION, 

levy  of,  on  commercial  paper,  251. 
EXECUTORS  AND  ADMINISTRATORS, 

as  parties  to  commercial  paper,  146. 

what  consideration  necessary  to  bind,  147. 

as  payee  or  indorser,  148. 

EXISTING, 

debts,  as  a  consideration,  164,  1^5. 

EXTENSION, 

of  time  of  payment,  when  it  discharges  sureties  and  guarantors,  424. 
of  time  of  payment*,  as  a  consideration,  175. 
of  protest,  after  noting  dishonor,  325. 

F. 

FAILURE, 

of  consideration,  total  and  partial,  201. 

in  title,  202. 

in  value,  203. 

by  non-performance  of  agreement,  204. 

1003 


INDEX. 

References  are  to  Sections. 

FAILURE— Continued. 

of  considerution  after  its  delivery,  205. 

to  accept,  eft'ect  of,  210. 

excuses  for,  in  making  demand  and  giving  notice  of  dishonor  of 
checks,  -445. 
FALSE  REPRESENTATIONS, 

instruments  executed  under,  in  respect  to  bona  fide  holders,  285. 
FICTITIOUS  PARTIES, 

to  bills  and  notes — adopted  names,  19. 

negotiable  instruments  payable  to,  treated  as  payable  to  whom,  243. 

FIDUCIARIES  AS  PARTIES, 
trustees  and  guardians,  145. 
personal  representatives,  146, 

what  consideration  necessary  to  bind  personal  representatives,  147. 

executor  or  adminstrator  as  payee  and  indorser,  148. 
FIGURES, 

importance  of  stating  amount  of  the  paper  in,  28. 

change  of  marginal  to  coiTespond  with  statement  in  body  of  in- 
strument, no  material  alteration,  28,  395. 
FIRM.    See  Partners. 
FLOODS, 

as  excuse  for  want  of  presentment,  etc,  354. 
FORBEARANCE, 

to  sue,  as  consideration,  175. 

as  consideration  for  collateral  security,  166. 

to  sue  on  debt  of  one  person  good  consideration  for  commercial 
paper  of  another,  170, 

when  implied,  170. 
FOREIGN  BILLS,    See  Bells  of  Exchange. 

sets  of,  4, 
FOREIGN  MONEY, 

payment  in,  296. 
FORGERY, 

as  a  defense  against  bona  fide  holders,  281. 

definition  and  nature  of,  391. 

alteration,  spoliation  and,  distinguished,  392, 

presumption  as  to  time  of  alteration  and  burden  of  proof,  393. 

what  are  material  alterations,  394. 

what  are  immaterial  alterations,  or  correction  of  mistakes,  395. 

effect  of  authorized  alterations,  396, 

rights  of  bona  fide  holder  of  altered  bill  or  note,  397. 

1004 


INDEX. 

References  are  to  Sections. 

FORGERY— Continued. 

eflect  of  adoption  of  a  forged  signature  as  one's  own,  398. 

when  one  is  estopped  from  denying  the  genuineness  of  another's 
signature,  399. 

recovery  of  money  paid  on  forged  instruments,  400. 

and  alteration  of  checks,  451. 

holder  may  change  marginal  figures  to  correspond  with  statement 
in  body  of  note,  28. 

alteration  as  admitted  by  acceptance,  230. 

and  alteration  of  instrument  discharges  surety,  423, 
FRAUD, 

when  price  conveys  notice  of,  291. 

whether  it  shifts  bui'den  of  proof  to  show  bona  fide  ownership,  305. 

essential  element  of  forgery,  392. 

if  surety  has  been  induced  to  sign  by,  he  will  be  discharged  as  to 
guilty  parties,  423. 

for  party  to  draw  check  on  bank  in  which  he  has  no  funds,  445, 454. 
FRAUDS,  STATUTE  OF, 

how  guaranties  are  affected  by,  418. 

how  acceptances  are  effected  by,  222. 

guaranties  of  solvency  of  parties  to  instruments  payable  to  bearer 
held  does  not  apply  to,  244. 

requires  all  guaranties  to  be  in  writing,  270. 

certification  of  checks  by  bank  without  funds  within  statute   of 
frauds,  437. 
FUNDS, 

want  of,  as  excuse  for  non-presentment,  355. 

checks  drawn  presumptively  against  deposit  of,  430,  433. 

fraud  for  party  to  draw  check  on  bank  in  which  he  has  no,  445. 

if  not  enough  to  make  payment  of  check  in  full,  bank  is  not  obliged 
to  make  part  payment,  449. 

G. 

GARNISHMENT, 

of  commercial  paper,  251. 

when  constructive  notice  to  bona  fide  holders,  302. 
GIFT,    See  Donatio  Mortis  Causa. 

of  commercial  paper,  not  negotiation  in  ordinary  course  of  busiue.   . 
290,  294. 

held  in  Louisiana  drawer  may  make  absolute,  of  his  check,   IGO. 
GIVING  TIME, 

effect  of,  in  discharging  parties  secondarily  liable,  310. 

1005 


INDEX. 

References  are  to  Sections. 

gold  and  silvek  certificates,  united  states,  402. 
go^t:rnments, 

as  parties  to  commercial  paper,  132. 

interdicts  of,  preventing  intercourse  and   commerce   between  its 
citizens   ai.d   citizens  of  other  countries  as  excuse   for  want  of  ^ 

presentment,  protest  and  notice,  354.  If 

GRACE,  DAYS  OF.  315. 

payment  on  last  day  of,  298. 

checks  payable  on  demand  and  without,  434. 

coupons  payable  without,  471. 

number  of,  allowed,  determined  by  law  at  place  of  payment,  509. 
GREENBACK  CURRENCY,  460,  4Ca. 

whether  paper  payable  in,  is  negotiable,  29a. 
GROSS  NEGLIGENCE, 

how  far  it  affects  the  bona  fide  character  of  the  holder,  289,  291. 
GUARANTORS, 

as  irregular  indorsers,  270,  273. 

and  sureties  distinguished,  415. 

forms  and  kinds  of  guaranties,  416. 

consideration  of  guaranties,  417. 

how  affected  by  statut  j  of  frauds,  418, 

negotiability  of  guaranties,  419. 

notice  of  acceptance  of  guaranty,  420. 

necessity  for  demand  of  principal,  and  notice  of  default  to,  421. 

concealed  sureties  as  accommodation  parties — nature  of  their  lia- 
bility— admissibility  of  parol  evidence  to  prove  real  character,  422. 

what  acts  will  discharge  sureties  and,  423. 

continued — surrender  of  securities  and  extension  of  time  of  pay- 
ment, 424. 

presumption  of  indulgence,  arising  from  receipt  of  secureties,  425. 

remedies  of  the  surety  and  guarantor — contribution,  420. 

when  firm's  name  so  indorsed  on  back,  paper  as  cannot  be indorser, 
constructive  notice  to  holder  signature  made  as,  99. 

corporations  as,  116. 

statute  of  frauds  requires  all  guaranties  to  be  in  writing,  270. 

rights  and  liabilities  of.    See  SumcriKS  and  Guakantors. 
GUARANTY.    See  Guarantors. — Sureties  and  Guarantors. 

GUARDIANS, 

as  parties  to  commercial  paper,  145. 

payment  may  be  made  to,  374. 
GUARDIANSHIP, 

persons  under,  as  parties,  58. 

1006 


INDEX. 

References  are  to  Sections. 
H. 

HOLDER.    See  Boxa  Fide  Holders. 

duties  of,  where  bill  or  note  is  taken  in  payment,  382, 
HOLIDAYS,  LEGAL, 

effect  of,  in  computation  of  time  of  payment,  BIG. 

if  next  day  after  protest  be,  holder  or  indorser  has  until  next  day 
to  give  notice  of  dishonor,  337. 
HONOR, 

acceptances  for,  22S. 

payment  for,  378. 

admissions  of  acceptor  for,  231. 

HOUR, 

of  the  day  for  presentment  for  payment,  317. 

court  will  take  judicial  notice  of  banking  hours  of  any  large  city 
lying  within  its  jurisdiction,  317. 
HUSBAND  AND  WIFE.    See  Married  Women.  ' 

I. 

IDENTITY, 

of  parties  of  same  name,  not  presumed,  20. 
IDIOTS.    See  Lunatics. 
ILLEGAL  CONSIDERATIONS,  177. 

how  they  may  be  purged,  199. 

effect  of  illegality  on  bona  fide  holders,  17S. 

partial  illegality  of  consideration,  179. 

efifect  of  renewal  on  illegal  considerations.  ISO. 

equitable  relief  to  maker  on  account  of  illegality  of  consideration, 
181. 

what  are,  182. 

compounding  of  crimes  and  misdemeanor,  183. 

contracts  with  alien  enemies  and  in  aid  of  rebellion,  184,  185. 

bribery,  186, 

lobbying.  187. 

wagers,  188. 

option  contract,  when,  189. 

contracts  in  restramt  of  trade,  190. 

contracts  in  restraint  of  marriages,  191. 

contracts  for  procurement  of  marriages  and  divorces,  192. 

contracts  in  fraud  of  creditors,  193. 

maintenance  and  champerty,  194. 

offenses  against  morality  and  religion,  195. 

usury,  19G. 

1007 


INDEX. 

References  are  to  Sections. 

ILLEGAL  CONSIDERATIONS— Continued, 
violation  of  banking  acts,  197. 

other  illegal  considerations,  knowledge  of  legal  intent,  198. 
original  payee  cannot  procure  superior  title  of  indorsee  for  value, 

where  original  consideration  was  illegal,  by  indorsing  to  a  party 

who  in  turn  reindorses  back  to  him,  155. 

ILLEGALITY.    See  Illegal  ConjBderations. 
ILLXESS, 

as  excuse  for  non-presentment,  3G0. 
IMBECILES.     See  Lunatics. 

IMMATERIAL  ALTERATIONS.    See  ALTERATtONS. 
IMMORAL  CONTRACT.    See  Illegal  Considerations. 

as  consideration,  188, 189,  195. 
IMPRISONMENT, 

as  an  excuse  for  non-presentment,  360. 
INABILITY  TO  FIND  PARTY, 

as  excuse  for  non-presentment,  358. 
INADEQUACY, 

of  consideration,  200. 
INCAPACITY  OF  PARTIES, 

disability  of  infants — liability  for  necessaries,  46. 

infant's  contracts,  voidable,  not  void,  47. 

infant's  notes  and  bills,  48-51. 

lunatics  and  imbeciles,  52. 

effect  of  insanity,  when  unknown  to  other  party,  53. 

lunatic's  contracts  for  necessaries,  o4. 

ratification  of  lunatic's  contracts,  55 

lunatic  as  payee  and  indorser,  56. 

contracts  of  drunken  persons,  57. 

disability  of  all  persons  under  guardianship, — spendthrifts,  58. 

disability  of  coverture — commercial  paper  of  married  woman,  59, 63. 

reduction  of  wife's  choses  in  action  to  possession,  64. 

bankrupt  or  insolvent  payee,  65. 

alien  enemies,  66. 

to  become  agents,  73,  74. 

avoids  instrument  in  the  hands  of  bona  fide  holder,  280.  ■* 

INDEMNITY,  \ 

as  a  consideration,  176.  1 

as  excuse  for  non-presentment,  — .  ) 

INDORSEMENT,  \ 

of  the  firm's  bills  and  notes  receivable  after  dissolution,  108.  \ 

1008  j 


INDEX. 

Befereuces  are  to  Sections. 

INDORSEMEXT— Continued. 

by  agent  of  corporation,  126,  127. 

right  of  by  corporation,  118. 

existing  debt  as  consideration  for,  165. 

forbearance  good  consideration  for,  of  surety  or  guarantee,  170. 

INDORSEMENT,  TRANSFER  BY, 
defined,  7. 

of  paper  payable  to  order,  246. 

eflfect  of  subsequent  indorsement — whether  it  relates  back   to  as- 
signment, 248. 
meaning  of, — includes  delivery,  256. 
when  necessary  to  pass  legal  title,  257. 
of  instruments  payable  to  bearer,  257a. 
of  non-negotiable  instruments,  2576. 
can  not  be  partial,  258. 
liability  of  an  indorser,  259. 
liability  of  indorser  "  without  recourse,"  260. 
successive  indorsers,  when  liable  to  each  other,  261. 
by  whom,  262. 
to  whom,  263. 
place  for — allonge,  264. 
form  of,  265, 
in  full  and  in  blank,  266. 
absolute  and  conditional,  267, 
restrictive,  268. 
time  and  place  of,  269. 

irregular  joint-maker,  sureties,  guarantors,  indorsers,  270,  271. 
admissibility  of  parol  evidence  in  respect  to  irregular,  272,  273. 
in  general  admissibility  of  parol  evidence  in  respect  to,  274. 
for  less  than  face  value,  when  usurious,  292. 
what  can  be  recovered  of  maker  and  indorser,  293. 
transfer  by,  of  coupon  bonds,  474. 
of  checks,  440. 

of  corporate  drafts  or  warrants,  139. 
Wghts  of  personal  representatives  to  make,  148. 

ENDORSEE, 

accommodation  paper  in  the  hands  of  a  bona  fide,  99. 
who  can  be,  263. 
who  are,  7. 
corporations  as,  118. 

not  holder  of  paper  for  value  indorsed  in  discharge   of  existing 
debts,  165. 

64  1009 


INDEX. 

References  are  to  Sections. 

INDORSEE— Continued. 

when  holders  for  value  or  bona  fide  holder  of    collateral  security, 

168,  169. 
amount  can  recover  when  indorsee  for  less  than  face  value  of  in- 
strument, *2l»3.  J 
of  overdue  paper  takes  it  subject  to  what  defenses,  295.  ^ 

INDORSERS, 

persons  under  disability  as,  49,  56,  63, 65. 

private  corporations  as,  118. 

personal  representatives  as,  148. 

liability,  259. 

without  recourse,  liability  of,  260. 

successive,  when  liable  to  each  other,  261. 

who  can  be,  262. 

irregular,  270,  271. 

amount  of  recovery  against,  when  indorsement  is  for  less  than  face 
value,  293. 

whether  liable  for  re-exchange  or  damages,  407. 

what  law  governs  liability  of,  508. 

accommodation,  whether  liable  or  instrument  executed  under  du- 
ress, 287. 

accommodation,  liable  to  pledgee  only  for  amount  of  his  claim 
against  pledgor,  304. 

necessary  to  give  notice  of  dishonor  to,  of  overdue  paper,  386. 

what  time  is  given  indorser  to  give  notice  of  dishonor  to  other  in- 
dorsers,  337. 

not  entitled  to  presentment  or  notice  if  paper  issued  for  his  accom- 
modation, or  he  is  provided  with  means  for  taking  up  bill  or  note 
by  acceptor,  355. 

by  what  law  liability  of,  for  re-exchange  is  determined,  409. 

certification  of  checks  discharges  indorser,  436. 

who  are,  7. 

corporation  as,  118. 

married  women  as,  59. 

agreement  of,  to  continue  liability  on  note,  sufficient  consideration 
for  agreement  to  forbear,  175. 

INFANCY.     See  Infants. 

INFANTS, 

disability  of— liability  for  necessaries,  46. 
contracts  not  void  but  voidable,  47. 
notes  and  bills,  48. 
as  payees  and  indorsers,  49. 

1010 


INDEX. 

References  are  to  Sections. 

[NFAXTS— Continued. 

ratification  of  infant's  bills  and  notes,  50. 

joint  note  or  bill  of  infant  and  adult,  51. 
INFORMALITY, 

of  expression  does  not  aflect  negotiability,  23. 

INITIALS, 

of  maker  or  drawer  suffice  for  signature,  12a. 
of  indorser  suffice  for  signature,  265. 
INJURY, 

lack  of,  no  excuse  for  non-presentment,  366. 

INLAND  BILLS, 

distinguished  from  foreign,  3. 

as  to  protest  of,  321.    See  Protest. 
INQUIRIES  AFTER  PARTIES, 

what  is  due  dilligence  in  making,  359. 

INSANE  PERSONS.    See  Lunatics. 
INSANITY.    See  Lunaiics. 
INSOLVENCY, 

as  Excuse  for  non-presentment. 
INSTALLMENT, 

payment  in  default  of,  25rf. 

of  principal  and  interest  overdue,  transfer  of  paper  when,  297. 

days  of  grace,  allowed  on  the  maturity  of  each,  315. 

presentment  must  be  made  on  maturity  of  each,  315. 
INSTRUCTIONS, 

instruments  delivered  in  violation  of, — bona  fide  holder,  286. 

eff"ect  of  special  upon  general  authority,  81. 

effect  of  party  giving  special  as  to  what  address  notice  of  dishonor 
should  be  sent  to,  342. 
INSTRUMENTS, 

what,  import  consideration,  152. 
INTENT, 

knovvledge  of  illegal,  as  affecting  consideration,  198. 

intent  to  defraud  an  essential  element  of  forgery,  392. 
INTEREST, 

transfer  of  paper,  when  there  is  overdue  installment  of,  297. 

effect  of  presentment  for  payment  on  accrument  of,  310, 

when  recoverable  on  bills  and  notes,  310. 

what  law  applies  to  interest,  511. 

when  contract  rate  prevails,  412. 

1011 


INDEX. 

References  are  to  Sections. 

INTEREST— Continued. 

on  coupons  and  bonds,  477. 

statutes  in   some  states  declare  it  to  be  illegal  to  exact  over  certain 
rate  of,  292. 

reservation  of,  always  tends  to  prove  paper  was  intended  to  be 
negotiable  for  considerable  time,  296. 

any  alteration  in  amount  of  material,  394. 
INVALIDITY  OF  NOTE, 

as  excuse  for  want  of  presentment,  etc.,  357. 
I.  O.  U.  OR  DUE  BILL, 

whether  negotiable,  23. 

IRREGULAR  AND  AIMBIGUOUS  INSTRUMENTS, 

how  construed,  8. 

IRREGULAR  INDORSEMENTS 

joint  makers,  sureties,  guarantors,  indorsers,  270,  271. 
admissibility  of  parol  evidence  in  respect  to,  272,  273. 

J. 

JOINT  AND  ALTERNATIVE, 
drawees,  16. 
payees,  18. 

JOINT  AND  SEVERAL, 

notes,  13. 

notes  executed  by  partner,  102. 
JOINT-MAKERS, 

as  irregular  indorsers,  270,  273. 

JOINT  PARTIES.    See  Joint  and  Several. 
JUDGMENT, 

power  to  confess,  whether  it  affects  negotiability,  29«. 

how  rendered,  when  paper  is  payable  in  a  given  coin  or  currency 

effect  of,  as  a  merger  of  liability  on  commercial  paper. 
JUDICIAL  SALE.    See  Legal  Process,  251. 

purchaser  at,  not  a  bona  fide  holder,  294. 

li. 

LADING,  BILLS  OF.    See  Bills  of  Lading. 
LAW  OF  PLACE.    See  Conflict  of  Laws. 
LEGAL  HOLIDAYS.    See  Holidays,  Legal. 

effect  of,  in  computation  of  time  of  payment,  316. 
LEGAL  LIABILITY.     See  Liabilities. 

release  of,  as  a  consideration,  174. 

1012 


INDEX. 

References  are  to  Sections. 

LEGAL  PROCESS, 
transfer  by,  251. 

LEGAL  TENDER.     See  Payment,  Money. 

negotiable  instruments  payable  only  in,  29,  29o. 

banknotes,  are  not,  4G4,  4G8. 

United  States  silver  and  gold  certificates  not,  462. 

LEGAL  TITLE, 

when  indorsement  necessary  to  pass,  257. 

LETTERS  OF  CREDIT,  500,    See  Credit,  Letters  of. 

LEX  DOMICILII. 

LEX  FORI. 

LEX  LOCI  CONTRACTUS. 

LEX  LOCI  REI  SITAE. 

LEX  LOCI  SULOTIONIS. 

LIABILITIES, 

release  of  legal,  as  a  consideration,  174. 

what  presumed  to  be  included  in  the  consideration,  153. 

how  acceptor's  liability  may  be  waived,  232. 

of  assignors  of  instruments  payable  to  bearer,  244. 

of  broker  in  transfer  of  negotiable  paper  payable  to  bearer,  245. 

of  transferers  of  bank  notes,  466. 

of  maker,  drawer,  indorser  and  acceptor  governed  by  what  law, 
507,  508. 

of  indorsers  of  instruments  payable  to  bearer,  257a. 

of  indorsers  of  non-negotiable  instruments,  2576. 

of  an  indorser,  259,  260,  261. 

any  change  in,  of  parties  material  alteration,  894. 

of  indorsers  for  re-exchange  or  damages,  407. 

of  acceptor  for  re-exchange  or  damages,  408. 

what  law  determines  liabilities  for  re-exchange,  409. 

rights  and  liabilities  of  sureties  and  guarantors.  See  Sureties 
AND  Guarantors  op  Concealed  Sureties  as  Accommodation 
Parties,  422. 

of  bank  on  certified  checks,  436. 

of  drawer  of  check,  455. 

LIMITATIONS,  STATUTE  OF, 

power  of  ex-partners  in  respect  to  paper  barred  by,  110. 
in  respect  to  bank-notes,  465. 
in  respect  to  certificates  of  deposit,  488. 
creditor  may  appropriate  payment  to  debt  barred  by,  377. 
court    will   not    appropriate    payment    to    debt    barred    by,    in 
preference  to  one  not  bftrred,  377. 

1013 


INDEX. 

References  are  to  Sections. 

LIS  PENDENS, 

as  constructive  notice  to  bona  fide  holders,  302. 

LOANS, 

contemporary  and  future,  as  considerations,  163 

LOBBYING, 

as  a  consideration,  187. 

LOSS  OF  BILL  OR  NOTE, 

as  excuse  for  non-presentment,  366. 

of  bank  notes,  467. 
LUNATICS  AS  PARTIES, 

lunatics  and  imbeciles,  52. 

effect  of  insanity,  when  unknown  to  other  party,  53. 

contracts  for  necessaries,  54. 

ratification  of  contracts,  55. 

as  payees  and  indorsers,  56. 

as  agent — principal,  SO. 
MAINTENANCE, 

and  champerty,  as  consideration,  194. 
MAKER, 

name  of,  in  promissory  notes,  12. 

form  and  place  of  signature,  12a. 

joint,  as  irregular  indorser,  270,  273. 

amount  of  recovery  against,  when  indorsement  is  for  less  than  fac( 
value,  293. 

liability  of,  by  what  law  governed,  507. 

married  woman  as,  59. 

partners  as,  95. 

equitable  relief  to,  on  account  illegal  consideration,  181. 

accommodation,  liable  to  pledgee  only  for  amount  of  his   claim 
against  pledgor,  304. 

never  necessary  to  make  presentment  for  payment  in  order  to 
hold,  310. 

has  whole  day  in  which  to  make  payment,  317. 

what  they  guarantee  in  instruments,  399. 

MALA  FIDES.    See  Bona  Fide  Holders. 
MALIGNANT  DISEASE, 

as  excuse  for  non-presentment,  354. 
MARK, 

when  sufficient  as  a  signature,  12. 
MARRIAGE.    See  Married  Women. 

contracts  in  restraint  of,  191. 

1014 


I 


INDEX. 

References  are  to  Sections. 

MAERIAGE— Continued. 

contracts  for  the  procurement  of,  192 
effect  of  on  ante-nuptial  bills  and  notes,  60. 

MARRIED  WOME^T, 

as  parties  to  commercial  paper,  59. 

effect  of  marriage  on  ante-nuptial  notes  and  bills,  60. 

exceptions  to  contractual  disability,  61. 

commercial  paper  with  separate  estate,  62. 

as  payees  and  indorsers,  63. 

reduction  of  wife's  choses  in  action  to  possession,  64. 

as  agents  for  husbands,  74. 

debts  of,  cannot  be  made  consideration  of  notes  executed  by  them 
after  death  of  husband,  162. 

husband  of,  proper  party  to  make  presentment  for  payment,  311. 

payment  may  be  made  to  husband  <if,  374. 
MATURITY, 

indorsement  before  and  after,  295. 

instruments  payable  on  demand,  or  at  sight,  when  overdue,  296. 

transfer  when  installment  of  principal  or  interest  is  overdue,  297. 

transfer  on  last  days  of  grace,  298. 
MEMORANDA, 

in  bills  and  notes,  41. 

effect  of,  41a. 

does  not  destroy  negotiability,  26. 

MEMORANDUM  CHECKS,  441. 
MINORS.     See  Infants. 
MISTAKE, 

instruments  executed  by,  in  respect  to  bona  fide  holders,  285. 

correction  of,  395. 

of  fact,  money  paid  under  may  be  recovered,  but  not  if  of  law,  373. 

correction  of  to  conform  instrument  to  intention  of  parties,  no 
material  alteration,  395. 

money  paid  under  mistake  of  fact,  or  forged  instrument,  may  be  re- 
covered, 400. 
MONEY, 

payment  only  in.  29,  29«,  375. 

bank-bills  and  currency,  29a. 

payment  in  foreign,  296. 

of  Confederate  States,  29c. 

denomination  stated  in  body  of  paper,  29d. 

collateral  obligations,  29e 

1015 


INDEX. 

References  are  to  Sections. 

MOKEY—  Continued. 

as  a  consideration,  1G3,  164,  105. 

valuable  considerations,  other  than,  171. 

paid  on  forged  instruments,  when  recoverable,  400. 

nothing  but,  constitutes  lawful  tender  of  payment,  375. 

checks  must  call  for  payment  in,  455. 

paper  money  or  currency,  4G0. 

United  States  silver  and  gold  certificates  as,  462. 
MONTH,  CALENDAR, 

used  in  computation  of  time  of  payment,  31G.  ^ 

MORALITY, 

and  religion,  offenses  against,  as  consideration,  195. 

MORAL  OBLIGATIONS, 
as  a  consideration,  162. 

MORTGAGE, 

bona  fide  holder  of  commercial  paper  secured  by,  305. 

given  to  secure  bond  covers  each  coupon,  471.  ^ 

MUNICIPAL  AND  PUBLIC  CORPORATIONS, 

as  parties  to  commercial  paper,  133. 
"^  how  far  their  obligations  are  negotiable,  134. 

what  agents  are  authorized  to  bind,  135. 

whether  unauthorized  agents  are  personally  liable,  136. 

form  of  signature  by  agents  of,  137. 

drafts  or  warrants  of  one  officer  upon  another,  whether  negotiable, 
138. 

indorsement  or  assignment  of  corporate  drafts  or  warrants,  139. 

presentment  of  warrants  for  payment,  14D. 

warrants  payable  out  of  particular  fund,  141. 

suit  on  original  indebtedness,  142. 

power  to  issue  negotiable  coupon  bonds,  480. 

for  what  objects  may  they  exercise  the  power,  481. 

what  defenses  may  be  set  up  against  bona  Jide  holders  of  bonds  of  > 
482. 

NATIONAL  BANK-NOTES,  468. 

NEGLIGENCE.     See  Mistake,  Forgery,  Bona  Fide  Holder,  Agent 

AXD  Pledgees. 
NEGOTIABLE  INSTRUMENTS.    See  Bills  and  Notes,  and  Commer- 
cial Paper. 
assignment  of.     See  Transfer  of,  etc.,  in  General. 
indorsement  of.    See  Int)ORSement. 

1016 


INDEX. 

References  are  to  Sections. 

NEGOTIABLE  INSTRUMENTS— Continued. 

See  BoxDS,  Checks,  Certificates  of  Deposit,  Drafts,  Warrants, 
Bills  of  Credit,  Letters  of  Credit,  Bills  of  Lading. 

executed  under  duress.  See  bona  jide  Holder. 

payment  of,  without  consent  of  holder  can  be  made  only  in  moneyi 
374. 
NEGOTIABILITY, 

words  of,  21. 

of  note  at  particular  bank,  22. 

of  obligations  of  municipal  and  public  corporations,  134. 

of  coupon  bonds,  473. 

of  certificates  of  deposit,  486. 

of  bills  of  lading,  493. 

of  guaranties,  419. 

of  checks,  440. 

of  drafts  or  warrants  of  one  officer  on  another,  138. 

failure  to  pay  interest  does  not  effect,  297. 

of  note,  whether  imparted  to  mortgage  that  secures  it,  305. 

NON  COMPOS  MENTIS.    See  Lunatics. 

NON-NEGOTIABLE  INSTRUMENTS, 
transfer  of,  242. 
indorsement  of,  2576. 

notes  and  bills  payable  to  two  or  more  in  the  alternative,  18. 
assignee  of,  secured  by  mortgage  takes  both,  subject  to  equitable 
defenses,  305. 

NOTARY  PUBLIC, 

proper  officer  to  make  protest  for  non-payment,  322. 

proper  officer  to  make  presentment  for  payment  in  preparation  for 

protest,  311,324. 

in  order  to  make  a  proper  acceptance  for  honor,  party  must  appeal 

before  notary  and  declare  his  intentions  to  accept  for  honor,  227, 

228. 
clerk  of,  cannot  make  presentment  for  payment,  324. 
must  make  protest  on  same  day  of  presentment  and  demand  or  note 

the  dishonor,  325. 
must  attach  seal  to  his  notarial  certificate,  326. 
not  duty  of,  to  give  notice  of  dishonor  to  drawer  and  makers,  327. 

NOTES, 

certified,  233. 

void,  as  excuse  for  want  of  presentment,  etc.,  356. 

NOTES  AND  BILLS.    See  Bills  and  Notes. 

1017 


INDEX. 

References  are  to  Sections. 

NOTICE, 

required  of  dissolution  of  partnership,  lOG. 

of  fraud,  when  price  conveys,  291. 

bona  fide  holder  must  be  purchaser  without,  299.  ; 

actual  and  constructive,  300. 

constructive,  in  respect  to  accommodation  paper,  301. 

lit  pendetis, — garnishment  and  trustee  process, — public  records,  302. 

excuses  for  want  of.    See  Excuses  fok  Want  of  Presentment,  etc. 

what  law  determines  requirements  of,  509. 

of  acceptance  of  guaranty,  '120. 

of  default,  when  necessary  to  be  given  to  guarantor,  421. 

as  to  usage  of  bank  to  give  notice  before  maturity  of  paper,  318.  j 

NOTICE  OF  DISHONOR,  j 

nature  and  necessity  of,  334.  J 

who  may  give  the,  335.  !j 

to  whom  should  be  given,  336.  !^, 

the  time  allowed  for  giving,  .337. 
mode  of  giving,  when  important,  338. 

mode  of  giving,  when  parties  reside  in  same  place,  339.  \; 

how  and  w^here  personal  notice  must  be  served,  340.  .' 

mode  of  giving,  when  parties  reside  in  dilTerent  places,  341. 
to  what  post-office  notice  should  be  addressed,  342. 
what  is  meant  by"  residing  at  same  place,"  343. 
what  constitutes  notice — may  be  verbal  or  written,  i.44. 
a  sufficient  description  of  bill  or  note,  345. 
statement  of  dishonor  and  protest,  346. 

statement  that  holder  looks  for  payment  to  party  notified,  347. 
allegation  and  proof  of  notice,  348. 

excuses  for  want  of.     See  Excuses  for  Want  of  Presentment,  etc. 
in  the  case  of  checks,  442,  445. 

where  two  or  more  drawers  or  makers  all  entitled  to,  14. 
when  drawer  or  drawee  are  same  parties  notice  not  necessary,  20. 
not  necessary  where  one  corporate  officer  draws  on  another,  128. 

NOTING  THE  DISHONOR, 
and  extending  protest,  325. 

O. 

OBLIGATIONS, 

to  pay  in  bills  and  notes,  23. 

collateral,  29e. 

moral,  as  a  consideration,  162. 

of  municipal  or  public  corporations  how  far  negotiable,  134. 

1018 


INDEX. 

References  are  to  Sections. 

OFFICERS, 

of  corporations,  implied  powers  of,  120,  122. 

no  officer  or  government  has  implied  power  to  bind  government  by 
his  execution  of  bills  and  notes,  132. 
OFFSET, 

by  bank  to  check  of  amount  due  by  checkholder,  453. 

of  wards  debts  in  action  on  note  made  payable  to  trustee,  guardian, 
etc.,  14.5. 
OPTION  CONTRACTS, 

when  illegal  as  a  consideration,  189. 
ORIGIN  AND  FUNCTIONS  OF  COMMERCIAL  PAPER,  1-8. 

commercial  paper  defined,  1. 

bills  of  exchange  defined,  2. 

foreign  and  inland  bills,  3, 

sets  of  foreign  bills,  4. 

effect  of  bills  of  exchange,  5-5c. 

promissory  note,  what  is,  6. 

indorsement,  transfer  by,  7. 

ambiguous  instruments,  construction  of,  8. 
OVERCHECKS,  454. 
OVERDUE, 

transfer  of  paper,  when  it  is,  295. 

instruments  payable  on  demand,  or  at  sight,  when, 296. 

transfer,  when  installment  of  principal  and  interest  is,  297. 

transfer  on  last  day  of  grace,  298. 

certificates  of  deposit,  487. 

when  checks  are  considered,  446. 

when  bank-notes  are,  4G5. 

the  indorser  of  overdue  paper  must  have  notice  of  dishonor,  336. 

coupons  which  are,  473. 

P. 

PAROL  EVIDENCE.    See  Evidence. 

admissibility  of,  in  respect  to  irregular  indorsements,  272,  273. 
in  respect  to  indorsements  in  general,  274. 
in  respect  to  concealed  sureties,  to  prove  real  character,  422. 
PARTIAL  ILLEGALITY, 

of  consideration,  179. 
PARTIAL  INDORSEMENTS,  258. 
PARTICULAR  BANK, 

note  made  negotiable  at,  22. 

paper  payable  at,  must  be  presented  for  payment  during  banking 
hours,  317. 

1019 


I 

i 


INDEX 

References  are  to  Sections. 

PARTICULAR  FUND, 

bills  of  exchange  not  drawn  on,  5c. 

paj  inent  out  of  a,  20. 

corporation  ^\•arrants  payable  out  of,  141. 
PARTIES  TO  COMMERCIAL  PAPER, 

fictitious  or  non-existing,  19. 

same  persons  as  difterent  parties,  20, 

incapacity  of.    See  Incapacity  of  Parties, 

acting  through  agents.     See  Agents. 

partners  as.     See  Partners. 

private  corporations  as.    See  Corporations,  Private. 

municipal  or  public  corporations  as.    See  Municipal  or  Public  Cor- 
poration. 

trustees,  guardians  and  personal  representatives,  145,  148. 

relations  between,  as  excuse  for  want  of  presentment,  etc.,  356. 
PARFNERS,  AS  PARTIES, 

general  propositions,  94. 

general  authority  of,  95. 

trading  partnerships,  96. 

other  than  trade  partnerships,  97. 

liability  on  accommodation  paper,  98. 

accommodation  paper  in  hands  of  bona  fide  indorsees,  99. 

special  limitations  upon  the  authority  of,  100.  '. 

ratification  of  unauthorized  issue  of  commercial  paper,  101.  i 

joint  and  several  notes  executed  by  partners,  102.  \ 

form  of  firm's  signature,  103.  ^ 

firm  doing  business  in  partner's  name,  104. 

signature  of  firm  in  acceptances,  105.  5 

eflfect  of  dissolution  of  partnership — what  notice  required,  106.  '^ 

what  powers  implied  in  the  authority  to  close  up  business,  107. 

indorsement  of  firm's  bills  and  notes  receivable  after  dissolution,  108- 

bilis  and  notes  executed  before  and  issued  after  dissolution,  109. 

power  of  ex-partner  in  respect  to  paper  barred  by  statute  of  limita- 
tions, 110. 

surviving  may  make  presentment  for  payment,  311. 

not  necesssary  to  make  presentment  to  all,  313. 

manner  of  giving  notice  of  dishonor  to,  336. 

when  entitled  to  make  waiver  of  notice  and  presentment  so  us  to 
bind  all,  363. 
PARTNERSHIP.    See  Partners. 
PAYEES, 

name  of,  in  bills  and  notes,  17. 

joint  and  alternative,  18. 

1020 


INDEX. 

Refereuces  are  to  Sections. 

PAYEES— Continued. 

corporations,  private,  as,  118. 

persons  under  disability  as,  49,  56,  63,  65. 

who  may  be,  16. 

bankrupt  or  insolvent  as,  65. 

personal  representatives  as,  148.    . 
PAYMENT, 

must  be  unconditional,  25. 

on  or  before  a  certain  date,  25a. 

when  convenient  or  possible,  256. 

on  return  of  note,  25c. 

in  default  of  installment,  25d. 

out  of  a  particular  fund,  26. 

certainty  as  to  amount,  28. 

with  exchange,  2Sa. 

stipulations  to  pay  costs  for  collection,  286. 

in  money  only,  29. 

in  bank-bills  or  currency,  29a, 

in  foreign  money,  296. 

in  money  of  Confederate  States,  29c 

denomination  stated  in  body  of  paper,  29d. 

collateral  obligations,  29e. 

place  of,  30. 

presentment  for.    See  Presentment  for  Payment. 

bill  drawn  without  right  to  expect,  355. 

and  its  effects,  371,  382. 

distinguished  from  sale  or  transfer,  371. 

who  may  make,  372. 

what  payor  can  demand,  373. 

to  whom,  374. 

made  with  what,  375. 

effect  of,  376. 

appropriation  of,  377. 

supra  protest  or  for  honor,  378. 

by  note  or  bill,  when  absolute  or  conditional,  244,  379. 

presumptions  in  respect  to  absolute  and  conditional,  how  rebutted, 
380. 

right  of  action  suspended  by  taking  bill  or  note  in,  381. 

duties  of  holders  of  bill  or  note  taken  in,  382. 

claim  for  re-exchange,  how  affected  by  part,  411. 

on  invalid  bond,  when  recoverable,  479. 

by  transfer  of  certificates  of  deposit,  489. 

by  what  law  governed,  511. 

1021 


INDEX. 

References  are  to  Sections. 

PAYMENT— Continued, 
order  of,  of  checks,  450. 
by  checks,  450. 

extention  of  time  of,  as  consideration  for  commercial  paper,  175. 
when  due.  when  no  time  for  is  expressed  in  paper,  29(j,  315. 
when  demand  for,  must  be  made  of  instruments  payable  on  demand, 

296. 
in  computation  of  time  of,  day  of  date  is  excluded,  316. 
protest  for  non.  See  Protest. 
statement  of,  in  giving  notice  of  dishonor  that  holder  looks  to  party 

notified  for,  347. 
part,  as  waiver  of  presentment  and  notice,  365. 
promise  after  maturity  to  make  payment  as  waiver  of  presentment 

and  notice,  365. 
any  change  in  time  of,  material  alteration,  394. 
any  alteration  in  medium  of,  material,  394. 
surrender  of  securities  and  extention  of  time  of,  424. 
of  checks  payable  to  order,  431. 
time  of,  of  certified  checks,  438. 
PAYMENT,  TIME  OF, 
in  bills  and  notes,  24. 

PERSONAL  REPRESENTATIVES, 

as  parties  to  commercial  paper,  146. 

what  consideration  necessary  to  bind,  147. 

the  executor  or  administrator  as  payee  and  indorser,  148. 

may  make  assignment  or  indorsement,  148. 

whether  ho'der  of  bill  must  present  to,  for  acceptance,  212,  366. 

when  may  make  presentment  for  payment,  311. 

when  demand  for  payment  should  be  made  of,  313. 

may  give  and  receive  notice  of  dishonor  when,  335,  336. 

in  case  of  death  of  drawer  or  indorsers  notice  of  dishonor  should  be 
given  to,  of  maker  or  acceptor,  366. 

payment  may  be  made  to,  374. 

any  one  of,  may  draw  checks  against  deposits  of  decedents  estate, 
447. 
PERSONS.    See  Parties. 
PESTILENCE, 

as  excuse  for  want  of  presentment,  etc.,  354. 
PLACE, 

of  payment,  stated  in  bills  and  notes,  30,  314. 

of  presentment  for  acceptance,  213. 

for  indorsement — allonge,  264. 

1022 


INDEX. 

References  are  to  Sections. 

PLACE— Continued. 

of  indorsement  and  transfer,  269. 

of  presentment  for  payment,  314. 

of  protest,  323. 

if  paper  payable  at  particular,  notarial  certificate  must  state  place 
of  presentment,  326. 

mode  of  giving  notice  of  dishonor  when  parties  reside  in  same, 
in  different,  339,  341. 

what  is  meant  by  residing  at  the  same,  343. 

alteration  in,  of  payment  material,  394. 

parties  to  coupon  bonds  may  stipulate  for  place  of  payment,  475 
PLEDGE, 

of  commercial  paper,  in  relation  to  consideration,  168,  169. 

in  respect  to  rights  of  bona  fide  holders,  304. 

of  accommodation  paper,  1:"8. 
PLEDGEES, 

of  commercial  paper,  rights  and  powers,  304. 

of  accommodation  paper,  158. 

whether  holder  for  value,  165,  166,  168. 

when  should  make  presentment  tor  payment,  311. 

POLITICAL  AND  SOCIAL  DISTURBANCES, 

as  excuse  for  non-presentment,  etc.,  354. 
POSSESSION, 

when  evidence  of  holder's  right  to  present  for  payment,  312. 
POST-DATING, 

of  bills  and  notes,  11. 
POST-NOTE,  464. 
POST-OFFICE, 

when  notice  of  dishonor  may  be  sent  through,  338,  343. 
POWER  OF  ATTORNEY, 

authority  given  accommodated  party  in  the  nature  of,  158. 
PRESENTMENT, 

excuses  for  want  of.    See  Excuses  for  Want  of  Presentment,  etc, 
PRESENTMENT  FOR  ACCEPTANCE.    See  Acceptance. 

what  bills  must  be  presented,  211. 

by  whom  and  to  whom,  212. 

at  what  place,  213. 

time  of  day — business  hours,  214. 

within  what  time,  215. 

what  is  a  reasonable  time  for,  216. 

form  and  manner  of,  217. 

1023 


INDEX. 

References  are  to  Sections, 

PRESENTMENT  FOR  ACCEPTANCE— Continued. 

excuses  for  want  of.    See  Excuses  for  Wajjt  of  Presentment,  etc. 

by  what  law  governed,  509. 

effect  of  failure  to,  210. 

not  necessary  where  drawer  and  drawee  are    same   parties,  if 

natural    person    or    private    corporation,    but    otherwise    with 

public  corporations,  218. 
PRESENTMENT  FOR  PAYMENT, 

of  corporation  (public)  warrants,  141. 

necessity  for— effect  on  accrument  of  interest,  310. 

by  whom,  311,  324. 

when  possession  evidence  of  holder's  right  to  make,  312. 

to  whom,  313. 

place  for,  314. 

time  of, — days  of  grace,  315,  443. 

computation  of  time — effect  of  legal  holidays,  316. 

at  what  hour  of  the  day  to  make,  317. 

mode  of,  318,  444. 

by  whom,  when  made  in  preparation  for  protest,  324. 

excuses  for  want  of.    See  Excuses  fok  Want  of  Presentment,  etc. 

of  coupons,  476. 

by  what  law  governed,  509. 

of  checks,  442,  446. 

not  necessary  where  one  corporate  officer  draws  on  another,  128. 

of  warrants  of  public  or  municipal  corporations,  140. 

where   bill  is  accepted  supra  protest  presentment  for  payment 

should  be  made  first  to  original  drawee,  then  to  acceptor  supra 

protest,  228. 
PRESIDENT, 

implied  powers  of  a  corporation,  121. 

has  implied  power  to  certify  checks,  458. 

bank  bills  and  coupon  bonds  usually  required  to  be  signed  by, 

464,  475. 

PRESUMPTIONS, 

in  respect  to  absolute  and  conditional  payments,  how  rebutted,  380. 

in  respect  to  time  of  alteration,  393. 

of  indulgence,  arising  from  receipt  of  securities,  425. 

that  acceptor  is  primary  debtor,  155. 

indorsement   for    accommodation    as    well  as  joint  executions   of 

negotiable  instrument  presumed  to  be  made  contemporaneous 

with  execution  of  same,  157. 
where  contract  calls  for  payment  in  dollars  it  is  presumed  lawful 

currency  of  U.  S.  intended,  185. 
1024 


INDEX. 

References  are  to  Sections. 

PKESUMPTIONS— Continued. 

where  acceptance  bears  no  date,  presumed  to  have  been  made  with- 
in reasonable  time  after  execution  of  bill,  220. 

against  indorsement  being  restrictive,  2GS. 

that  arise  from  facts  stated  in  notarial  certificate,  327. 

acceptance  raises  what,  as  to  right  to  expect  presentment,  355. 

whether  material  alteration  will  be  presumed  to  be  fraudulent,  392. 

checks  presumptively  drawn  against  deposit,  430,  433. 

that  place  of  date  is  place  of  contract,  506, 
PRINCIPAL.    See  AgexXT. 

transfer  of  paper,  when  there  is  overdue  installment  of,  297. 
PRIVATE  CORPORATIONS.    See  Corporations,  Private, 
PROCESS,  LEGAL, 

transfer  by,  251. 
PROCURATION, 

signature  by,  Sire. 

PROMISSORY  NOTES, 

defined,  G. 

indorsement  of.    See  Indorsement. 

must  contain  promise  to  pay,  23. 

authority  to  confess  judgment  in,  293. 

right  to  include  in  such,  waiver  of  appraisment,  exemption  laws 
etc.,  293. 

executed  in  blank,  35. 

oral  contract  invalid  under  statute  of  frauds,  sufficient  considera- 
tion for,  162. 

debt  barred  by  statute  of  limitations  sufficient  consideration  for,  162 

liability    of    surety    on    note    barred    by    statute    of  limitations 
sufficient  consideration  for,  162. 

loss  suflered  by  depreciation  of  confederate  currency  not  sufficient 
consideration  for,  162. 

antecedent  debt  of  bankrupt,  sufficient  consideration  for,  162. 

arbitrator's  award  sufficient  consideration  for,  163. 

donor  cannot  make  gift  of  his  own,  252. 

protest  of.    See  Protest. 

notice  of  dishonor  of.    See  Notice  of  Dishonor. 

party  cannot  make  payment  for  honor  or  supra  protest  of,  378. 

re-exchange  and  damages  upon,  410. 
PROOF.    See  Burden  of. 

burden  of,  as  to  bona  fide  ownership,  303. 

as  to  time  of  alteration,  393. 

proof  of  notice  of  dishonor,  348. 

C5  1025 


INDKX. 

References  are  to  Sections.  i 

PROMISE  TO  ACCEPT  BILL  OP^  EXCHANGE.      See  Acckpiancb.  I 

verbal  and  written  promise,  226. 
PROMISE  TO  MARRY, 

is  legal  consideration,  173. 

release  of  liability  for  breach  of,  sufficient  consideration,  174. 
PROPERTY, 

transfer  of,  as  consideration,  172. 

transfer  of  commercial  paper,  as  consideration,  172a. 
PROTEST, 

for  better  security,  229. 

object  and  necessity  of,  321. 

by  whom  it  should  be  made,  322. 

where  it  should  be  made,  323. 

by  whom  presentment  for  payment  should  be  made  in  preparation  Jjj 

for,  324.  •  • 

noting  the  dishonor  and  extending  the,  325. 

contents  of  certificates  of,  32G. 

evidence  of  what,  327. 

excuses  for  want  of.    See  Excuses  fok  Want  of  Presentmbn'^,  etc* 

by  what  law  governed,  509 . 

of  checks,  442. 

necessary  of  foreign  bills  of  exchange  but  not  inland,  31. 

in  suit  against  indorser  or  drawer  part  of  bill  protested  must  be 
produced  in  evidence,  4. 

holder  may  protest  as  to  all  drawees  where  one  refuses  to  accept, 
212. 

where  bill  accepted  supra  protest  must  again  be  presented   to 
drawee  and  again  protested,  228. 

presentment  for  must  be  made  by  notary  public,  311. 

statement  of,  in  giving  notice  of  dishonor,  346. 
PROTEST  SUPRA.    See  Supra  Protest. 
PUBLIC  CORPORATIONS.    See  Corporations,  Private  and  Public, 

AND  Municipal  Corporations. 

PUBLIC  RECORDS, 

when  constructive  notice  to  bona  fide  holder,  302. 

PURCHASER, 

without  notice,  299,  302.    See  Notice. 

R. 

RATIFICATION, 

of  agent's  unauthorized  acts,  S3. 

of  unauthorized  issue  of  paper  by  partner,  101. 

102G 


INDEX. 

References  are  to  Sections. 

RATIFICATION— Continued, 
of  infants  contracts,  50. 
of  lunatics  contracts,  55. 
of  drunken  persons  contracts,  57. 
authority  of  agent  implied  from  previous  satisfaction  on  subsequent 

day,  34c. 
of  illegal  issue  of  coupon  bonds,  482. 

REBELLION, 

contracts  in  aid  of,  as  a  consideration,  184 
RECEIPT, 

whether  payor  can  demand,  373. 

of  warehousemen,  499. 

of  securities,  when  supports  presumption  of  indulgence,  425. 

when  check  presumptively  receipt  for  money  paid,  455. 

bill  of  lading  as,  491. 

RECEIVERS, 

personally  liable  on  any  bill  or  note  they  attempt  to  issue,  145. 
do  not  receive  negotiable  paper  in  usual  course  of  business,  294. 

RECEIVERS'  CERTIFICATES,  498. 

RE-EXCHAXGE, 

and  exchange  explained,  405. 
statutory  damages  in  lieu  of,  406. 
indorsers  liable  for  damage  or,  407. 
is  acceptor  liable  for,  408. 
what  law  determines  liability  for,  409. 
and  damages  upon  promissory  notes,  410. 
elTect  of  part  payment  on  claim  for,  411. 
interest,  what  rate  recoverable,  412. 
REFUSAL, 

to  accept,  effect  of,  210. 
RELATIONS  BETWEEN  PARTIES, 

as  excuse  for  want  of  presentment,  etc.,  356. 

depends  upon,  as  to  whether  the  transfer  was  made  in  usual  course 

of  business,  294. 
any  alteration  in,  material,  394. 
RELEASE, 

of  legal  liabilities,  as  a  consideration,  174. 

cashier  or  president  no  implied  power  to  release  parties  liable  to 

bunk,  120,  121. 
without  consideration  does  not  destroy  liability  of  debtor,  162. 
of  claim  to  contribution  by  surety,  426. 

1027 


INDEX. 

References  are  to  Sections. 

RELIGION, 

morality  and  oftenses  against,  as  consideration,  196. 
RENEW, 

agreements  to,  43. 
RENEWAL, 

agreements  for,  43. 

eftect  of,  on  illegal  consideration,  180. 

eftect  of,  on  usurious  paper,  196. 

effect  of,  on  paper,  void  on  account  of  illegality,  199. 

of  note  or  bill,  what  it  carries  by  equitable  assignment,  249. 
REQUISITES  OF  BILLS  AND  NOTES.  See  Bills  and  Notes. 
RESTRAINT  OF  MARRIAGE, 

contracts  in,  as  a  consideration,  191. 
RESTRAINT  OF  TRADE, 

contracts  in,  as  a  consideration,  190. 
RESTRICTIVE  IND0RSE3IENT.    See  Indorsement. 
REVOCATION, 

of  agent's  authority — presumed  continuance  of  authority,  80. 

of  acceptance,  221. 

notice  of,  must  be  given,  80. 

death  of  accommodating  party  before  negotiation  of  paper  operates 
as,  158. 

commercial  instruments  supported  only  by  good  consideration  may 
be  revoked  before  it  passes  into  hands  of  bona  fide  holder,  159. 

when  may  acceptance  be  revoked,  221. 
RIGHT  OF  ACTION, 

suspended  by  taking  bill  or  note  in  payment,  381. 

of  the  sureties — contribution,  426.  > 

S. 
SALE, 

payment  distinguished  from,  371. 

title  to  commercial  paper  passes  by  without  delivery,  250. 

indorsement  for  less  than  face  value  whether  it  constitutes  loan  or 
sale,  292. 
SEAL, 

destroys  negotiable  character,  32. 

in  respect  to  paper  issued  by  corporations,  117. 

not  necessary  to  negotiability  of  coupon  bonds,  475. 

filling  blank  in  sealed  instruments,  35. 

common  law  rule  governing,  117. 

of  notary  must  be  attached  to  notarial  certificate,  326. 

corporate  securities  negotiable  though  under,  472,  473. 
1028 


INDEX, 

References  are  to  Sections. 

SECURITY, 

surrender  of,  when  it  discharges  sureties  and  guarantors,  424. 

protest  for  better,  229. 

receipt  of,  as  excuse  for  want  of  presentment,  etc.,  362,  425. 

transfer  by  delivery  as,  when  excuse  for  want  of  presentment,  etc., 
367. 

commercial  paper  as  collateral,  166. 

decisions  of  New  York  Courts  in  respect  to  collateral,  169. 
SERVICES, 

contract  for,  as  a  consideration,  173. 
SET-OFF.    See  Off-set. 
SICKNESS, 

as  excuse  for  non-presentment,  protest  and  notice,  360. 

SIGHT, 

instruments  payable  at,  when  overdue,  296. 

instruments  payable  at,  whether  entitled  to  grace,  315. 

paper  payable  after,  16. 
SIGNATURE, 

form  and  place  of,  12a. 

of  agent,  form,  85,  123,  124. 

by  procuration,  81a. 

form  of  Arm's,  103. 

firm  doing  business  in  partner's  name,  104. 

of  firm  in  acceptances,  105. 

by  private  corporation's  agent,  123, 124. 

form  of  acceptance  by  agent  of  corporation,  125. 

form  of  indorsement  by  agent  of  corporation,  126,  127. 

of  agent  of  municipal  corporation,  137. 

effect  of  adopting  a  forged,  398. 

as  admitted  by  acceptance,  230,  231. 

on  back  of  instrument  when  ambigious  may  be  explained  by  parol 
evidence,  272,  273,  274. 

instruments  written  over  blank  in  hands  of  bona  fide  holder,  284. 

writing  out  name  of  bank  after  cashier's,  no  material  alteration,  395. 

when  one  is  estopped  from  denying  the  genuineness  of  anothers, 
399. 

of  fictitious  name  forgery,  391. 

bank  under  obligation  to  know  signatures  of  depositors,  451. 
SILVER  AND  GOLD  CERTIFICATES, 

of  United  States,  462. 
SPENDTHRIFTS, 

as  parties,  58. 

1029 


INDEX. 

References  are  to  Sections. 

SPOLIATION.     See  Fohgery. 

SOCIAL  AXD  POLITICAL  DISTURBANCES, 

as  an  excuse  for  non-presentment,  etc.,  354. 
STALE, 

when  checks  are  considered,  446. 

when  bank  notes  are  considered,  465. 

STAMPS, 

by  what  law  governed,  510. 

STATUTE  OF  FRAUDS.    See  Frauds,  Statute  of, 

STATUTE  OF  LI  MIT  ATIONS.    See  Luhtations,  Statute  of. 

in  respect  to  certificates  of  deposit,  488. 

in  respect  to  bank-notes,  465. 
STOPPAGE  IN  TRANSITU, 

when  may  right  be  exercised,  34a. 

effect  of  transfer  of  bill  of  lading  on  right,  493. 
SUBSCRIPTIONS, 

to  charitable  objects,  as  a  consideration,  161. 
SUNDAY.    See  Grace— Delivery. 

common  law  contains  no  prohibition  of  labor  on,  34c. 

changed  by  statutes,  34c, 

interest  may  begin  to  run  on,  34c. 

ratification  on  subsequent  day,  34c. 

if  note  be  void  because  delivered  in  original  consideration  may  be 
recovered,  34c. 

noticed  judicially,  34c. 

presentment  for  payment  cannot  be  made  on,  316. 

legal  holidays  generally  include,  316. 

notice  of  dishonor  given  on,  invalid,  337. 
SUPRA  PROTEST, 

acceptances  for,  228. 

protest  for  better  security,  229. 

payment,  378. 

admissions  of  acceptor,  231. 

where  bill  has  been  accepted,  presentment  for  payment  should  be 
made  to  drawee  and  acceptor,  313. 

one  who  accepts,  may  give  notice  of  dishonor,  335. 

rights  and  duties  of  parties  who  accept,  378. 
SURETIES  AND  GUARANTORS, 

and  guarantor  distinguished,  415. 

forms  and  kinds  of  guaranty,  416. 

the  consideration  of  guaranties,  417. 

how  affected  by  the  statute  of  frauds,  418. 

1030 


I 


INDEX. 

References  are  to  Sections. 

SURETIES  AND  GUARANTORS— Continued, 
negotiability  of  guaranties,  419. 
notice  of  acceptance  of  guaranty,  420. 

necessity  for  demand  of  principal  and  notice  of  default  to  guarantor, 
421. 

concealed  siareties  as  accommodation  parties— nature  of  their  lia- 
bility— admissibility  of  parol  evidence  to  prove  real  character,  422. 

what  acts  will  discharge  guarantors  and  sureties,  423. 

continue  d — surrender  of  Becureties  and  extension  of  time,  424. 

presumption  of  indulgence,  aris/ng  from  receipt  of  secureties,  425 

remedies  of  the  surety — contribution,  426. 

as  irregular  indorsers,  270,  273. 

corporations  as,  116. 

liability  of  surety  on  promissory  note  barred  by  statute  of  limita- 
tions sufficient  consideration  for  new  note,  162,  163. 

not  discharged  by  failure  of  holder  to  make  presentment  for  pay- 
ment, 310. 

bound  on  instruments  executed  under  duress  in  hands  of  bona  fide 
holder  if  they  had  knowledge  of  duress,  287. 

law  favors  sureties  in  making  appropriation  of  payment,  377. 

SURETY.    See  Sureties  and  Guabantors. 
SURRENDER, 

of  commercial  paper,  whether  payor  can  demand,  373. 

of  secureties,  when  it  discharges  sureties  and  guarantors,  424. 

T. 

TENDER.    See  Legal  Tender. 
TIME, 

of  payment  in  bills  and  notes,  24. 

of  delivery,  346. 

on  Sunday,  34c. 

of  presentment  for  acceptance,  214,  216, 

of  indorsement  and  transfer,  269. 

of  presentment  for  payment,  315,  317,  443. 

extension  of,  for  payment  as  consideration  for  commercial  instru- 
ments, 175. 

at  what  time  acceptance  may  be  made,  220. 

within  what,  must  demand  be  made  for  payment  of  instruments 
payable  on  demand,  296. 

computation  of,  316. 

allowed  for  giving  notice  of  dishonor,  337. 

burden  of  proof  as  to  time  of  alteration,  393. 

change  in  of  payment  material  alteration,  394. 

1031 


INDEX. 

Referencos  are  to  Sections. 

TLME— Continued. 

within  which  holder  may  make  presentment  and  protest  and  give 
notice  of  dishonor  after  impediment  which  operated  as  excuse 
for  want  of  presentment,  protest  and  notice  has  ceased,  354. 

within  what,  must  notice  be  given  in  order  to  recover  money  paid 
on  forged  instrument,  400. 

surrender  of  securities  and  extension  of  time  of  payment,  424. 

of  payment  of  certified  checlis,  439. 
TITLE, 

failure  of,  as  affecting  consideration,  202. 

to  commercial  paper  passes  by  sale  without  delivery,  250. 

when  indorsement  necessary  to  pass  legal,  257. 

obtained  by  transferee  of  bill  of  lading,  403. 

obtained  by  purchaser  of  certificate  of  stock,  497.- 
TRADE,  , 

contracts  in  restraint  of,  190. 
TRADLNG  PARTNERSHIPS,  96. 
TRANSFER, 

of  property,  as  consideration,  172,  172a. 

of  bills  of  lading,  403. 

of  certificates  of  deposit,  486,  489. 

payment  distinguished  from  sale  or,  371. 

of  checks,  440. 
TRANSFER  OF  COMMERCIAL  PAPER  IN  GENERAL, 

assignability  of  choses  in  action  in  general,  241. 

transfer  of  non-negotiable  paper — subject  to  what  defenses,  242. 

negotiable  instruments  payable  to  bearer — how  transferred,  243. 

liability  of  assignors  of  instruments  payable  to  bearer,  244. 

liability  of  broker  in  transfer  of  negotiable  paper  by  delivery,  245. 

transfer  of  negotiable  paper  payable  to  order — indorsement,  246. 

assignment  of  negotiable  paper  payable  to  order,  247. 

effect  of  subsequent  indorsement,  whether  it  relates  back,  248. 

equitable  or  implied  assignment,  249. 

title  to  commercial  paper  passes  by  sale  without  delivery,  250. 

transfer  by  legal  process,  252. 

transfer  by  donatio  mortis  causa,  253. 

before  and  after  maturity,  205. 

of  instruments  payable  on  demand  or  at  sight,  when  overdue,  296. 

when  installment  of  principal  or  interest  is  overdue,  20  7. 

on  last  day  of  grace,  208. 

by  delivery,  as  security,  when  excuse  for  want  of  presentment,  367. 

payment  distinguished  from,  371. 

1032 


INDEX 

References  are  to  Sections. 

TRANSFER  OF  COMMERCIAL  PAPER  IN  GENERAL— Continued 

by  delivery  of  coupon  bonds,  474. 

of  checks,  440. 

?>f  bank-note,  liability  of  transferrer,  466, 

in  usual  course  of  business,  294. 
TRANSFER  BY  INDORSEMENT.    See  Indorsement,  Transfer  by. 
TREASURY  NOTES,  UNITED  STATES,  460,  461. 

legal  tender,  375. 

TRUSTEES, 

as  parties  to  commeroial  paper,  145. 

as  constructive  notice  to  bona  fide  holder,  302. 

^11  must  join  in  drawing  checks,  447. 

U. 

ULTRA  VIRES, 

bona  fide  holders  of  paper  issued  by  private  corporation,  116. 

no  defense  against  bona  fide  holders,  280. 

coupon  bonds  issued  by  municipal  corporations,  482. 

UNITED  STATES  TREASURY  NOTES, 
paper  money  or  currency,  460. 
treasury  notes,  461. 
silver  and  gold  certificates,  462. 

USUAL  COURSE  OF  BUSINESS,  294. 

USURY, 

as  affecting  consideration,  196. 
.  indorsement  for  less  than  face  value,  vrhert  it  constitutes,  292,  293 
as  applied  to  stipulations  in  bills  or  notes  to  pay  costs,  286. 

V. 

VALUE, 

failure  in,  as  affecting  consideration,  20.3. 
indorsement  for  less  than  face,  when  usurious,  292. 
VALUE  RECEIVED, 

custom  to  insert  words  in  commercial  paper,  31. 

import  consideration,  31. 

note  of  administrator  held  void  for  want  of  consideration  which 

contained  words,  147. 
no  presumption  of  consideration  in  non-negotiable  instruments  not 

under  seal  without  words,  152. 
words  required  by  statutes  in  some  States,  152. 

1033 


INDKX. 

References  are  to  Sections. 

W. 

WAGERS, 

as  consideration,  188. 

option  contracts,  when  illegal,  189. 
WAIVER, 

of  acceptor's  liability,  232. 

of  presentment  and  notice,  363,  365. 

of  notice  of  acceptance  in  guaranty,  420. 
WAR, 

as  an  excuse  for  non-presentment,  etc.,  354. 
WARRANTY, 

implied,  of  assignor  of  instruments  payable  to  bearer,  258. 

implied,  of  indorser  of  negotiable  instruments,  259. 

implied,  of  transferer  of  bank  notes,  of  solvency  of  bank,  466. 
WARRANTS, 

or  drafts  of  one  corporate  officer  upon  another,  128, 138. 

indorsement  and  assignment,  139. 

presentment  for  paj'ment,  140. 

payable  out  of  a  particular  fund,  141. 
WAREHOUSE  RECEIPTS,  499. 

WITNESSES, 

whether  needed  in  bills  and  notes,  33. 

addition  of  attesting,  material  alteration,  394. 
WORDS, 

of  negotiability,  21. 

addition  of,  which  are  Implied  by  law  no  material  alteration,  395. 

words  that  amount  to  acceptance,  223. 


\ct>- 


u^>-' 


1034 


UC  SOUTHERN  REGIONAL  LIBRARY  FACILITY 


AA    000  836  830    o 


